The rise in the price of BBVA in recent months, in the heat of the recovery of bank values, is making its program to buy back 10% of the shares as a form of extraordinary dividend. In January, when it announced the plan after selling the US subsidiary and ending negotiations to absorb Sabadell , the cost of acquiring its own securities amounted to some 2,600 million at then prices. It currently exceeds 3,900 million, so it has risen by 50%.
Faced with this rise in the bill, which will be paid with the excess capital due to the divestment in North America, its managers have been modulating the messages to investors, setting as a condition for a few months the price of shares as a benchmark for the intensity of buy back.
Although reaching 10% of the capital is still kept as a reference, this threshold may not finally be reached due to its high outlay or it could take longer than expected.
In fact, initially, the acquisitions were to begin in November of this year and end in mid-2022. At that time, the managers calculated a disbursement of about 3,000 million. Now, the calendar that the bank manages is that it concludes at the end of next year .
This extension, as explained by the group’s financial director, Jaime Sáenz de Tejada, in the last presentation of results, is due to the low trading of securities of the entity in the market today and to the limit established by the regulation, which prevents a purchase of more than 25% of the titles available on each day.
Margin for mergers
BBVA, however, has a capital surplus of more than 8,000 million, so it has a margin to spare, although the group chaired by Carlos Torres intends to allocate part of this money to business growth, once it has assumed the impact of the ERE of almost 3,000 workers agreed with the unions for almost 1,000 gross . And he’s not ruling out running an organic operation to drive growth and scale.
Experts continue to insist that the bank needs to carry out an acquisition of an entity in a developed market after its departure from the US, focusing on Spain, since now two-thirds of its results come from emerging countries. Therefore, they suggest that it could come back to Sabadell again to try an integration.
BBVA’s price has progressively advanced since the beginning of the year. The entity’s securities are already close to 6 euros, which means being in the zone of maximums since mid-2018.
The bank led by Carlos Torres, in addition to the buyback of the shares, intends to distribute a dividend of between 35 and 40% of the profits of 2021 , after the ECB has lifted the veto on the remuneration of the shareholders.
In this way, BBVA could pay around 1,500 million in ordinary remuneration, as long as in the second semester it obtains the same benefits as in the first (1,911 million). Analysts forecast a somewhat lower annual result, between 3.2 and 3.5 billion.