7 October 2024
Banco Sabadell’s Chief Executive Officer, César González-Bueno, stated today that the shareholder remuneration put forward by the bank’s Board of Directors for the next few years is “unbeatable” and has defended his view that this is one of the reasons that BBVA’s hostile takeover bid does not “make any sense nor follow the right path”.
During his speech at the 15th Financial Forum organised by Expansión and KPMG, González-Bueno insisted that “Banco Sabadell has a long way to go, and this is reflected in the high dividends announced relative to the share price”. The bank will distribute 2.9 billion euros, which equates to 30% of its current stock market value.
“We are in great shape” he affirmed, adding that the bank is completely focused on delivering greater results. He noted that the 2.9-billion-euro shareholder remuneration is likely to be updated in due course, as this amount was calculated using old budgets.
Even before the takeover was announced, Sabadell’s value had increased more than 60%. “Neither our current rise nor BBVA’s drop is due to the hostile takeover bid, but rather to the correlation with our environments”, he said. In that regard, he also commented that “the relationship between Banco Sabadell’s share price and its capacity to distribute dividends is greater; therefore, this operation does not make sense”.
On Banco Sabadell’s decision to distribute all excess capital it generates above 13%, he said: “It was a decision made before the hostile takeover bid was launched and seems conservative in our view, despite the stable market”. If the limit had been set at 12%, the excess capital would amount to an additional 800 million euros.
González-Bueno also suggested that a bid of this kind requires several components to be successful, an attractive price being one of them: “This is not the case. We are going to distribute more dividends and have a better market outlook, with no analysts recommending to ‘sell’”. He also pointed out that “this type of bid can only succeed if it is friendly, and this one isn’t”.
Banco Sabadell’s CEO also reminded those in the audience that the overlap between both institutions is very high and is a cause for concern, given that the Sabadell has a 50% market share in the SME segment. In fact, this complexity could foreseeably take Spanish National Markets and Competition Commission (CNMC)’s review to Phase 2, and consequently, to Phase 3, where the government could toughen or ease the conditions imposed by the CNMC.
González-Bueno stated that Banco Sabadell is halfway through its transformation process, with employee engagement at record levels, growing customer satisfaction and profitability improving year on year.
