Banco Santander SA, Spain’s biggest bank, will maintain its dividend in 2013 as the lender forecasts a “significant” increase in profit after completing a real estate cleanup, Chairman Emilio Botin said.
The company will keep remuneration for shareholders at 60 euro cents ($0.78) a share for a fifth straight year, Botin said today at the firm’s annual general meeting in Santander, Spain.
Profit from Santander’s banks in countries including Brazil and Mexico have helped it weather the impact of a property crash in Spain, where the government has forced lenders to speed up the recognition of losses on their real estate assets. After taking total charges for writedowns or provisions of 18.8 billion euros in 2012, the lender is confident it’s approaching a “change in cycle” as it completes the cleanup of real estate on the company’s books, Botin said.
“We look ahead with optimism” even as “the coming quarters will be tough in Spain,” he said. “In 2012 our bank’s profits marked a turning point and in 2013, once the real estate coverage has been completed, we will see a significant increase in profits.”
Botin said he was responding to pressure from markets for banks to give more information on the impact of new rules on capital known as Basel III.
At the end of 2013, Santander expects to have a so-called fully loaded capital ratio under Basel III of 8 percent. That year-end figure takes into account adjustments that have to be made by 2019.
Applying the implementation timetable now approved by regulators, the Basel III capital ratio in December will be 11 percent, he said. Those estimates assumes the bank pay its four dividends in the form of shares without an capital increase or making acquisitions, Botin said.