Santander to Raise Dividend as Botin Sees Brighter Future

Updated on
  • Board looks at a five percent increase for 2017 dividend
  • Chairman Botin tells sharaholders the bank will do better

Banco Santander SA plans to raise its dividend for a second straight year, betting that economic growth will bolster returns across the 10 countries that generate almost all its profit.

Spain’s biggest bank is looking to boost its payout to 22 euro cents from 21 cents for 2016, Chairman Ana Botin told investors Friday at the annual shareholder meeting in the port city of Santander. While that would fulfill her pledge to return more profit in cash, the dividend remains well below the 60 cents that investors received for years under her late father, mostly in the form of shares.

Ana Botin

Photographer: Angel Navarrete/Bloomberg

“In 2016, we achieved our commercial and financial targets and met the profitability metrics we promised to our shareholders,” she said. “The bank’s good performance over the last year and the positive trends arising from our new strategy allow me to tell you today we are going to do even better.”

Botin came under fire from shareholders in 2015 after she slashed the dividend about 65 percent, with one investor saying she was like a bull in a China shop in her first few months as Santander’s top executive. These days she’s a hit with investors: The stock is up 16 percent this year, among the highest gainers in the benchmark Stoxx Europe 600 Banks Price Index.

Santander’s annual profit climbed in Botin’s first two years on the job despite pressure from the downturn in Brazil, the U.K. vote to leave the European Union and negative interest rates in the euro zone. Botin said in January that she expects growth in all 10 markets in 2017.

The bank needs less capital than its peers because its diverse geographic footprint allows for more stable and predictable results, Botin told shareholders.

Santander will remain committed to British companies and clients despite the country’s plans to withdraw from the EU, Chief Executive Officer Jose Antonio Alvarez told shareholders. He said the bank will concentrate this year on increasing profitability in the U.K.

Santander shares were down 0.3 percent at 5.74 euros at 4.58 p.m. in Madrid.

(Updates with more detail on dividends in second paragraph, share price.)
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