BBVA announces a “significant share buyback” after the failure of the takeover bid for Banco Sabadell

BBVA reported this Thursday that it is resuming its shareholder remuneration plan with a “significant share buyback” after its public takeover bid (OPA) for Banco Sabadell has failed, which has only achieved 25.5% acceptance regarding voting rights. “I want to thank the shareholders of Banco Sabadell who have shown their support for the merger project, to BBVA shareholders for their constant support and to our team for the great work carried out throughout the entire process,” said the president of the entity, Carlos Torres, in a statement.

The bank had said on several occasions that, in the event that the takeover bid did not prosper, the BBVA project remained attractive due to its growth, profitability and dividend distribution prospects. The takeover bid has been accepted for 1.27 million shares, representing a total of 25.33% of the shares to which the offer was directed and of the share capital of the offeree company, and 25.47% of the voting rights of Sabadell, this latter percentage calculated excluding the treasury stock of Banco de Sabadell.

The bank plans to distribute 36,000 million euros among its shareholders until 2028. In the short term, BBVA has announced that it plans to have 13,000 million to distribute to its shareholders. “Within the framework of our financial objectives and once the restrictions derived from the operation have been overcome, we accelerated our shareholder remuneration plan,” highlighted BBVA CEO Onur Genç.

On October 31, the pending share buyback will be resumed, for an amount of 1,000 million euros. Subsequently, on November 7, a dividend of 0.32 euros per share, which represents a total distribution of 1,800 million. Furthermore, given the significant excess capital accumulated over 12%, BBVA’s board of directors has agreed to launch a “significant additional share buyback” as soon as it receives authorization from the ECB.

During the period covered by the 2025-2028 strategic plan, BBVA estimates that its average ROTE will be around 22% and that its efficiency ratio improves to around 35%. The bank expects to obtain an accumulated attributable profit in four years of approximately 48 billion euros.

Regarding capital, BBVA expects to generate 39,000 million euros in capital organically in these four years and 5 billion additional through securitization operations and ‘Significant Risk Transfer’ (SRT) transactions. In addition, it already had an excess of capital over the CET1 ratio of 12% of 4,500 million euros at the end of 2024, including the share repurchase of almost 1,000 million pending execution.

Of this capital, BBVA will first allocate about 30% to investment in growth (approximately 13,000 million euros) and the remaining 70% would be available to distribute to its shareholders (about 36,000 million). Of this amount, assuming a maximum payout of 50% of the profit established by BBVA’s dividend policy, 24,000 million euros would be ordinary distributions; and the rest, 12,000 million, would be surplus capital above 12% of CET1, available for distribution. In both cases, shareholder remuneration may be materialized through cash dividends or share repurchases.