Spains BBVA Plans 3.2 bln Share Buyback, Dividend Payouts

18237500 - businessman hand pointing to investment as concept

BBVA plans to buy back around 10 of its shares, currently worth about 2.6 billion euros 3.2 billion, after the sale of its U.S. unit, the Spanish bank said on Friday.

The lender also said it planned to a pay a gross cash dividend of 0.059 euros per share on 2020 profits and return to its policy of distributing 3540 of profits to shareholders in 2021, in line with European Central Bank ECB guidance.

The ECB gave recommendations on dividends and share buybacks in December, seeking to ensure banks have the resources to cope with a tough economic backdrop.

BBVA said its planned buyback and dividend policy were both subject to market conditions and regulatory approvals.

The bank said the sale of its U.S. unit, expected to complete in mid2021, would put its proforma fully loaded coretier capital ratio, the strictest measure of solvency, at 14.58 at the end of December 2020.

The reported capital ratio increased in the quarter by 21 basis points to 11.73, prompting the lender to increase its capital ratio target to 11.512 from 10.8411.34 previously.

In November, Spains secondbiggest bank announced the sale of its U.S. business for 11.6 billion to PNC, signalling it could use part of the proceeds on a sizeable share buyback and dividend payments.

After it called off merger plans with smaller rival Sabadell that same month, the market was expecting an update on its capital plans.

BBVA also announced a net profit of 1.32 billion euros in the fourth quarter from a loss in the…

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