BBVA Anticipates Higher Dividend for 2023 Amid Profit Growth

Spanish multinational bank BBVA is poised to deliver a significantly higher dividend for the year 2023 compared to the 0.43 euros per share distributed in 2022, according to Chairman Carlos Torres. In a post on the bank’s website on Monday, Torres highlighted the favorable conditions driving the expected dividend increase, including robust profits driven by expanded lending.

Torres stated that, with a growing profit, a decreasing number of shares, and a consistent dividend policy—entailing distributions ranging from 40 to 50 percent of profit—they observe a clear annual growth in the dividend per share. Additionally, he mentioned the anticipation that the dividend paid to shareholders in 2023 would surpass the per-share dividend of 2022.

BBVA’s dividend policy follows a structured approach involving two cash payments—an interim and a final dividend—supplemented by a share buyback program. Notably, the bank completed its latest 1 billion-euro ($1.10 billion) share buyback initiative at the end of November 2023.

In October, BBVA paid an interim dividend of 0.16 euros against its 2023 results, marking a 33.3% increase over the interim dividend paid in October 2022. The interim dividend was supported by the bank’s strong financial performance, with a net profit of 3.88 billion euros in the first half of 2023, driven by increased lending income in its primary markets of Mexico and Spain.

The positive financial margins have been a boon for Spanish banks, translating into expectations of record profits for the entirety of 2023. BBVA, as a predominantly retail-focused institution, stands to benefit significantly from higher interest rates, outperforming some of its counterparts in the eurozone.

Analysts are optimistic about BBVA’s financial outlook, projecting a net profit of 7.84 billion euros for 2023, according to Refinitiv data. In comparison, the bank reported a net profit of 6.42 billion euros in 2022, underscoring the expected growth trajectory.

Looking ahead to 2024, Chairman Torres expressed confidence in the continued expansion of BBVA’s banking activities, underpinned by the addition of 11 million new customers in the past 12 months. This customer growth has also contributed to an uptick in lending, which was advancing at a rate of 8% as of September.

Despite the positive outlook, BBVA’s shares experienced a marginal decline of 0.2% at 0926 GMT, following a remarkable gain of 46% throughout 2023. The stock performance reflects the market’s response to the bank’s robust financial performance and optimistic projections for the future.

In conclusion, BBVA’s anticipation of a higher dividend for 2023 signals the bank’s resilience and strategic positioning amid favorable market conditions. The commitment to a consistent dividend policy, coupled with a focus on customer acquisition and lending growth, positions BBVA for continued success in navigating the evolving financial landscape. The bank’s proactive approach to capital distribution reflects its confidence in sustaining positive momentum and delivering value to shareholders.