BBVA Announces Record $4.6B Share Buyback Program
Following the failure of its bid for Sabadell, Spain’s BBVA announced on Friday that it will begin the largest share purchase in the bank’s history next week, underscoring its strong capital position and confidence in long-term earnings growth. The decision signals a renewed focus on rewarding shareholders, following consolidation efforts that did not materialize.
A first tranche of 1.5 billion euros will begin the 3.96 billion euro ($4.64 billion) buyback scheme on Monday, marking a significant milestone in the bank’s capital return strategy. The program will be executed in phases and is subject to regulatory approvals and market conditions, according to the lender.
BBVA’s four-year plan calls for distributing 36 billion euros to shareholders through a combination of cash dividends and share buybacks, reflecting management’s commitment to maintaining attractive shareholder returns while preserving financial flexibility.
By 0852 GMT, BBVA shares were up 0.2% at 19.6 euros, while the Ibex-35 index remained steady, indicating a measured market reaction to the announcement. Analysts noted that the buyback had been anticipated mainly following earlier capital guidance.
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Shareholder Distribution Strategy and Market Response
In July, the second-largest lender in the euro zone by market value said that it would soon have 13 billion euros available for shareholder distribution, supported by strong earnings momentum and disciplined cost control.
The approximately 4 billion euro share buyback follows an interim cash dividend of 1.84 billion euros in November and a 993 million euro buyback program that was completed earlier this month, highlighting a consistent capital return track record.
The buyback program will reduce the group’s core tier-1 capital ratio by 100 basis points in December, according to BBVA finance director Luisa Gomez Bravo. However, it will still leave the bank comfortably above its target range of 11.5% to 12%.
BBVA’s fully loaded core tier-1 capital ratio, the strictest solvency measure, increased from 13.34% at the end of June to 13.42% at the end of September. The fourth quarter is expected to deliver an additional 40 to 50 basis points of positive regulatory impact.
Capital Strength and Long-Term Profit Outlook
Over the next four years, BBVA aims to generate an aggregated net attributable profit of approximately 48 billion euros as part of its strategic plan, driven by growth in core markets, digital banking expansion, and operational efficiency initiatives.