BBVA has achieved, for the first time in its history, the 100,000 million euros of market capitalization on the Ibex 35. This is a milestone especially notablebecause only three other companies are above this figure: Inditex, with 154,430 million euros, Santander, with 133,462 million, and Iberdrolawith 118,024 million.
In this way, the entity chaired by Carlos Torres becomes a member of the select club of 100,000 million, just two weeks after the failure of his big operation: the takeover bid on Sabadell. The great project of the Biscayan entity ended up failing, having only achieved a share of the 26% acceptance, much lower than the 60% or 70% that the bank executives calculated, although very close to the 30% minimum thresholdwhich would have allowed the bank to launch a second takeover bid.
Although the operation did not come to fruition, the performance in the BBVA market after the takeover bid has been notable. Since the CNMV made public the failure of the operation, BBVA shares have increased in value by more than 10%of 15.72 euros to 17.44 by title in this Wednesday's half session. This rebound is no coincidence. The entity chaired by Carlos Torres issued, as soon as the ruling was known, an appearance announcing plans for the future of the entity.
Shareholder remuneration and buyback
Among the bank's objectives is the strategy of payments to shareholders, by 36 billion until 2028 and 13 billion in the short term. In addition, Torres announced that the bank would resume the repurchase of shares worth 1 billion which was paralyzed due to the takeover bid. These plans seem to have revived investor interest in BBVA, and have caused the Biscayan entity to experience a sweet moment in the market.
For its part, BBVA sources admit that the bank “has a unique growth profile and profitability in Europe. It is one of the entities that more value generates and one of the most efficient.” They maintain that its performance responds “to the success of the bank's strategy,” as well as its franchises“world leaders.”
“As we meet the goals that we pay attention and deliver results, the market has been recognizing it”, they recall, adding that, since January 2019, the total return for its shareholders has multiplied by more than fivefar surpassing European and Spanish banks.
“The bank expects to obtain an accumulated attributable profit in four years of approximately 48,000 million euros and plans to have 36,000 million euros of the highest quality capital to distribute among its shareholders until 2028,” they add, adding that said plans are subject to the pertinent approvals.
According to Renta 4 analysts, BBVA, like the entire banking sector, “has benefited in recent years from the increase in interest rates to boost income, and subsequently, in an environment of lower rates, an income statement prepared to withstand this rate drop along with volume growth.
“At BBVA, despite having to apply hyperinflation in Türkiyewhich has led it to contribute less to the group's account, the growth in Mexico and Spain and the improvement of capital, which has allowed the implementation of buyback programs in addition to the policy of dividends“analysts maintain as factors that have supported the price.
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