The European Central Bank’s interest rate hikes benefited banks, which saw record profits and improved profitability and earnings. This situation means that the stock market’s performance over the past year and a half has been very good. However, this did not convince shareholders. Six large Spanish companies listed on Ibex lost 284,000 shareholders in one year. Some of these banks were revalued by 66%.

The bank presented the results by September. The six banks earned a total of 19.761 million euros, up 23.5% from a year ago. The absolute figure they achieved in nine months is comparable to that achieved in the whole of 2022, when they earned 20.850 million euros. Despite the rise in profits, bank managers insist they are not extraordinary profits, that they still do not cover capital and that rising rates mean a return to normal. They admit that in the coming quarters, thanks to the ECB’s decision to keep the rate at 4.5%, growth will no longer be as strong.

End of September 2023 The major Spanish banks had 5,390,210 shareholders., which is 5% less than a year earlier (as of September 30, 2022). The banks that have lost the most shareholders are those that have implemented share buyback programs as they remove securities from the market so new shareholders can enter. As of September 30, 2023, Banco Santander has 3.7 million shareholders, 225,167 fewer than a year earlier, when the number was close to 4 million (3.92 million).

Hector Grisi, the company’s CEO, defended the share buyback during the results presentation. At the same time, he assured that at the current price level, “there is nothing more valuable for shareholders.” Banco Santander is trading below its book value. But this year (September to September) the share price has increased by 51%, rising from 4.6 euros to 7.71 (September 29). On October 26, Banco Santander completed the fourth week of its share repurchase program, purchasing a total of 42.5 million shares while paying out €147.1 million, representing 11.2% of the total program amount.

In turn, BBVA closed September with 764,567 shareholders, 49,116 fewer than a year ago, a decline of 6%. Since 2021, BBVA has distributed €8.2 billion to its shareholders between dividends and share buybacks. If we add to this the recently announced interim dividend for 2023 and the extraordinary share buyback that began last week, the figure rises to around 10.2 billion over the period.

“This represents tremendous value for our shareholders,” said Onur Genç, CEO of BBVA. On 29 September 2023, the bank’s share was trading at €7.71, representing an increase of 66% from €4.62 on 20 September 2022.

CaixaBank is another of the companies that registered a decrease in shareholders. In particular, their number decreased by 15,802 to the current 602,004, that is, 2.5% less. While this fall was taking place, the share rose 14% to €3.78 (September 29), compared with 3.31 a year earlier.

The bank is another one that rewards its shareholders with share buybacks. CaixaBank achieved 43% execution of share repurchase within the first seven weeks of starting the program. In these seven weeks, the bank has already spent €215.1 million acquiring 57.3 million of its own shares at an average price of €3.75 per share. Last week it purchased 7.6 million shares for €29.2 million at an average price of €3.83 per share.

Banco Sabadell’s share repurchase plan is also underway. At the end of September this year, the company had 218,033 shareholders, which is 6,118 less than a year ago, or 2.7%. Over the same period, its share rose 62% to 1.1 euros from 0.68 a year earlier.

As of October 23, Banco Sabadell had already acquired 166.2 million of its own shares for a value of €181.2 million, representing 88.8% completion of the buyback program, which has a maximum amount of €204 million. In the fourteenth week, Sabadell repurchased 4.8 million shares at an average price of €1,116 per share, representing a payout of €5.4 million.

Unicaja is one of the companies that does not currently have a share buyback program. For this reason, the Andalusian company increased the number of shareholders by 5,089 to 39,850 as of September 30. During this time, the share increased by 10% to 1019 euros, despite the situation with the president of the company during this period.

However, the bank does not rule out paying shareholders compensation through share repurchases. Unicaja Banco has not yet decided what it will do with the excess capital it generates this year due to increased profitability due to rising interest rates, and continues to defer any decision to its board of directors. Unicaja CFO Pablo Gonzalez recalls that it all comes down to the options they mentioned earlier: rewarding shareholders through buybacks or investing in the bank itself to increase its customer base or boost its exposure at property shows. .

Finally, Bankinter increased the number of shareholders by 7,113 to 62,355. At the moment, it is the only company that has ruled out a share buyback program this year. “At the moment we do not expect any share repurchases. We believe that excess capital should grow,” said Jacobo Diaz, the company’s chief financial officer. In addition, the Spanish bank also made it clear that it does not plan to attract a dividend distribution ratio to shareholders, known as the “payout”, of 50% of profits.

From September 30, 2022 to September 30 this year, Bankinter was the institution that grew the least in the stock market. In particular, it increased by 5% to 6.04 euros from the previous 5.76.