Santander saves 1.6 bln euros in capital after scrapping final 2019 dividend

Santander saved 1.6 billion euros ($1.7 billion) by scrapping its final 2019 dividend, allowing it to offer 30 billion euros more in loans to households to mitigate the impact of the coronavirus outbreak, chairman Ana Botin told investors on Friday. The European Central Bank had already told lenders to skip dividend payments and share buybacks until October at the earliest and use profits to support an economy hamstrung by restrictions on movement implemented to stop the spread of the virus.

"Today more than ever it is imperative to follow the supervisor's recommendation," Botin told investors at a remotely held annual shareholders' meeting. The lender said on Thursday it would cancel the final 0.13 euros per share dividend against its 2019 earnings to boost capital defenses. It has also canceled its 2020 dividend policy, with Botin saying the capital conserved from the combined measures represented an additional 90 billion euros in available loans.

Even with a broad lockdown in place since March 14, Spain has registered an increase in coronavirus cases to more than 117,000. The death toll almost reached 11,000 on Friday. Though it was too to soon to assess the full impact of the pandemic, Botin said she expected the bank's 2020 first-quarter underlying earnings to be in line the first quarter of 2019, with a "very marginal impact from the coronavirus crisis on business results in the first 3 months of the year."

"Considering the current uncertainty and the low visibility over the short-term evolution of the economy, we will reassess our medium-term goals once the situation stabilizes," Botin said. She also said it was "now the time for Europe to rise to the occasion and lead a faster and more coordinated response" to the coronavirus.

($1 = 0.9258 euros) 

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