Banks to pay out estimated dividends worth €2.9Bn

The profits from Portugal’s main five banks could result in dividends of nearly €3Bn, exceeding the €2.4Bn paid out in 2023 according to a back-of-the-envelope calculation by business daily Negócios.

The dividends do not include payouts from Novobanco if the bank and the Resolution Fund, which holds 13.5% of the bank, close a deal on the Contingent Capital Agreement which provided solvency capital to the bank largely between 2014 when it was set up and 2017 when US fund Lone Star became the largest shareholder. The CCA mechanism does not permit the bank to pay out dividends to its shareholders.

BPI and Caixa Geral de Depósitos (CGD) have already informally announced that the amount of dividends to be distributed next year, for the year 2024, will be similar to that delivered this year – €1.34Bn.

As for BCP and Santander, it is assumed that the evolution of consolidated net income in 2024 as a whole will be similar to that seen in the first nine months of the year.

In the case of BCP, the “payout” to be delivered in 2025 will be 50% of bank’s consolidated net income for 2024, or an and-of-the-year guesstimate of 50% of €940 million or €470 million.

To this amount is added a share buyback operation to the amount of 25% of the net income for 2024 – which could bring the operation to more than €200 million.

Although not really a dividend, it will be paid out to shareholders, bringing the total shareholder payout to around €700 million.

In the case of BPI, the dividends to be distributed to Spain’s Caixabank in 2025 will be in line with the €517 million decided in 2024.

“It should be very close to the previous year,” said BPI’s executive president, João Pedro Oliveira e Costa when presenting the results of the first nine months.

BPI’s policy is to deliver 65% of its results in Portugal and 100% of its profits from operations in Angola and Mozambique.

BPI has 48.1% share of Angolan BFA – a stake that is for sale – and 35.67% of Mozambican BCI, a bank whose majority shareholder is CGD, with 51% of the capital (10.51% held directly by Caixa).

In 2025 State-owned bank CGD should hand over dividends to the State of €671.5 million net.

Santander Portugal reported a profit growth of 25.2% in the first nine months of 2024 compared to the same period last year. If this evolution continues until December, the institution, which in 2023 presented a result slightly above €1Bn, will end the year with almost €1.3Bn. Assuming a payout similar to last year – around 80% – the amount delivered to the bank’s HQ in Spain could top €1Bn.

Image: The CEO of Caixa Geral de Depósitos (CGD), Paulo Macedo © and the CEO do Santander Portugal, Pedro Castro e Almeida (E) at the conference ’40 Years of the Banking Association of Portugal (APB) held in October.. ANTÓNIO PEDRO SANTOS/LUSA
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