While waiting for the prospectus with the offer to be published, analysts are calculating whether BBVA will be able to match in the short term the dividend offer of 2.4 billion euros over two years that Sabadell has put on the table. The battle for the dividend is one of those that will mark the end of the open war between the two banks. Some analysts doubt that BBVA can reach this figure, while others take it for granted.
Only Sabadell has put the cards on the table by offering 2,400 million, while BBVA avoids giving a clear reference to the market and investors. The president of the entity, Carlos Torres, limited himself to assuring in a press conference that “our proposal may result in higher figures, but I will not go into any detail now because we have not given any guidance to the market in this regard . Yes, I think that in the short term, as I say, they can be higher figures”. Applying a simple rule of three, if Sabadell’s shareholders join BBVA and come to control 16% of the capital, the dividend that should be distributed by the bank chaired by Torres is around 15,000 million because the former investors of the entity chaired by Jose Oliu would receive the same amount, 2.4 billion.
Can BBVA pay this amount? Some believe that in the most optimistic scenario and taking as a reference the estimates made by the same bank, more than 2,000 million would be missing to reach a dividend of 15,000. Others, on the other hand, believe that it would reach this figure.
In the same press conference, Torres indicated that “the most important thing about this is not the cash flow of the next two years”. In addition, it is very difficult to estimate the impact that the purchase operation will have on profits and capital and these are the two main variables to determine the volume of dividends that must be distributed.
Some analysts believe that BBVA will pay around 9 billion euros in dividends as part of the distribution of profits in 2024 and 2025 and 6 billion more for excess capital. It would be 15,000 million in total. BBVA sources ruled out giving figures as the president already did in the public appearance.
On the other hand, other analysts believe that it will only be able to reach around 12,000 million. According to the data published by the same entity on its website, the consensus of analysts places profits at 16,065 million between the two years. This would mean that if he distributes 50% of the profits it would be around 8 billion. And the total capital they have is 348,598 million, according to what the same bank has published on its website. If the excess capital is 0.6%, as analysts predict, the amount that would have to be distributed would be 2,093 million. Therefore, with the hypothesis that it complies with what the analysts foresee, the distribution would be 8,000 million in dividends, 2,000 million in excess capital and if we add the 2,400 that Sabadell would distribute and that would now be within BBVA , about 1.2.4 billion come out. Around 2,600 million are missing to match the dividend proposal that the bank chaired by Josep Oliu has put before investors if it remains alone.
Obviously, all calculations are theoretical and may change based on various variables. Another key element in the operation is to know how BBVA’s shares will evolve because a hypothetical fall in the share price resulting from an external impact such as Turkey or Mexico could make it impossible to exchange shares for Banco Sabadell.
