By Jesús Aguado
MADRID, Dec 19 (Reuters) – Spain’s BBVA will begin the largest share buyback in the bank’s history next week, it said on Friday, moving ahead with its strategic plan after the collapse of its bid for Sabadell.
The 3.96 billion euro ($4.64 billion) buyback programme will start on Monday with a first tranche of 1.5 billion euros.
BBVA is focused on a four-year plan that envisages shareholder distributions of 36 billion euros, either in cash dividends or share buybacks.
Shares in BBVA were up 0.2% at 19.6 euros by 0852 GMT against an unchanged Ibex-35 index.
The second-biggest lender in the euro zone by market value said in July that it would have 13 billion euros available for distribution to shareholders in the short term.
The roughly 4 billion euro share buyback comes on top of a 993 million euro buyback programme completed this month and an interim cash dividend of 1.84 billion euros in November.
BBVA finance chief Luisa Gomez Bravo said the buyback programme would deduct 100 basis points from the group’s core tier-1 capital ratio in December, leaving the bank well above its target range of between 11.5% and 12%.
At the end of September, BBVA’s fully loaded core tier-1 capital ratio, the strictest measure of solvency, rose to 13.42% from 13.34% at the end of June, with expected additional positive regulatory impact of between 40 and 50 basis points in the fourth quarter.
As part of its strategic plan, BBVA aims to earn accumulated net attributable profit of about 48 billion euros in four years.
($1 = 0.8538 euros)
(Reporting by Jesús AguadoEditing by David Latona and David Goodman)
