BBVA to submit for shareholder approval the possibility of redeeming up to 10 percent of shares
BBVA has called its Annual General Meeting (AGM) to be held virtual-only on April 20th, 2021. With the goal of being able to implement a significant potential share buyback, it will be submitted for approval of the AGM the possibility of reducing the bank’s share capital up to 10 percent - the equivalent of approximately 667 million shares. Additionally, BBVA proposes the re-election of seven board members, whose term ends in 2021. It would thus maintain unchanged the composition of the Group’s highest governing body, which currently has two thirds of independent members and an appropriate balance and diversity in several areas: experience, knowledge and expertise, gender and international representation.
BBVA will hold its Annual General Meeting on April 20, 2021. In light of the exceptional circumstances due to the pandemic, and aiming to protect the health of shareholders and others, the AGM will be 100 percent virtual. The bank is to provide all the necessary channels so that shareholders can exercise their rights.
The bank today published the items of the meeting agenda that will be subject to approval by shareholders, in particular:
Regarding shareholder’s distributions, the bank is proposing to pay a gross cash dividend of 5.9 euro cents per share on April, 29. This amount corresponds to the 15 percent of the Group’s 2020 earnings¹, the maximum amount authorized by the supervisor for such period.
With respect to 2021, and aiming to reinstate its clear, predictable and sustainable dividend policy, BBVA is proposing to the AGM a first interim dividend in cash of up to 35 percent of the consolidated profit for the first half of 2021, not including extraordinary items, and with a maximum limit of €533.43 million. Taking into account the number of shares of the bank (6,667.89 million), this would allow for a gross dividend of 8.0 euro cents per share. This first interim dividend of 2021, which will be tentatively paid in October, will be subject to the lifting of regulatory restrictions on shareholder distributions, currently in force until September.
With the goal of being able to implement the previously announced potential share buyback of about 10 percent of its shares, the bank will seek approval from its shareholders for the possibility of reducing the bank’s share capital up to 10 percent - the equivalent of approximately 667 million shares. Once this item of the agenda is approved by the AGM, the Board will be able to proceed or not with the buyback and subsequent share reduction, on one or more occasions. This potential share buyback would not take place before the closing of the sale of the U.S. subsidiary, which is expected for mid-2021, and is subject to share prices, among other factors, and to the necessary authorizations from supervisors.
BBVA is to propose to its shareholders the re-election of José Miguel Andrés, Jaime Caruana, Belén Garijo, José Maldonado, Ana Peralta, Juan Pi and Jan Verplanke. The current board composition, which has two thirds of independent board members, combines professionals with deep knowledge and extensive experience in key areas (banking, strategy, macro economics, sustainability, innovation, technology, etc.). At the company’s highest governing body, 40 percent of the board members are foreign nationals and a third are women. The bank has as its goal, and according to the policy approved by the Board, to have at least 40 percent of women members by 2022.
Among other items in the meeting agenda, the bank’s shareholders will vote on:
- The approval of the company’s annual financial statements, its management report, and its non-financial information statement, for both BBVA. S.A. and its consolidated Group.
- The approval of the allocation of 2020 results and the corporate management for the same year.
- The approval of the Remuneration Policy for BBVA Directors for 2021, 2022 and 2023, whose main aspects were presented in February, at the time it was published the annual remuneration report.
- The re-election of KPMG as BBVA’s auditors for fiscal year 2021.
- The approval of a maximum variable remuneration (of up to 200 percent of fixed compensation) for a specific group of employees, whose responsibilities have a significant impact on BBVA Group’s risk profile (known as the ‘risk takers’).
- Delegation to the Board of the power to issue contingent convertible bonds (known as AT1 or CoCo bonds) up to €8 billion for a period of five years, in order to address any needs for the issuance of said instruments during that time period. However, the bank’s funding plan expects to moderate the pace of debt issuances in 2021 (no AT1 refinances expected for 2021), thanks to the positive impact, both on liquidity and capital that will occur as a result of the closing of the sale of the U.S. subsidiary. This plan, nonetheless, will be adapted to the decisions the bank makes regarding excess capital generated with said sale.
- Update on the company’s bylaws, as well as the Regulations for the Annual General Meeting, so that the format of the meetings can be flexible (in person, hybrid or, under extraordinary circumstances, 100 percent virtual).
¹ Excluding the goodwill adjustment, capital gains from the agreement with Allianz and AT1 coupons.
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