Banking sector on track for dividends exceeding €3 billion

The largest national banks are on track to exceed the €3 billion mark in dividends next year. Although falling interest rates are affecting results, the banking sector continues to post robust profits and the tightening of the financial margin is unlikely to curb generosity towards shareholders.

By September, private banks — BCP, Santander Totta, BPI and Novobanco — had recorded profits of €2.55 billion (Caixa Geral de Depósitos (CGD) will only present its results this week), practically in line with the same period last year, but with different performances among the institutions.

For example, BCP was in “countercycle” with its peers. Profits rose by almost 9% to €775.9 million in the first nine months of the year, with the business in Poland contributing decisively to this growth.

Analysts anticipate that the bank led by Miguel Maya will achieve a profit of close to €1 billion for the whole of 2025. Last week, the CEO recalled that the dividend policy is to distribute half of the net profit. This means that €500 million could end up in shareholders’ pockets in 2026 — not counting the 25% of profits that BCP could allocate to share buybacks.

Spanish banks Santander Totta and BPI are more generous

Meanwhile, Spanish banks Santander Totta and BPI saw their results decline due to a reduction in their financial margins. In the case of Totta, profits fell by more than 6% to €728.2 million, while at BPI they fell by 12% to €389 million.

In the Portuguese market, the two banks are the most generous to their shareholders, with payouts of around 85% and 75%, respectively. In other words, Santander and CaixaBank will continue to receive good cheques from their operations in Portugal, as has been the case in recent years.

The bank led by João Pedro Oliveira e Costa could bolster its balance sheet with the €100 million it will receive from the sale of a 14.5% stake in Banco de Fomento Angola (BFA). But these accounts still need to be finalised, as the manager explained to journalists last week.

“We will assess whether this capital is necessary for the risks we face or for growth. This distribution will be decided by the board of directors with the shareholder”, he said. “I would not conclude that the sale of the stake in BFA will take any particular direction. First, we need to receive it in Portugal in dollars, which will take place in the coming months. Then, depending on activity in Portugal, particularly at BPI, we will assess whether or not to distribute it”, he added.

State receives €1 billion from CGD

The Portuguese state is also preparing to rub its hands together. Caixa Geral de Depósitos will deliver a record dividend of €1 billion next year – which corresponds to a third of the amount that the largest banks will pay their shareholders.

The forecast for the public bank’s dividend is included in the draft State Budget for 2026, which Finance Minister Joaquim Miranda Sarmento presented about a month ago.

CGD CEO Paulo Macedo will only present the accounts for the first nine months of 2025 on Thursday afternoon. In the first half of this year, the bank posted profits of €893 million, practically in line with the result obtained in the same period of 2024, with interest rates affecting the financial margin.

Will Novobanco pay dividends to the French?

As for Novobanco, the change in the shareholder structure leaves everything open. BPCE has just signed the purchase of the 25% stake held by the Portuguese State and has practically a clear path to seal the acquisition of the bank — which could be completed in the first quarter of next year, still subject to authorisation by the authorities.

Will it pay dividends? This will depend on whether the new French shareholder wants to start recouping part of the €6.4 billion investment made in the purchase of Novobanco.

In any case, the bank led by Mark Bourke has already paid dividends (to Lone Star and the Portuguese State) and, therefore, it would not be a first if it did so again. For the next three years, it has a policy of distributing 60% of its annual profits (it made €610 million up to September) and the bank plans to pay shareholders €3.3 billion (including extraordinary dividends and share buybacks). A case for saying: ‘Oh là là!’