The ECB cap on the pay-outs (share of profits to be distributed to shareholders in the form of dividends) of the banks ends today. Managed savings companies with banking status, Bestinver Securities pointed out in a note today, are the ones that should pay the most, if you put together the 2019-2021 pay-out, which is expected to be cashed by the end of the second quarter. 2022.
“Among the traditional banks, Intesa Sanpaolo and Mediobanca are our key choices,” added Bestinver. While Anima’s low valuation, but rich cash flow so far lead to a 6.5% return this year. As for the pay-out of Poste Italiane, it is seen on the rise pending the presentation of the new 2022 budget. suspended for all of them: “any hypothesis of aggressive pay-out can be, at this moment, a bit risky”, according to Bestinver.
More generally, the broker continued, most European Union banks convene a board of directors and / or a shareholders’ meeting to establish new pay-out policies, including dividends and buybacks (purchase of own shares). Below is the table that collects the pay-out expectations according to the Factset consensus for the financial securities that Bestinver covers.
Based on the 2021 estimates, Intesa Sanpaolo (16 euro cents per share and 6.6% yield), Mediobanca (66 euro cents per share and 6.5% yield) and Anima (27 euro cents per share and yield of 6.5%) are the best payers for this year’s dividend. Considering what happened in 2020 regarding the dividend distribution and the ban on the SSM (Single supervisory mechanism), “we believe that most financial firms will now opt for the payment of an interim dividend, if not yet approved, by the end of the year and a top-up in May / June the following year “.
Last, but not least, “It is a bit strange to see that most banks are expected to unveil new business plans soon, making any current aggressive dividend / buyback assumption challenging enough: Banco Bpm has delayed submitting its plan due to of the problems related to Covid-19, Intesa Sanpaolo and at the end of its and Unicredit / Bper Banca have brand new management teams and are immersed in sophisticated M&A situations, which could actually affect the distributable capital base “, emphasized Bestinver. deepening his expectations regarding the pay-out strategies of the companies he covers. Intesa Sanpaoloand the usual “call” on dividends; a “first-class payers”: “we believe that the next plan will not be a U-turn on this topic”, predicted Bestinver, recalling that since Messina became CEO of the bank there have been high cash dividends but no buy-back. Intesa Sanpaolo has so far paid 700 million euros on the 2020 results and the consensus expects that another 1.9 billion euros will soon be paid, again on the 2020 numbers. The 2021 yield, 6.6%, “remains quite high too. if the new plan could change these expectations. ” Mediobanca
‘s results for the yearin June 2021 they incorporate a dividend already approved of 66 euro cents, which makes it an attractive 6.5%. The bank is also expected to top up its all-in 2021 yield given the likely 3% buyback program being reset annually (22.6 million shares repurchased in 2020). Everything is subject to the authorization of the ECB / shareholders’ meeting. Unicredit
‘s payout is ready to benefit from its high capital base, “but the M&A framework in which the bank has entered (Mps,” is not seen to pay anything in the short term “), combined with higher headwinds than the average on Cet1 it could suggest a more conservative approach on the payout strategy that the new CEO, Andrea Orcel, could unveil soon “.
Instead,they could resume their ordinary dividend policy, “but we would not expect a massive recovery like in previous years”. It is quite another matter for Anima which can count on a strong cash generation. Management admitted that this is exceeding its expectations and therefore will require reflections on the return of capital to shareholders, “which should increase significantly thanks also to the tax relief on goodwill, clearly based on extraordinary transaction scenarios”.
Most wealth management firms with banking status are expected to pay a “mid-single digit” return on 2021. Given their banking status, but the low capital consumption associated with their core business, they should recoup most of this. who were not allowed to pay. “In this case the 2021 yield clearly reflects their relatively much higher price / book value valuation than their high payout of around 65-80%,” Bestinver said.
The case of Finecoit explains itself: the stock is trading at over 6 times the book value and despite a pay-out of almost 80% the return in 2021 is less than 3%. In addition to this, Fineco plans to pay 53 euro cents on the 2019-2020 results. Banca Mediolanum / Banca Generali are more or less in the same situation.
Banca Mediolanum with a 2019-2020 dividend of 78 cents (2.67 paid in May 2021 plus 41.33 residual for 2020 and 34 on the 2019 dividend balance); Banca Generali with a 1.25 euro dividend floor on the 2021 results already assigned, to which the 3.3 euro approved for the 2019/2020 financial years must be added. Italian postshould soon unveil the new 2022 budget: “its 2021 dividend of 55 cents and, we believe, written in stone, but we expect a top-up for 2022 compared to what was expected: average annual growth rate of + 6% in the period 2022 -2024 “, concluded Bestinver. (All rights reserved)

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