CaixaBank has started the share repurchase process with the first acquisition in recent days of 18.4 million for 56.8 million euros, as reported yesterday to the National Securities Market Commission (CNMV). That first package represents 3.2% of the maximum monetary amount to which it was committed.
The acquisition prices of shares ranged between 3.03 and 3.14 euros. They are prices lower than those that closed the price yesterday: 3.24 euros after rising 3.75% in the session.
CaixaBank sources reported that "there is no public strategy regarding the share buyback program." The bank plans to report – as it did yesterday – periodically on the purchase process. This shareholder remuneration mechanism is unprecedented in the case of CaixaBank. The commitment reached by the entity led by Gonzalo Gortázar is to allocate 1,800 million euros to the purchase of shares.
Taking into account that in this first package the weighted average price was 3.09 euros, the bank could buy 582 million shares. Although it will depend on the quoted future share price, the bank has agreed not to exceed 10% of the bank's share capital (806 million shares) with the acquisitions.
The repurchase program – managed by Morgan Stanley Europe – will have a maximum duration of twelve months, although the bank reserves the right to terminate it if the maximum monetary amount is previously reached “or if any circumstance arises that advises or requires it”.
CaixaBank presented last week its new strategic plan for the 2022-2024 period, which expects to reach a return of more than 12% by the end of that year, which means practically doubling current levels, and generating some 9,000 million euros of capital.
Within the plan, the bank undertook to remunerate its shareholders in the period with some 9,000 million euros. That amount includes the package of 1,800 million for the repurchase of shares. When a listed company repurchases its own securities and withdraws them from circulation, the remaining shareholders have a larger portion of the company. In theory, measures of this type encourage shares to rise in price as there are fewer shares in circulation. Other large banks are also carrying out these types of measures.
