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22-06-2011

Board Meeting in Mexico

BBVA increases interim dividend 11%

  • Strength: at their meeting today the Board of Directors of the BBVA Group decided to increase the first interim dividend against 2011 earnings by 11%, to ¤0.10 per share
  • Anticipation: the board of directors also decided to convert ahead of the maturity date mandatory convertible bonds issued in 2009, thus anticipating the new core capital criteria in Basel III. These bonds had been placed with customers
  • Protection: BBVA will issue ¤2 billion in new shares in an operation that protects bondholders’ interests by making the conversion at the market price and not at a fixed price per share stipulated at the time of issue 

At their meeting in Mexico today the BBVA Group’s board of directors took steps to increase shareholder remuneration. The board decided to boost the first interim dividend against this year’s earnings by 11% to ¤0.10 per share compared to ¤0.09 per share for the same dividend last year. Furthermore the board decided to anticipate Basel III regulatory changes by early conversion of mandatory convertible bonds issued in 2009, which were placed with customers. For this purpose BBVA will issue ¤2 billion in new share capital. The operation will protect holders’ interests by converting the bonds to shares at the market price.

The BBVA Group strengthened its commitment to shareholder remuneration in a decision today by its board of directors. At a meeting in Mexico City the board agreed to increase the first interim dividend against 2011 earnings by 11%, to ¤0.10 per share. This dividend will be paid on July 8. The corresponding amount paid in July last year was ¤0.09 per share.
 
The board also decided to exercise its option for early conversion of the entire 2009 issue of mandatory convertible bonds. This decision is in line with the BBVA Group’s characteristic anticipation of events. The regulatory changes proposed by Basel III, which had not been defined when the bonds were issued, indicate that these bonds will cease to be eligible as core capital in January 2013. The convertible bond issue was due to mature in October 2014. BBVA will exercise its option on July 15, coinciding with payment of the corresponding coupon. At the end of March the Group’s core capital ratio was 8.9% and the early conversion will have no impact on this ratio because the bonds in question are currently eligible. 

The bond’s design protects holders’ interests because the operation will be carried out at a price per share that is based on the market at the time of conversion. The reference price for the operation will be the average closing price of BBVA shares during the five trading sessions between July 8 and July 14. On July 15 the number of shares per bond will be calculated by dividing the nominal value of the bond by the conversion price. The dividend yield of BBVA’s shares currently exceeds the 5% coupon of the convertible bonds. Therefore the conversion not only protects bondholders' initial investments but also improves their profitability. 

Contact details:
comunicacion.corporativa@grupobbva.com
+34 913746988   

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