MILAN, Oct 10 Reuters BPER will not buy back its own shares over the next three years but rather use dividends to reward investors, its chief executive said, as the Italian bank on Thursday hiked its payout ratio to 75 under a new multiyear strategy.
CEO Gianni Franco Papa told a press conference that though he considered BPER shares to still be undervalued, the strategic plan through 2027 did not envisage any share buybacks.
So we can rule them out for the next three years, he said.
In more than doubling its payout ratio, BPER is catching up with rivals which have used bumper profits driven by the sharp rise in interest rates since 2022 to reward shareholders.
With European bank shares trading at a steep discount, investors have favoured share buybacks over cash dividends in recent years, a trend which is only now moderating as share prices have caught up with the value of banks39; tangible assets.
Busy with a number of acquisitions promoted by its top shareholder Unipol, Italy39;s No.2 insurer, BPER had fallen behind peers in shareholder remuneration.
Under a strategy masterminded by Chairman Carlo Cimbri, Unipol has become the biggest investor in BPER and Popolare di Sondrio, another regional bank, to have a wide bank network to sell its insurance products.
Unipol Chairman Carlo Cimbri said last month that BPER had grown enough and was not in a position to embark on further deals. He has also said a mooted tieup with Popolare di Sondrio would make no sense….