After the takeover of Sabadell was announced, the Spanish Bank of Bilbao (BBVA.US) offered the biggest repurchase in history

The Zhitong Finance App learned that the Spanish Bank of Bilbao (BBVA SA, BBVA.US) said it will carry out the largest share repurchase in its history to put an end to its failed takeover offer for Banco Sabadell SA (Banco Sabadell SA).

The bank issued a statement on Friday saying it has received authorization from the European Central Bank to implement a stock repurchase plan totaling up to 3.96 billion euros (4.6 billion US dollars). The plan will be implemented in stages and will last approximately 12 months. The statement confirmed an earlier report. The first batch of buybacks worth €1.5 billion will be launched on Monday.

Analysts have been expecting BBVA to announce a large-scale buyback plan, with an estimated total size of up to 6 billion euros.

BBVA's bid to buy Sabadell Bank, worth $19 billion, failed in October last year, when the deal was rejected by an overwhelming majority of shareholders of the smaller rival. Although BBVA shares rose after the news was announced as investors welcomed the end of months of uncertainty, this was a major setback for CEO Onur Gench and Chairman Carlos Torres, who have been working hard for a year and a half to complete the deal.

BBVA said at the time that it would switch to a “major” share repurchase. Earlier this week, it was reported that the bank has been looking for consultants to launch the first batch of around €2 billion buybacks, with more likely to follow.

Gench said on Friday that BBVA “is and will continue to be a very compelling story that combines growth, profitability, and excellent shareholder returns.”

BBVA announced new strategic goals in July, including a commitment to create €49 billion in capital over four years up to 2028. The bank said it would return most of it to shareholders.

As of the end of September, the Spanish bank's primary common stock capital adequacy ratio (CET1 ratio, a key measure of capital strength) was 13.4%, far above its target range of 11.5% to 12%. According to reports, this 3.96 billion euro repurchase plan is equivalent to reducing its CET1 ratio by 100 basis points.

CFO Luisa Gomez Bravo said BBVA remains “committed to returning excess capital generated by exceeding the upper limit of our capital target range (12%) to shareholders in a prudent and continuous manner.”