BBVA returns to cash dividend payout policy of 35-40% of profit

MADRID (Reuters) - Spain's BBVA said on Thursday it will pay a cash interim dividend of 0.08 euros ($0.09) per share against 2021 results following the lifting of restrictions on remuneration policy by the European Central Bank.

The lender said it will resume a "predictable" and "sustainable" dividend policy, with a 100% payout in cash, equivalent to 35% and 40% of its profit, to be distributed in two annual instalments.

BBVA said it expected to pay its first 0.08 euros cash dividend on October 12 followed by the second and final one in April, 2022.

The ECB said in July it would lift restrictions on bank dividend remuneration and share buybacks beyond September, a crisis measure that forced lenders to retain capital during the pandemic.

BBVA has also announced a share buyback programme of up to 10% of its outstanding capital which the lender has said could start in the fourth quarter.

According to Reuters calculations based on data from Refinitiv, the total buyback would amount to around 3.8 billion euros taking into account the current share price.

BBVA's new dividend policy comes after Spanish rival Santander said on Tuesday it would make an interim distribution from 2021 earnings through a cash dividend and share buyback worth 1.7 billion euros, equivalent to 40% of its first-half underlying profit.

(Reporting by Jesús Aguado; editing by Inti Landauro and Jason Neely)