European banks need mergers not dividends

It’s ironic that Banco Santander is leading the charge back to cash dividends, given it has one of the lowest capital ratios in European banking.

Its millions of Spanish retail investors largely explain Santander’s eagerness to push for shareholder approval now. It is aiming for a 50% cash dividend payout over its 2020 earnings, paid early next year. Many of these investors rely on such dividends for their income.

However, it also shows how hard banks are lobbying ahead of a European Central Bank (ECB) decision in December on whether to lift the dividend ban.