After the acquisition of Sadars fell through, the Spanish Bilbao Vizcaya Argentaria bank (BBVA) announced the largest buyback in history.

Spain's Banco Bilbao Vizcaya Argentaria (BBVA SA, BBVA.US) has announced that it will carry out its largest ever stock buyback in response to the failed acquisition bid for Spain's Banco Sabadell SA. In a statement released on Friday, the bank stated that it has received authorization from the European Central Bank to execute a stock buyback plan with a maximum total amount of 3.96 billion euros (4.6 billion dollars). The plan will be implemented in phases over approximately 12 months. The statement confirmed earlier reports. The first phase of the buyback, valued at 1.5 billion euros, will begin on Monday. Analysts had been anticipating that BBVA would announce a large-scale buyback plan, with estimates of the total amount potentially reaching 6 billion euros. BBVA's bid to acquire Sabadell, valued at 19 billion dollars, failed in October of last year when this smaller competitor's bid was vetoed by the majority of shareholders. While the news of the buyback was welcomed by investors as a resolution to months of uncertainty, the failure of the deal was a major setback for CEO Onur Gen and Chairman Carlos Torres, who had worked on the transaction for a year and a half. BBVA had previously stated that it would instead pursue a "significant" stock buyback. Earlier reports this week indicated that the bank had been seeking advisors to launch an initial buyback of around 2 billion euros, with potentially more to come. Gen stated on Friday that BBVA is now "a very attractive story, and will continue to be so, combining growth, profitability and outstanding shareholder returns." In July, BBVA announced new strategic targets, including a commitment to create 49 billion euros in capital over the next four years ending in 2028. The bank stated that most of this will be returned to shareholders. As of the end of September, BBVA's Common Equity Tier 1 capital ratio (a key indicator of capital strength) was 13.4%, well above its target range of 11.5% to 12%. It is reported that this 3.96 billion euro buyback plan would reduce its CET1 ratio by 100 basis points. Chief Financial Officer Luisa Gmez Bravo stated that BBVA remains "committed to prudently and consistently returning excess capital generated beyond our target range (12%) to shareholders."