Banco Santander Share Discussion Threads

[pvb] 09/7/2014 13:34

"will be paid a dividend of 0.2048 per share on Monday, August 11th."

Rather amusing that the presumably US based WKRB News & Analysis is stumped with coming up with a Euro (€) symbol. :-)

[leebong] 09/7/2014 12:59

BNC increased its divi today from 15c to 20c a share...what a great stock to have for income and growth...:-)

Banco Santander, (NYSE:SAN) announced a special dividend on Tuesday, July 8th, Analyst RN reports. Investors of record on Monday, July 14th will be paid a dividend of 0.2048 per share on Monday, August 11th. The ex-dividend date is Thursday, July 10th.

On a related note, analysts at RBC Capital upgraded shares of Banco Santander, from an "underperform" rating to a "sector perform" rating in a research note on Wednesday, June 18th. Three analysts have rated the stock with a sell rating and five have given a hold rating to the company's stock. Banco Santander, presently has an average rating of "Hold".

Banco Santander, (NYSE:SAN) traded down 2.31% during mid-day trading on Tuesday, hitting $10.16. 7,884,761 shares of the company's stock traded hands. Banco Santander, has a one year low of $6.36 and a one year high of $10.75. The stock has a 50-day moving average of $10.39 and a 200-day moving average of $9.55. The company has a market cap of $117.2 billion and a P/E ratio of 19.19.

[4spiel] 08/7/2014 12:56

I hold Banco San in a trading account in Euro -not in an ISA. I have the choice with dividends to receive new shares free of Spanish withholding tax or to receive cash in a few optional choices that require payment of Spanish withholding tax at 21%. Normally I take shares -last time I took cash less 21% and I received my money only a few days ago -I had given up on it -so it was reassuring and useful as I use and spend Euro. The only complication I think is to fill in a Spanish tax return upon a disposal of stock within 30 days or be liable to a fine which can be done easily but its my information that small disposals up to 1500 euros in one year 1.1 -31.12 are exempt from Spanish CGT. So taking some shares and a bit of cash in the final dividend looks a good mix to me -the HMRC just get a copy of the brokers annual statement showing dividend and ta paid and you get 10% tax credit. It seems BNC Nominee Service is good if you do not have an account in which you can hold stock in Euro.I walked into a Banco Santander branch in UK to try to find out if there was any advantage in holding stock in this way for a UK tax resident investor but they knew nothing and were not the least bit interested where you could find out!

[leebong] 02/7/2014 16:42

we should reach 645p by next wednesday...for ex divi day.

[tonio] 29/6/2014 16:22

Sorry for the delay in replying. Yes, you found the right site.

On tax credits and stuff here's what Which says about dividends.

'Dividends are automatically taxed (called 'taxed at source') at the rate of 10%. This is regardless of whether you choose to reinvest it or have the dividend paid in cash. The 10% deducted is called a tax credit.

Basic-rate taxpayers, you have no further tax to pay.
Non-taxpayers also have this tax deducted and can't claim it back.
Higher-rate taxpayers pay a further 22.5% of the gross dividend (making a total of 32.5%)
Additional rate taxpayers pay an extra 27.5% (making a total of 37.5%).'

I guess I recall the early golden age of ISAs: (info from isaco site)

'April 6, 1999 - Gordon Brown introduces ISA's to replace PEP allowances. Dividend taxation also changes, the tax credit attached to dividends falls to 10%. ISA and Pep managers can reclaim this tax credit. The ISA allowance is £7,000'

This lasted 5 years until:

'April 6, 2004 - ISA and PEP managers are no longer allowed to reclaim the 10% tax credit attached to dividends. This leaves ISA investors £10.00 worse off for every £100.00 gross dividend paid.'

This still rankles - still, rough with the smooth, the new regime of interchangeable NISAs with the £15000 limit are certainly an improvement.

[pvb] 27/6/2014 15:30

If interested, there's a bit of discussion of all this on the lse BNC board.

Do you mean London South East? If so, I see iWeb offer the scrip dividend in an ISA (also I believe Halifax Share Dealing do - same service really) so that sounds interesting.

I really need to reorganise all my accounts and holdings, but I'm lazy (and mean!)

[pvb] 27/6/2014 14:05

Well sure, no worries; the only point of mentioning the 10% 'nominally' deducted by companies was that this is applied by UK companies to both dividends and scrip dividends.

Hi tonio! Just to gently point out again, nothing is deducted by UK companies from the dividend, it is just paid out. The taxation of dividends depends on the tax status of the recipient. The 10% Tax Credit is just that, you are credited with having 'paid' it, it cancels out the nominal 10% Base Rate Tax on dividends, so a BR Taxpayer doesn't have to pay anything more. The company has already paid its Corporation Tax on the income from which the dividends come and the 10% Tax Credit is intended to at least partially offset this.

As you say, the Spanish witholding tax is actually cash deducted at source from the company dividend (same with US witholding tax etc) which is why the cash dividends received from BNC are indeed shown as nett dividends. The only effective way round this is, as you say, to choose the scrip dividend, if you can.

Hope you are well rewarded for holding BNC!

[tonio] 27/6/2014 09:42

Well sure, no worries; the only point of mentioning the 10% 'nominally' deducted by companies was that this is applied by UK companies to both dividends and scrip dividends.
With Santander when we received cash dividends Spanish tax had been deducted,
now we can receive scrip dividends no tax is deducted.
If interested, there's a bit of discussion of all this on the lse BNC board.

[pvb] 26/6/2014 23:22

tonio 26 Jun'14 - 22:07 - 103 of 103 0 0

Sorry pvb, no disrespect, but your first sentence is very mixed up. Both outside an ISA and inside an ISA dividends are paid by UK companies nett of 10% tax (the tax credit) -

Err... No. How can a Tax Credit be a deduction?

You are 'credited' with having paid 10% Tax on UK company dividends (The Tax Credit - the clue is in the name). As the standard rate of tax on company dividends is 10% that means the 10% Income Tax charge on dividends results (for Basic Rate Taxpayers) in a tax charge of 10% - 10% = 0%

Zero percent of anything is zero.

If you are a higher rate taxpayer then the 10% Tax Credit does not cover the full income tax rate on dividends and you do have to pay personal tax on the dividends - outside of an ISA.

There is no tax 'witheld' on normal UK dividends, they are just paid out to everyone at the same rate. Because the dividends are paid out of the companies nett income, after corporation tax, the 10% thingy is reckoned as going some way to offset the corporation tax already paid by the company on its earnings.

Companies pay their company tax rates, dividend recipients pay their tax rates. The days when UK companies were attributed as paying cash for the company taxes and partly the personal taxes of their investors have long gone.

As I understand it this scrip option is only open to shareholders holding their shares in the Santander Nominee service - but this may be wrong. Certainly they provide a very good service - at no charge so far.

Some brokers allow a choice, some insist on it, some (my ISA provider) don't permit it.

[tonio] 26/6/2014 22:07

Sorry pvb, no disrespect, but your first sentence is very mixed up. Both outside an ISA and inside an ISA dividends are paid by UK companies nett of 10% tax (the tax credit) - to avoid doubt, the gross value of the dividend is the nett value you are paid plus the tax credit. In your sentence it should say: 'the dividends come WITH TAX having been taken off'. If a 40% tax payer then, outside an ISA, you have to pay an extra 22.5 % tax on the gross value. If you pay at 50% then its an extra 27.5%.

For companies in the UK the tax situation of cash dividends and scrip dividends is the same - 10% tax is applied before you receive either.

For a company like BNC in Spain dividends are apparently treated differently to scrip dividends as regards tax.

For UK citizens scrip dividends are not subject to Spanish withholding tax or UK income tax. Neither is the residue ( the bit left over when the dividend was converted in to scrip ) as this is consolidated with residues from other shareowners stock to buy new shares that are then sold and distributed back as residues. Thus the residue is subject in principle to UK capital gains tax as it results from selling shares -it's so small though this will not usually involve any tax charge.

As I understand it this scrip option is only open to shareholders holding their shares in the Santander Nominee service - but this may be wrong. Certainly they provide a very good service - at no charge so far.

[pvb] 26/6/2014 20:01

tonio, if your dividends are received outside and ISA then, in general (ie UK shares) the dividends come without any tax having being taken off - if you are a Basic Rate Taxpayer (allowing for the grossed up dividends) then you do not owe any personal income Tax on then. If a Higher Rate Taxpayer or above then you will have to pay some income tax on dividends at the appropriate rate.

BNC shares are in a Spanish company and Spanish Witholding Tax (21%) is always taken from the dividend at source before being paid to the recipient.

This can be mitigated (in principle) but not entirely repaid, by mutual agreements between the Spanish and UK governments. But Spain does not sound as if they play ball! Holding BNC shares in the Santander Nominee Service is the best route to applying this to cash dividends, as Santander will do the work for you.

Inside or outside an ISA, or in the Santander Nominee Service, using the scrip dividend means NO Spanish witholding tax deducted at source. Unfortunately not all UK brokers will allow this option in their nominee account. My ISA broker does not for one.

I am thinking of moving my BNC shares to another broker even if outside an ISA.

[tonio] 26/6/2014 12:50

Sorry to go on but I now understand that Option1 -scrip dividend plus residue - is not available if you have your holding in an ISA, only if you hold it in the Santander Nominee Service. There, you are getting an investment outside an ISA on which your 'dividends' are effectively 'income tax'-free. Capital gains tax of course does apply on sale of shares so that has to be taken into account if you have a substantial holding, but the tax-free and charge-free'dividends reinvested'increase of your holding seems to balance that out.
Quite interesting really.

[tonio] 26/6/2014 11:44

Well of course all the info I gave you was my understanding of Santanders faq pdf download for UK investors.It all seems very clear:
No Spanish withholding tax
No UK tax on the scrip dividend
No UK tax on the residue.
It just seems too good to be true.
By the way in your ISA of course you have to pay tax on dividends, perhaps you should check if tax has been paid on your BNC dividends this year - you may have been put on
option 3 - sell your rights off-market for cash; this is subject to spanish withholding tax
or option 2 - sell your rights on market, not liable to spanish tax but maybe liable to uk tax.
So, sorry, you may have a worry.
It's all a little bit complicated.

[pvb] 26/6/2014 11:10

All my BNC is in an ISA, so I don't need to worry about such details (just others!) and can't really answer your question.

Perhaps somebody in a similar position here, or Gengulphus over on the TAX thread can help.

Certainly, if you can take the scrip dividend you do avoid the Spanish witholding tax, currently 21%, on the cash dividends. Possibly, if you hold BNC in the Santander Nominee Service account they may be able to help alleviate the full amount of the Spanish witholding tax, but outside that it sounds more trouble than it's worth.



And see: Santander Scrip Dividend link.

[tonio] 26/6/2014 10:59

Just been filling in a tax return and I find that this last year Santander put us on scrip dividend Option 1 - receive newly issued shares and any residue left paid as capital. This seems a great deal - basically no tax to pay in Spain, no tax to pay in UK and an effective dividend yield over the year of about 10%, depending on share price performance.
Have I misunderstood the tax situation?

[captcash] 06/6/2014 18:35

another good rise today
wait until qe is announced
this will go through the roof
700 plus this year imho

gla

[pvb] 05/6/2014 10:42

Further small uptick in S&P ratings of the bank:

[pvb] 29/5/2014 20:38

Seems to be on the up once again.

Keep well away.

Well I didn't!

[its the oxman] 27/5/2014 09:48

Looking strong today at 606p.

[dendria] 12/5/2014 14:27

Scrip shares added to account this morning (IWeb).

[cwa1] 09/5/2014 07:50

A largish chunk of additional Tier 1 funding has been raised:-

MATERIAL FACT

Further to the material fact notified earlier today, Banco Santander, S.A. ("Banco Santander" or the "Bank") informs that, following completion of the accelerated bookbuilding process, the final terms and conditions of the issue of contingent perpetual preferred securities convertible into newly issued ordinary shares of Banco Santander (the "Issue" and the "PCCS"), for a nominal value of U.S. $ 1,500,000,000, have been approved.

The PCCS will be issued at par and its remuneration, whose payment is subject to certain conditions and to the discretion of the Bank, has been set at 6.375% on an annual basis for the first five years. After that, it will be reviewed by applying a margin of 478.8 basis points on the five-year Mid-Swap Rate.

Banco Santander has requested the Bank of Spain to qualify the PCCS as additional tier 1 under the European Regulation 575/2013. The PCCS are perpetual although they may be called under certain circumstances and would be converted into newly issued ordinary shares of Banco Santander if the common equity Tier 1 ratio of the Bank or its consolidated group, calculated in accordance with European Regulation 575/2013, were to fall below 5.125%. An application will be made for the PCCS to be admitted to trading on the Global Exchange Market of the Irish Stock Exchange.

[dendria] 08/5/2014 17:03

SAN straight through $10.00 - can it hold this time?