Deutsche Bank (DB) Rewards Investors, Completes Share Buyback Plan
Deutsche Bank AG DB has announced the completion of its share repurchase program. On Jul 25, 2023, Deutsche Bank received supervisory approvals for share repurchases of up to €450 million by 2023 end, which was 50% higher than in 2022.
Under the said plan, DB repurchased 45.5 million shares at a weighted average price of €9.88 per share between Aug 2 and Dec 8 of 2023.
Before this €450 million plan, Deutsche Bank had authorized a share repurchase program of up to €300 million on Jan 26, 2022. On Apr 25, 2023, it completed buybacks under the said program by repurchasing around 26.5 million shares at an average price of €11.3079 per share.
Apart from successful share repurchases, the company pays dividends to enhance shareholder value. Although the company did not pay any dividends in 2020 and 2019, it plans to return excess capital to shareholders through dividends and share buybacks in the near term. Management paid a dividend per share of 30 cents for the year 2022 in May 2023. This aggregated €0.6 billion and represented a hike of 50% from the prior payout.
Combining the dividend payments and share repurchases undertaken in 2023, DB returned more than €1 billion to shareholders in capital distributions. Also, the total capital distributions in 2023 and 2022 aggregated to approximately €1.77 billion.
Further, the management of Deutsche Bank expects to hike dividends by 50% in 2023 and 2024 each and achieve a payout ratio of 50% from 2025 onward. Such capital distributions are in line with the management’s intention to return around €8 billion to shareholders through the financial years 2021-2025.
Supported by its strong balance sheet position and favorable payout rate compared with the respective industry, Deutsche Bank is expected to continue with efficient capital distribution activities. Such consistent distributions will likely stoke investors’ confidence in the stock.
DB shares have gained 21.4% on the NYSE over the past six months compared with the industry’s 7.9% growth.
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Currently, DB carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Finance Firms with New Share Repurchase Plans
Earlier this month, several companies rewarded shareholders with new share repurchase programs. Two of them are as follows:
Byline Bancorp, Inc. BY authorized the repurchase of up to 1.25 million shares. The program will commence on Jan 1, 2024, and expire on Dec 31, 2024. The repurchase authorization represents 2.9% of Byline’s outstanding common stock.
Roberto R. Herencia, the executive chairman and CEO of BY, stated, “The new share buyback authorization, which we believe is consistent with our disciplined approach, demonstrates our continued commitment to using this tool as part of our capital management strategy.”
Victory Capital Holdings, Inc. VCTR announced that its board of directors authorized the repurchase of up to $100 million of common stock through Dec 31, 2025.
David Brown, chairman and CEO of VCTR, commented, “This new repurchase authorization allows us to remain flexible and opportunistic with our capital allocation.”
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