The Polish unit of Spain's Santander (Santander Bank Polska) logo is pictured in Warsaw, Poland, May 10, 2021.
The Polish unit of Spain's Santander (Santander Bank Polska) logo is pictured in Warsaw, Poland, May 10, 2021. Reuters / KACPER PEMPEL

Spain's Santander on Thursday said its Chief Executive Officer Jose Antonio Alvarez will report exclusively to the bank's board as part of a change in its corporate governance structure while accelerating its digital transformation.

Until now, Alvarez also reported to Chairman Ana Botin, who will keep her executive role.

At many Spanish lenders the chairman holds executive powers and is in control of strategy while the CEO handles day-to-day business.

Supervisors of euro area banks favour a division of roles between the chairman and the CEO, with sound governance one of their key priorities.

Santander also announced changes to its operational structure to accelerate its digital transformation as lenders try to fend off competition from new internet-based entrants while still grappling with ultra-low interest rates.

The bank said new tech units, PagoNxt and Digital Consumer Bank, would be supervised by Botin, while Santander's regions, countries and global businesses would continue to report to Alvarez.

The lender also said it would propose German de la Fuente, who previously worked for consultancy Deloitte, as an independent director at a shareholder meeting on April 1.

The bank plans to pay a final cash dividend of 5.15 euro cents per share and will launch a share buyback of 865 million euros ($962 million) against 2021 earnings, on top of an already paid cash dividend of 4.85 euro cents per share and a buyback of 841 million euros, it said.

As a result, the total capital distributed to shareholders would be around 3.4 billion euros.

Shareholders would also be asked to approve a reduction of the group's outstanding share capital of up to 10% by cancelling shares it may acquire, including under potential repurchase programmes in the future.

($1 = 0.8991 euros)