LM, scrip moves make for heavy Spanish dilution

Spanish banks’ reliance on liability management, scrip dividends and disposals to meet their European Banking Authority capital deficits has been far from costless, with heavy EPS dilution for shareholders. Efforts to increase core tier one at Santander and BBVA by 2.9% and 2.2% respectively, have resulted in 24% and 20% earnings dilution, according to Barclays Capital estimates.