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Grupo Financiero Santander Mexico Announces Approval Of Capital Optimization Program

MEXICO CITY, Dec. 13, 2013 /PRNewswire/ -- Grupo Financiero Santander Mexico, S.A.B. de C.V. (BMV: SANMEX; NYSE: BSMX) ("Santander Mexico" or the "Company") one of the leading financial groups in Mexico, today announced that, in accordance with its previously announced capital optimization strategy, an Ordinary and Extraordinary General Shareholders Meeting was held, at which, among other items, Santander Mexico approved: i) advancing payment to its shareholders of the cash dividend from retained earnings in the amount of Ps.4,900 million, or Ps.0.72 per share, previously approved at its Shareholders' Meeting held on August 20, 2013, to December 27, 2013 from the original date of February 25, 2014; and ii) payment of a cash dividend from retained earnings to its shareholders in the total amount of Ps.12,000 million, or approximately Ps.1.77 per share, to be paid on December 27, 2013. Separately, an Ordinary and Extraordinary General Shareholders Meeting of its subsidiary Banco Santander ( Mexico), S.A. Institucion de Banca Multiple, Grupo Financiero Santander Mexico was held, at which the Bank authorized the issuance of subordinated notes that comply with capital requirements under Basel III for Tier 2 capital in an aggregate amount of approximately U.S. $1,000 million, subject to market conditions and regulatory approvals.

As a result, on December 27, 2013 Santander Mexico will pay its shareholders a total dividend of Ps.16,900 million (approximately U.S. $1,300 million based on an exchange rate of 13.0). In 2014 and subsequently thereafter, the Company expects to continue its practice of paying annual dividends equivalent to 50% of its retained earnings, although dividend payments will ultimately be subject to annual earnings and shareholders' resolutions.

Banco Santander S.A. ( Spain) has expressed its intention to purchase 75% of the debt issuance referenced above under market conditions and to ensure its complete subscription.

Upon consummation of these capital optimization initiatives, it is estimated that the Bank will maintain a Tier 1 capital ratio of at least 12% and a Tier 2 capital ratio of approximately 2.5%.

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