Dear readers,
At Banco Popular Español, we have a common-sense approach to IR. We have always understood our main goal is to help maximize shareholder value in the long and medium terms and, as much as possible, in the short term. Transparency and timeliness are essential to this strategy.
In practical terms, the maximization of shareholder value is often benchmarked to the trending of the bank’s market capitalization, so we pay close attention to it. But we also realize our performance in the market is a reflection of our track record in management.
We know that major discrepancies between price and management performances are not sustainable, so we try to aim for a message that is realistically attainable. At times, such statements can appear modest, particularly when the stock market is separated from economic reality, such as during the internet bubble in the late 1990s. But, in the long term, communicating an honest and realistic view of our management efforts has been rewarded in terms of relative valuation.
Within the Spanish and European marketplaces, Banco Popular has been quick to implement an efficient IR practice. Since the early 1980s we have had to accommodate a largely institutional shareholder base, and our shareholders have increasingly become non-domestic, with a clear Anglo-Saxon slant. This has made our communication efforts more demanding.
Today, about half our shares are owned by non-Spanish institutions or individuals based in continental Europe, the UK and the US. To cater to all investors, we have a balanced program of meetings and presentations throughout the year. We normally split our one-on-one meetings, of which we had about 300 in 2003, between current and potential shareholders. Most of these meetings are conducted with our CFO and/or our head of investor relations.
In the ordinary course of business, investors wanting to meet with the bank’s management face-to-face can do so around twice a year at most major European and US venues. We also seek to be present in industry conferences wherever they occur, and this practice has made us better known to market participants.
We hold analyst meetings and webcasts on a quarterly basis, and rely on the latter to provide access to investors based outside our normal travel circuit. The material used in these meetings is available on our web site, and we make sure it is posted in a timely manner on the web site of Spain’s main market regulator.
Retail shareholders benefit from all these public disclosures. But we also have a designated retail shareholder office dealing with individual queries. We find that all this contact with investors provides vital feedback from the market, which we try to incorporate into the management of the company. We believe this establishes an effective two-way communication flow that makes us more sensitive to investor concerns.
Ideally, like any other company, we would like to have a solid long-term shareholder base, and consider ourselves lucky to have several long-term holders already. But the reality is money-managers, like companies, have performance targets to meet, too, and that means companies have to disclose information in a timely fashion. At Banco Popular we make a point of keeping abreast of any important developments.
Sincerely,
Angel Ron
CEO of Banco Popular Español
