2025 European dividend trends

The take

• In 2025, European dividends are estimated to grow by 3.5% to €486.1 billion (excluding special dividends), driven by the banking, insurance and capital goods sectors, despite declines in the materials and automotive sectors. This is a slowdown from 2024's 7.5% growth.
• Dividends are expected to grow by 3.2% to €501.6 billion in 2026 (excluding special dividends), led by the insurance and pharmaceuticals sectors, with the automotive sector remaining a drag.
• Banking dividends have surged significantly, with a year-over-year increase of 28.5% in 2023 and 30.4% in 2024, and are projected to grow by 9.6% in 2025, driven by interim dividend initiations from BNP Paribas SA, BPER Banca SpA and Banco de Sabadell SA, despite falling interest rates. Dividend growth is expected to plateau at -0.2% in 2026.
• The aerospace and defense sector is projected to grow by 36.4% in 2025 to €7.4 billion, benefiting from geopolitical tensions, but is expected to moderate to 12.1% growth in 2026, while the automotive sector is facing a significant decline of 27.0% in 2025, followed by an additional 11.4% drop in 2026 to €15.2 billion due to intense competition and proposed tariffs.
• The materials sector's dividends are expected to fall to €25 billion in 2025, a 13.6% drop to pre-pandemic levels, after a record €34.2 billion in 2022, but are projected to rebound by 4.1% in 2026, driven by gold and other major mining companies.
• Since January 2025, our 2026 dividend estimates rose by 2.1% in banking but fell by 6.4% in insurance, 3.9% in energy and 5.7% in materials primarily due to a weakened US dollar. A notable 16.3% drop in automobiles stems from proposed tariffs on US imports.
• Between April and May 2025, the announcement of US President Donald Trump’s April 2 tariffs as well as first-quarter company financial results significantly impacted earnings, with the automobile and mining sectors experiencing sharp declines in dividend per share (DPS) and earnings per share (EPS). In contrast, the capital goods and oil and gas sectors demonstrated resilience in DPS despite overall EPS declines.
• The EU is moving to a T+1 settlement cycle for securities transactions by Oct. 11, 2027, with key latest developments including regulatory amendments, a negotiating mandate and a three-phase roadmap.
• BNP Paribas' shift to semiannual dividends has influenced the sector, with Société Generale SA considering a similar move. Crédit Agricole SA remains neutral, while Axa SA's new policy includes a high payout ratio but no interim dividends yet.
• Banco de Sabadell and Bankinter SA have moved to thrice-yearly dividends, with CaixaBank SA as a potential candidate to follow this trend. Commerzbank AG and Deutsche Bank AG have maintained annual payments, with Deutsche Bank citing legal restrictions on interim dividends.