Swiss banking group Credit Suisse has launched its share buyback programme after securing board approval for the action.
The bank’s board has given the green light to repurchase up to CHF1.5bn of shares. Depending on market conditions, the bank intends to buy back at least CHF1bn of its shares by 2019-end.
Under the move, the bank can repurchase up to 129.8 million of its shares that equates to 5.08% of its capital.
“Credit Suisse Group AG will acquire its own shares on a second trading line on SIX Swiss Exchange subject to deduction of applicable Swiss federal withholding tax. The repurchased shares are expected to be cancelled by means of a capital reduction to be proposed at a future annual general meeting of shareholders,” the Swiss bank said in a statement.
The buyback programme is scheduled to end on 30 December 2019.
The move was first announced last month as the bank neared the completion of a three-year restructuring under CEO Tidjane Thiam.
At the same time, it announced plans to increase the ordinary dividend by at least 5% per year.
The buyback programme is an effort to reward Credit Suisse shareholders who had been with Thiam during the revamp. As part of the revamp, Thiam increased focus on the ultra-high-net-worth segment and axed thousands of jobs.
In spite of the overhaul, the CEO has been under constant pressure to revive the bank’s share price that is said to have stayed flat even after the announcement of the buyback programme.