Market uncertainty undoes Swedbank share buyback programme
Swedbank has announced a halt to its controversial programme of buying back shares to boost its Core Tier 1 capital ratio, citing stock market uncertainty across Europe.
The decision to suspend the programme was taken by the Swedish bank’s board after an urgent request put by management under chief executive and president Michael Wolf.
“During the past weeks, the situation in Europe has worsened significantly. We see today no altered risk in our portfolio, but the perception of our buyback program is not supporting Swedbank’s brand in the current market situation. On my recommendation the Board have decided to halt further repurchases until the market situation becomes clearer,” he said in a statement.
The company was given the right to buy back shares through a vote at its 2011 annual general meeting (AGM). It can buy up to 10% of outstanding shares through a period to its 2012 AGM.
The buying is intended to take the bank to a target Core Tier 1 capitalisation ratio of 13%, adopted following earlier stress tests. Buying has been ongoing since 29 April, the bank said.