Butterfield chairman Brendan McDonagh says the share buyback programme is a way to to return value to the shareholders. *Photo supplied
Butterfield chairman Brendan McDonagh says the share buyback programme is a way to to return value to the shareholders. *Photo supplied

WEDNESDAY, MAY 2: The Bank of N.T. Butterfield & Son Limited announced that it would introduce a Share Buyback Programme of up to 6 million Common Shares and 2,000 Preference Shares at market prices on the stock exchanges on which Butterfield Shares are listed.

New board chairman Brendan McDonagh told the Bermuda Sun that Butterfield had built up capital and this was a way to return value to the shareholders.

He said: “We looked at taking some of the accumulated capital and returning it back to the shareholders. We didn’t want to pay out to the common dividend.

“We decided to explore the option of a share buyback programme. The specific reason why that was an attractive option over other option was that there is very little liquidity in our shares in the BSX at the moment. In part that’s due to the fact that 70 to 80 per cent of the shares are held by a limited number of institutions and those shares are not going to be traded — they are long-term holds.

“We prefer to try and put some liquidity into the market for the Butterfield shares.

“We’ll have to see what the interest is over the next few months. We’re assuming there are some shareholders out there who would like to reduce their holding but they are not able to under the current level of turnover in the market.

“Hopefully the share buyback programme will help them. We hope this will give a bit more consistency to the share price in the market.”

This year the share price has varied from 99 cents to $1.30.

The six million common shares represents just over two per cent of the shares it has listed on the Bermuda Stock Exchange.

Butterfield has a primary listing on the Bermuda Stock Exchange, on which its Common Shares and Preference Shares trade actively.

Butterfield maintains a secondary listing on the Cayman Islands Stock Exchange. Preference Shares are additionally listed on the Luxembourg Stock Exchange for trading the Euro MTF Market.