VILNIUS - Šiauliu Bankas AB, a Lithuanian bank, has announced a share buyback program set to commence on Wednesday. The move comes after receiving the European Central Bank's (ECB) nod on November 16, 2023. The bank intends to repurchase up to 3,522,571 of its shares for two primary purposes as outlined by Tomas Varenbergas, a key figure at the bank.
The buyback will take place on Nasdaq Vilnius over two days, with the transactions scheduled for November 22-23. Shares will be bought back at a rate of €0.66 per share under the ISIN LT0000102253. Of the total shares targeted for repurchase, 2,272,571 are earmarked for employee remuneration in accordance with Lithuania’s Company Law Article 54 (2).
Varenbergas highlighted that this strategic move serves dual goals. Firstly, it aims to compensate the bank's employees, aligning with their interests and incentivizing their performance. Secondly, this marks a potential step towards reducing the bank's capital—a tactic not previously employed by Šiauliu Bankas but one that is common in the market. Such buybacks are often executed when shares are perceived as undervalued or when there is an expectation of an increase in their value.
The underlying strategy behind this program is to enhance shareholder wealth. By reducing the number of outstanding shares, earnings per share could potentially increase, providing greater value to shareholders.
The bank has also issued a cautionary note regarding the buyback information, stating that there may be potential delays in data and that there are no guarantees of accuracy or completeness. This suggests that shareholders and market observers should consider the provided details with an understanding of these limitations.
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