The Westpac Banking Corp (ASX: WBC) share price has been a very strong performer on Monday morning.
At the time of writing, the banking giant's shares are up a sizeable 3% to $23.45.
Why is the Westpac share price rising today?
The catalyst for the rise in the Westpac share price this morning is news that it has completed its off-market share buyback.
According to the release, Westpac has bought back $3.5 billion worth of its shares following strong demand from shareholders. This equates to 167.5 million shares or 4.6% of its issued capital.
The bank was able to undertake this buyback at $20.90 per share, which represents a 6% discount to the volume weighted average price over the last five trading sessions.
This buyback price comprises an $11.34 capital component and a $9.56 dividend component. All in all, this means the tax value of the buyback is $24.14 per share, which is a 6% premium to the Westpac share price at Friday's close.
As a result of this program, Westpac's CET1 capital ratio will reduce by 79 basis points.
Strong demand
Due to strong demand, Westpac advised that all eligible shares tendered at a 7% discount or greater were accepted in full at the buyback price. However, some shareholders tendering shares at a 6% discount were scaled back and shares offered at a 5% or less discount were not bought back.
Payments for the shares bought back will commence later this week on 18 February 2022 via direct credit.
Westpac's CFO, Michael Rowland, commented: "We are very pleased to have completed the $3.5 billion Buy-Back, reducing the number of shares outstanding by 4.6% of issued capital. The Buy-Back improves our capital efficiency, returns franking credits and reduces our share count for the benefit of all shareholders. Westpac's capital position remains strong after completing this BuyBack."
