Butterfield Bank hopes a programme to buy back up to $10 million of its shares will boost liquidity of the stock.“At the moment a significant number of shares are held by a limited number of institutions,” the new executive chairman of the bank, Brendan McDonagh, told The Royal Gazette yesterday. “There is not a liquid market in our shares.”He pointed to recent “wide swings” in share price which he said were driven by only one or two trades.He said Butterfield had, therefore, decided to deploy surplus capital to a share buyback programme.Butterfield shares closed at $1.30 yesterday. They climbed more than seven percent last week; the shares hit a low of 99 cents on April 3.“It will be interesting over the next three months to see how successful the (buyback) progamme is,” Mr McDonagh said.Butterfield has almost 550 million common shares outstanding, the vast majority of which are held by a small number of institutional investors. It has some 200,000 preference shares outstanding.At December 31, 2011, the following held five percent or more of the issued share capital:- Canadian Imperial Bank of Commerce (18.64 percent)- Carlyle Global Financial Services Partners LP (18.64 percent)- Wellcome Trust Investments, (6.88 percent)- Ithan Creek Master Investor (Cayman) LP (6.71 percent)- Rosebowl Western (6.71 percent)Butterfield announced this week that it will introduce a share buyback programme, that will enable it to repurchase up to six million common shares and 2,000 preference shares at market prices on the stock exchanges on which Butterfield shares are listed.The news comes on the heels of the bank posting a $14.7 million profit in the first three months of this year, a 75 percent increase over the same period last year.The January through March period was the bank’s fifth successive profitable quarter and the $6.3 million improvement over the prior-year period’s net income was driven by a $4.5 million increase in net interest income, as the bank achieved higher yields on its investments.