Geneva  – The Swiss Federal Department of Finance said Tuesday it was in talks with various parties about its options for the securities it bought last year from the banking giant UBS AG as part of a bail-out plan for the troubled institution.

The six-month lockup on the mandatory convertible notes the federal government bought for 6 billion francs (5.5 billion dollars) expired on Tuesday.

If it were to convert all the securities, the state could own just over 9 per cent of the bank, the second largest by market capitalization, or overall stock value, in Switzerland.

The department said that it remained committed to only having “temporary” involvement in the bank.

“So far, no decision on a conversion or a sale has been taken,” the Finance Ministry in the capital Bern said in a statement.

In the event of conversion, the department said the minimum price of a share will have to be 18.21 francs. UBS’s stock closed at just below 15 francs on the Zurich Exchange on Monday.

There have also been reports of UBS being interested in taking steps, such as issuing debts or stock, to pay back the government, though that would have to be approved by Bern.

Recently, the state’s involvement in the bank sparked debate over compensation, or bonuses, for employees, with the government trying to keep them down while UBS says it needs to pay competitive market rates or it will lose key staff.

UBS had to take more writedowns on assets than any other bank in Europe when the financial crisis hit and last year lost more than 16 billion dollars, the largest ever for a Swiss company.

In addition to the cash injections, the central bank and the government also set up a stabilization fund worth up to 60 billion dollars to take on UBS’s toxic and illiquid assets, though it has used only about two-thirds of that.

One concern for the state is that it wants to ensure it recoups its investment in UBS while also being certain the bank would be strong enough to carry on even without the crutch.

UBS is at the centre of a tax fraud investigation in the US, while Bern is in the process of negotiating with its partners new bilateral double taxation agreements as part of its commitment to relax banking secrecy. (dpa)