Fairfax Financial Holdings says it intends to buy back up to 1.6 million subordinate voting shares through on the Toronto and New York stock exchanges.

The shares, which will be cancelled, make up about 10 per cent of the company's subordinate voting shares.

The company has nearly 19.7 million subordinate voting shares outstanding.

Fairfax has already bought back and cancelled 144,200 of its subordinate voting shares at an average price per share of $292.48 under its 2008-2009 buyback plan.

By buying back its shares, Fairfax reduces its equity base, spreading profits over fewer shares. That increases its return on equity and earnings per share, two key ratios used to determine a company's financial health and investment rating.