Swiss National Bank has announced a loan it granted to bail out troubled bank UBS in 2008 has been repaid.

The development means UBS can now buy back the once-toxic assets taken out of the bank at the height of the financial crisis.

The assets, worth $38.7 billion at the time of the bailout, have since become profitable.

UBS, Switzerland’s biggest bank, has already said it plans to buy them back.

It described the buy-back as an “important step which will close this chapter in the firm’s history with a positive outcome”.

Swiss National Bank has announced a loan it granted to bail out troubled bank UBS in 2008 has been repaid

It would mark a significant milestone in the recovery of the bank, and Switzerland’s wider banking sector, following the banking crisis during which UBS came close to collapse.

In later 2008, the Swiss National Bank (SNB) was forced to set up a stabilization fund into which illiquid assets could be transferred.

The SNB said the price UBS will pay for the assets will be determined by a valuation from independent agents.

The fund’s equity amounted to $5.5 billion at the end of 2012.

Banks in Europe and the US are still recovering from the financial crisis, with bailout money still to be repaid and many governments still heavily invested in their banking sectors.

The European Central Bank said on Friday that banks would return a further 654 million euros in crisis loans issued in 2011 and 2012.

More than 1trillion euros was lent out by the bank, and more than a quarter has so far been repaid.