Aviva is planning to buy back £600m of its own shares, in an effort to deploy £2bn of excess capital this year.
The provider says it has “significant excess capital” and this year will use £900m for debt reduction, £500m for acquisitions and £600m for the share buy-back.
The buy-back will run from today to 31 December.
Aviva group chief executive Mark Wilson says: “The £600m buy-back, together with our plan to repay £900m of expensive debt maturing this year and invest in bolt-on acquisitions, will grow Aviva’s earnings, strengthen cashflow and improve debt ratios.”
Aviva yesterday said it will offer shareholders who sold preference shares over 25 days in March a goodwill payment expected to cost the company up to £14m.
In its full-year results in March, Aviva said it could cancel existing preference shares as one option for returning capital to shareholders. However, the provider was met with criticism over the potential move by shareholders, which led to it backtracking later that month.
Aviva said fewer than 2,000 individual investors sold their preference shares between 8 and 22 March.