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Resolution cancels £250m payment to shareholders

Resolution Limited has cancelled a £250m capital return to shareholders citing concerns over the future investment, regulatory and economic uncertainty surrounding Friends Life.

The firm says the decision is based on the estimated capital position of the group at the end of June 2012 as well as the future capital requirements of Friends Life against the difficult backdrop.

The firm said the group’s capital position remains robust with Friends Life having a capital adequacy surplus of £1.9bn as at June 30, 2012. Resolution says its company dividend policy remains unchanged.

Resolution chairman Mike Biggs says: “I understand that shareholders will be very disappointed that the board has concluded not to return a second £250m of capital but it would be inappropriate to do so against the backdrop of heightened investment, economic and regulatory uncertainty.”

Resolution made full year profits of £681m in 2011 and raised its dividend 10 per cent. As part of its 2012 results, the group set out proposals to split Friends Life into two separately listed businesses which could be sold off on their own.

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