Aviva dividend cut likely to displease investors
Aviva made a group loss after tax of £3.05bn in 2012, compared with a profit of £60m in 2011.
The loss, which had been predicted, was driven by a £3.3bn write-down following the sale of Aviva’s US life and annuities business.
The company also cut its full-year dividend to 19 pence a share (2011: 26 pence a share) which is likely to prove unpopular with investors.
Aviva group chief executive Mark Wilson said 2012 was “a year of transition at Aviva. There has been solid progress against the turnaround plan set out last year. Our capital strength has improved materially and we have completed the vast proportion of the disposal programme.
“We have made progress reducing costs and we also have a strong new management team in place.
“The £3 billion loss after tax is driven principally by write-downs we have previously announced due to the agreed sale of our US business. Operating profit levels were healthy across our major businesses, especially in the UK, France and Canada.
“The rebasing of the dividend and the elimination of the dilutive scrip [the issue of shares in lieu of a cash dividend] is about giving certainty to shareholders, reducing debt, and putting Aviva in a sound position for the future. This is the right course of action.”
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