Let’s take a breather from Aviva’s preference shares and talk about the British insurer’s ordinary shares, as much as £600 million (about CA$1.05 billion) worth of which will be snapped up in a buyback programme.
Approved by the Prudential Regulation Authority (PRA), the programme begins today and will conclude no later than December 31. Aviva’s board believes a buyback is a compelling use of the firm’s excess capital, £2 billion (about CA$3.5 billion) of which the insurance giant has said it is committed to deploy this year.
The dividend yield on Aviva shares currently stands at 5.2%.
“Aviva has significant surplus cash and capital and we are deploying £2 billion (about CA$3.5 billion) productively in 2018,” said group chief executive Mark Wilson. “The £600 million (about CA$1.05 billion) buyback, together with our plan to repay £900 million (about CA$1.6 billion) of expensive debt maturing this year and invest in bolt-on acquisitions, will grow Aviva’s earnings, strengthen cashflow, and improve debt ratios.”
Citigroup Global Markets Ltd has been tapped to conduct the share buyback programme on behalf of Aviva.
