Aviva may offer shareholders a bumper special dividend as part of plans to hand back £4bn after the sale of international businesses
Aviva’s army of half a million small investors could be in line for a bonus dividend payment next year as it looks to return billions to shareholders.
The FTSE 100 insurance giant is in the process of distributing £4billion to investors following the sale of its international businesses that were considered excess fat.
So far this is being done in the form of a £750million share buyback. But the Mail can reveal Aviva is planning a special dividend, which will go straight into small shareholders’ pockets.
Feeling flush: Aviva has accumulated £7.5bn in excess cash after selling off eight businesses under chief executive Amanda Blanc (pictured)
It is not known how much the special dividend is worth but once the buyback is complete, Aviva still has £3.25billion in the pot to redistribute.
Neil Wilson, an analyst at Markets.com, said: ‘Share buybacks help boost the share price but dividends go straight into the small investors’ pockets. Every ordinary investor wants a special dividend.’
Aviva has one of the largest small shareholder bases on the FTSE 100 after it merged with Norwich Union in 2000.
At the time Norwich Union had an astonishing 2.1m retail investors having previously been a mutual with members who were handed shares when it listed on the stock market three years before the tie-up with Aviva.
More than a quarter of them – over 500,000 – still own shares in Aviva.
A spokesman said: ‘We are delivering our commitment to return at least £4billion of capital to shareholders, with £450million of the £750million share buyback already successfully completed.
A number of different options are being considered, including a special dividend. Further details will be provided at the full year results in March 2022.’
Aviva has accumulated £7.5billion in excess cash after selling eight businesses under chief executive Amanda Blanc.
Blanc joined in July last year and has spent the time streamlining the insurer and focusing the business on the UK, Ireland and Canada.
But she has come under pressure of late after hedge fund Cevian snapped up a 5 per cent stake in June. Cevian, whose boss Christer Gardell has been dubbed ‘the Butcher’, has called for the return of £5billion of excess cash to shareholders by next year.
Under Blanc, Aviva has been on a roll and in the first nine months this year, it attracted record inflows into its savings and retirement division of £7.3billion, a £1.3billion increase on the previous year.
The spokesman for the insurance group said: ‘We have seen an uptick in the savings and retirement division as customers saved more cash during the pandemic. People are living longer, they need to save more for retirement.’