Aviva scraps plans to cancel preference shares

Aviva has decided not to cancel £450m worth of preference shares following "strong feedback and criticism" from a large number of investors.

"As a result Aviva has listened. Aviva announces that it has decided to take no action to cancel its preference shares," it said.

The insurer had announced earlier this month that it was planning to cancel the preference shares, having received "clear legal advice", as part of a plan to return £500m to ordinary shareholders.

Under current regulation, the preference shares will no longer count as regulatory capital in 2026. The company said it will work towards obtaining regulatory approval for the preference shares or a suitable substitute, to quality as capital from 2026 onwards.

Chief executive Mark Wilson said: "I am very aware that Aviva is in a position of trust with our customers and investors. To maintain that trust it is critical that we listen to and act on feedback. The reputation of Aviva, and the trust people have in us, is paramount. Our announcement today means that preference shareholders can rest secure in their holdings.

"The board and I have a duty to consider not just the financial implications of our actions. We must consider the impact to Aviva's wider reputation. I hope our decision today goes some way to restoring that trust."

At 0900 GMT, the shares were down 1.5% to 496.70