Aviva cuts dividend despite 5% rise in profits

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Insurer Aviva has unveiled a 5 per cent increase in first-half profits, but shareholders will see another 44 per cent cut to their dividend payments.

The group, which slashed last year’s final dividend by the same amount in a bid to build up capital reserves, said it was making “satisfactory progress” in its turnaround, with operating profits rising 5 per cent to £1 billion for the first six months of the year.

The life and pensions firm said the value of new business grew 17 per cent to £401 million, driven by its operations in the UK and France, along with strong sales in growth markets across Asia, Poland and Turkey.

Chief executive Mark Wilson also hinted at a possible sale of its Indian joint venture, which is valued at more than £325m.

He added: “In the first half we have taken a number of steps to deliver our investment thesis of cash flow and growth. These results show satisfactory progress in Aviva’s turnaround.

“Although these results continue the positive trends of the first quarter, tackling our legacy issues will take time.”

Shareholders will receive an interim dividend of 5.6p a share, down from 10p last time.