Resolution is to return £500m of excess funds to shareholders through a share buy-back scheme that starts this week. The balance, which is subject to achieving planned capital synergies of £235m this year, will be delivered in the first half of next year, probably as a further buy-back or a special dividend.
The announcement ends a period of uncertainty following the life assurer's decision earlier this year to rule out making any further major acquisitions. Further distributions are likely, with analysts at Barclays Capital assuming a further £500m share buy-back next year. Furthermore, Resolution maintains that this will not affect its progressive dividend policy. Following last year's 18p per share payout, the group has already pledged to increase the dividend total this year to 18.85p.
