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Aviva to divest 'minimal' Russia exposure as soon as possible, says CEO

Aviva PLC has "very, very minimal exposure" to Russia through its Aviva Investors asset management arm, which it will look to divest "as soon as we practically can," CEO Amanda Blanc said.

The exposure is less than 0.1% of some Aviva Investors funds and the insurer has no operations in Russia or Ukraine, Blanc told journalists during Aviva's 2021 earnings call.

The comments follow other insurance industry players that indicated having small exposures to the Russia-Ukraine conflict.

Aviva has "no direct exposure" to Russia, Aviva CFO Jason Windsor told journalists, and it does not have any specific Russian funds. Rather, its positions are "very small holdings of much bigger global equity funds."

Windsor added that given the restrictions the company may face in divesting the holdings, he could not say when the exit would happen.

Aviva reported an International Financial Reporting Standards profit of £2.04 billion for 2021, down 30% from the £2.91 billion it reported in 2020. Operating profit fell 28% to £2.27 billion from £3.16 billion, which the company attributed to lower profit from discontinued operations.

The British group has been exiting countries as it focused on its core markets of the U.K., Ireland and Canada, and has raised £7.5 billion of proceeds through the sale of eight operations during 2021.

Aviva said it would return £4.75 billion to investors, comprising a £3.75 billion B Share scheme, expected to complete in May 2022, and a previously announced £1 billion share buyback.

The company also unveiled a series of new targets, which include paying a dividend of £870 million in 2022 and £915 million in 2023. The illustrative dividend per share would be 31.5 pence and 33 pence for 2022 and 2023, respectively, compared with 2021's actual dividend per share of 22.05 pence. It also announced a new cost-saving target of £750 million gross of inflation by 2024.

Aviva has faced a call from activist investor Cevian to return £5 billion to investors and cut costs by at least £500 million by 2023. Asked if Cevian would be satisfied, Blanc said: "I think the announcements we are making today should be pleasing for all of our investors," adding that the group has "come a long way in the last 20 months."