S&P warns halving dividend may not save Aviva’s solvency

Aviva shares fell 12p to 291p after Standard & Poor’s (S&P) switched it from “hold” to “sell” saying that halving its dividend would not save its solvency position, The FT reports.

S&P analyst Tony Silverman said that Aviva needed to sell assets, such as its Canadian and French non-life businesses.

This is because of:

  • falling values of commercial property and corporate bonds
  • property loan defaults
  • tighter implementation of solvency rules by the Financial Services Authority

Reuters added that ING analyst Kevin Ryan said: The market "is waking up to the arithmetical fact that earnings this year aren't going to be as strong as last year”.

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