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Aviva profits rise 6% to £2.17bn ahead of takeover

Aviva profits rise 6% to £2.17bn ahead of takeover

Aviva has posted a 6 per cent rise in operating profits for 2014 to £2.17bn as the firm prepares to complete its takeover of Friends Life.

The firm’s shareholders will meet in London later this month where they are expected to ratify the £5.6bn deal.

Aviva’s operating profit grew by 6 per cent in 2014 which chief executive Mark Wilson has attributed to expense reductions and an improved result in UK life offsetting the negative impact of currency and lower individual annuity sales.

He said: “These results show tangible progress, with all key metrics moving in the right direction.

“We have increased our final dividend by 30 per cent to reflect the progress made during the year and our improved financial position.

“Nevertheless, it would be wrong to assume that our turnaround is nearing completion as we have further to travel than the distance we have come.”

Annuity sales at Aviva fell by 16 per cent.

Analyst view

Matt Preston, of Berenberg, said: “The headlines were very good, but there is a lot of change going on, and one would have to conclude that margins are under quite considerable pressure.

“The message from the government is that saving for retirement needs to get cheaper and more flexible which can only be bad for margins unless you have got scale.

“But scale only works when you have things all on one platform, and for the Aviva/Friends Life merger to be successful the integration needs to be flawless.”