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Under current regulation, the preference shares will no longer count as regulatory capital in 2026.
Aviva said it will work towards obtaining regulatory approval for the preference shares, or a suitable substitute, to qualify as capital from 2026 onwards.
"If as we approach 2026 Aviva needs to reconsider this position, it will do so after taking into account the fair market value of the preference shares at that time," said Aviva.
Aviva originally announced its plan to cancel the preference shares, which carry a fixed dividend, on March 8 as part of a planned
"The review of the preference shares was initiated as a result of Aviva's duty to examine what is right for the business, balancing the interests of ordinary shareholders and preference shareholders. Aviva needed to address the issue of the preference shares given regulatory capital considerations and their cost," the company said.
Aviva said it is in a strong financial position and still plans to deploy
"I am very aware that Aviva is in a position of trust with our customers and investors. To maintain that trust it is critical that we listen to and act on feedback. The reputation of Aviva, and the trust people have in us, is paramount. Our announcement today means that preference shareholders can rest secure in their holdings," said Chief Executive Mark Wilson.
"The board and I have a duty to consider not just the financial implications of our actions. We must consider the impact to Aviva's wider reputation. I hope our decision today goes some way to restoring that trust," Wilson added.
The Financial Times earlier on Friday said Aviva had received backlash on the planned cancellation from City and retail investors as well as the intervention of