AIA Group Ltd on Friday launched a $10 billion share buyback plan. It declared a higher final dividend for strong growth in 2021 but also warned of short-term pain due to recent coronavirus outbreaks in Hong Kong.
The value of the new business, or VONB as it is commonly known, was up to $3.37 Billion for the year ending Dec. 31, compared with $2.77 Billion a year ago.
About half of global new business growth was attributed to China and Hong Kong. The top contributor to VONB was China’s Mainland China, which saw a 14% increase, while Hong Kong’s business grew 37%, indicating a strong recovery from the pandemic lows.
The buyback plan was announced by the Hong Kong-based insurer due to improved operating conditions.
Lee Yuan Siong, Group Chief Executive Officer, stated that the share buyback is capital that has been accumulated over time and allows for capital market stress conditions. It also retains capital for strategic or financial flexibility.
The company however warned that Omicron’s recent spread, particularly in Hong Kong, could have a negative impact on its business sales, particularly the first quarter.
Hong Kong has seen some of the most severe curbs put in place in recent weeks to counter a record number of coronavirus deaths and cases. China recently saw an increase in coronavirus infection locally.
AIA also declared a final dividend at 108 Hong Kong cents per share. This is 8% more than last year and brings the total 2021 dividend up to 146 HKcs.