Aviva has agreed to sell the entire stake in life insurance and pensions joint ventures Cajamurcia Vida and Caja Granada Vida to Bankia for €202m.

The consideration represents 2.1 times Aviva’s share of the IFRS net asset value and 22.5 times Aviva’s share of earnings after tax of these businesses. The transaction will result in an increase of approximately £150m in Aviva’s Solvency II capital surplus.

Following the restructuring of the Spanish banking system, which started in 2010, and the subsequent consolidation among Aviva’s banking partners, Aviva has taken steps to protect the value of its distribution agreements in Spain.

Aviva sold its shareholdings in its joint ventures with Bankia in 2012 and Novacaixagalicia Grupo in 2014, and in 2017 it sold the majority of its remaining business to Santalucía. Together with the sale announced today, the combined proceeds amount to €1.6bn (£1.3bn).

The transaction is subject to regulatory and anti-trust approvals and is expected to complete in the second quarter of 2018.

Following completion of the transaction, Aviva will retain a stake in a small life insurance operation, Pelayo Vida, and a residual support centre in Spain.

Aviva, Group CEO Mark Wilson said: "This sale is a strong return for our shareholders. It means that over the past five years we have generated proceeds of £1.3bn from selling almost all of our Spanish operations.

"The transaction further simplifies Aviva, strengthens our already healthy capital position and is another example of our focus on attractive, growing markets where we have high quality franchises."