Equitable will put more in shares

THE chairman of Equitable Life, Vanni Treves, sought to draw a line under the mutual's recent past today by insisting it was solvent and signalling more of its with-profits fund could soon be invested in the City.

Treves wants to invest a higher percentage of the group's £10.7bn fund in shares to boost returns. Equitable slashed its equity exposure to less than 5% two years ago to avoid going bust.

'The dark clouds overhanging the society are gradually drifting away,' Treves said as annual figures showed Equitable's fund for future appropriations - a measure of its excess capital - was £542m.

But the group is likely to disappoint its 750,000 policyholders after indicating once more that it is far from keen to sue the Government for regulatory failures highlighted in the recent Penrose Report into its near collapse.

Treves said that a case would be considered, but added: 'The legal hurdles are very high, the costs would be enormous and it would take years to come to trial.'

Equitable said it saw little in Penrose's report that would give rise to new 'material' mis-selling claims against the society from its existing savers, and that the Parliamentary Ombudsman remained the best route for redress.

Policyholders will see the value of their with-profits pensions rise by 2% for 2003.

Equitable Life is holding back 1% of its fund's investment return to boost its capital reserves.