BANKING/FINANCE

Avco Financial Services Inc. in Irvine has approved a plan to pay an unusual dividend to its parent, Avco Corp., which will pay the dividend, in turn, to its parent, Textron Inc. in Providence, R.I.

Avco Financial’s dividend, to be paid sometime in mid-1988, will consist of all the capital stock of its own subsidiary, Paul Revere Life Insurance Co.

The dividend, part of a reorganization within Textron, will wipe out nearly half of Avco Financial’s net income and net worth.

Last year, Paul Revere Life contributed about $50 million to Avco Financial’s $122 million in net income and, in the first nine months of 1987, provided $46 million of its parent’s $100 million in income. By getting rid of Paul Revere Life, Avco Financial’s net worth would drop $435 million to $537 million from $972 million, based on Sept. 30 figures.

Paul Revere Life offers life, annuity, and accident and health insurance. Its operations are not related to the finance and loan insurance activities of Avco Financial, which has 1,200 offices in the United States, Canada, the United Kingdom and Australia.

Textron operates businesses in three industries--aerospace technology, commercial products and financial services.

--Compiled by James S. Granelli, Times Staff Writer