Blue-chips urged to return cash to investors A large proportion of the excess cash has been accumulated by oil and gas companies, the options firm said. BP has reserves of £19.5bn and Royal Dutch Shell has amassed £12.3bn. Insurers Legal & General and Standard Life are also among those companies with the biggest cash piles, with the former sitting on £16.7bn and reserves at the latter totalling £9.9bn. Temporary power supplier Aggreko, with £23m in cash, and property group Land Securities, with £30m, were among those companies on the main board with the smallest reserves, according to the Banc De Binary. However, while reserves have grown, a number of companies are already buying back shares from investors, a method of boosting the value of the remaining stock. BP, for example, revealed last month that it was undertaking an $8bn (£5.2bn) share repurchase programme after selling its stake in Russian joint venture TNK-BP. Shell also has a buyback scheme in place. But Mr Laurent said investors prefer cash to be returned through larger dividend payments. "Despite all the financial theory that says there is no difference between share buybacks and dividends most private investors prefer dividends," he said. There is something a bit concrete about getting a dividend payment into your bank account. Cash reserves have risen after balance sheets were hit by the credit crisis, said Ian Williams, a strategist at City stockbroker Peel Hunt. Businesses had not yet reached a stage where they were willing to invest in growth. Instead, some companies were using defensive cash buffers "as an insurance policy, if revenue doesn't pick up as they'd like to think it would do," Mr Williams said.