Manulife posts net income of $1.5 billion for second quarter

By The IJ Staff | August 08 2019 01:30PM

Roy Gori

Manulife has reported net income of $1.5 billion for the second quarter of 2019. This is an increase of $0.2 billion over the same quarter last year.

Manulife says this increase was primarily driven by the non-recurrence of a $200 million restructuring charge taken in 2Q18.

Core earnings were also $1.5 billion for the second quarter, in line with Q2 2018. Return on common shareholders’ equity (ROE) for Q2 2019 was 12.9 per cent compared to 12.3 per cent for Q2 2018. The company reported a LICAT ratio of 144 per cent.

In an Aug. 7 statement, Roy Gori, Manulife President & Chief Executive Officer, highlighted the company’s double digit core earnings growth in Asia. He also underlined that Manulife has continued to focus on executing its strategy, with capital released from portfolio optimization increasing to $3.7 billion.

"We have also taken steps to further strengthen Manulife's long-term growth opportunity in Asia, including entering into an asset management joint venture agreement in India," Gori added.

New business value

For the second quarter of 2019, Manulife reported new business value (NBV) of $479 million – an increase of 14 per cent compared with Q2 2018. For Canada in particular, NBV of $65 million was in line with the prior year period. Manulife says higher insurance sales in Canada were offset by business mix changes in group insurance and the withdrawal of certain capital-intensive annuity products.

Manulife reported annualized premium equivalent (APE) sales of $1.4 billion in Q2 2019, up 7 per cent compared to the same quarter one year earlier. For Canada, APE sales increased 46 per cent due to a large-case group insurance sale and growth across the company’s individual insurance business including living benefits, term and permanent life insurance product lines, says Manulife.

Manulife reported neutral Global Wealth and Asset Management net flows in the second quarter of 2019 compared with positive net flows of $0.1 billion in 2Q18. Net flows in Canada were $0.1 billion in 2Q19, a decrease of $0.6 billion from 2Q18, driven by the redemption of a large-case retirement plan.

Appointments of Dickson and Bainbridge

The company also announced the appointments of Julie Dickson and Guy Bainbridge to Manulife's Board of Directors.

Dickson is a former Superintendent of the Office of the Superintendent of Financial Institutions (OSFI), Canada's main financial services regulator. Bainbridge is a former partner with KPMG LLP.

"Julie and Guy bring extensive experience and expertise that will be tremendously valuable in supporting the effective oversight of Manulife's strategy and operations," said John Cassaday, Chairman of the Board, Manulife. "We are excited to welcome them to Manulife and are confident their future contributions will have a positive effect on Manulife and on our Board."

Dickson joins the Manulife Board's Management Resources and Compensation Committee and the Risk Committee and Bainbridge joins the Audit Committee and the Corporate Governance and Nominating Committee.

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