Manulife core profit drops on asset management, Asia sales challenges

MANULIFE Financial slightly beat analysts' estimates for second-quarter core profit but saw earnings drop from a year earlier, due to market volatility that weighed on its asset management unit and Covid-19 restrictions in Asia.

Canada's largest life insurer reported core earnings of C$1.56 billion (S$1.7 billion), or 78 Canadian cents a share, in the 3 months ended Jun 30, compared with C$1.68 billion, or 83 Canadian cents a share, a year earlier. Analysts had expected 76 Canadian cents a share.

Analysts had forecast a muted second quarter for Canadian life insurers, on expectations that their substantial asset management units would take a hit from equity market declines. They also noted that lingering Covid-19 restrictions in Asia could prove a challenge, a headwind the company had flagged in its previous quarterly results announcement.

Manulife reported core earnings declines of 14 per cent in its global wealth and asset management unit as fee income and assets under management declined; 4.6 per cent in its US business on lower demand for some insurance products due to higher inflation; and 2.5 per cent in Asia, on lower sales, particularly in Hong Kong and Japan.

An 8.5 per cent increase in its Canadian earnings, lifted by growth in new business value, helped offset the declines somewhat.

Net income attributable to shareholders was C$1.09 billion or 53 Canadian cents per share, compared with C$2.65 billion, or C$1.33 a share, a year earlier. REUTERS