Manulife Tops Estimates Amid Wealth-Management DemandSean B. Pasternak
Manulife Financial Corp., Canada’s largest insurer, posted fourth-quarter profit of C$1.06 billion ($1.06 billion) as wealth-management sales in Asia reached a record.
Net income was 56 cents a share, compared with a year-earlier net loss of C$69 million, or 5 cents, Toronto-based Manulife said today in a statement. Manulife was expected to earn 32 cents a share, according to the average estimate of 12 analysts surveyed by Bloomberg.
Profit more than doubled in Asia to C$682 million as premiums and deposits increased. Chief Executive Officer Donald Guloien, 55, has said Asian markets including China, Malaysia and Singapore will become the fastest-growing segment of the company’s earnings, due to demand for wealth-management and pension products. He said the company will continue to add agents in Asia cautiously and sell through partners.
“It’s very sexy when economies are growing as fast as they are in Asia to add agents equal to or perhaps faster than the growth of the economy,” Guloien said today in a telephone interview. “If you end up with the wrong people selling the wrong kind of products, it’s not a good outcome.”
Net income was boosted by C$368 million in investment gains. So-called core earnings were C$537 million, or 28 cents a share. Manulife reiterated today it expects to have earnings of C$4 billion on that basis by 2016. Core earnings exclude the direct impact of changes in equity markets and interest rates, among other items, the insurer said.
“We do not expect a strong reaction to Manulife’s results as some of the positives” are offset by lower than expected core income, Andre-Philippe Hardy, an analyst with RBC Capital Markets, wrote today in a note to clients.
Manulife rose 1 percent to C$14.55 at 4 p.m. in Toronto. The shares have climbed 7.7 percent this year, compared with a 7.9 percent increase in the S&P/TSX Life & Health Insurance Index.
Profit from Canada climbed 2 percent to C$251 million with U.S. profit increasing 43 percent to C$724 million, Manulife said.
For the full year, Manulife’s profit was C$1.74 billion, compared with C$129 million in 2011.
Manulife was the first of Canada’s four main life insurers to report fourth-quarter results. Great-West Lifeco Inc. said today that fourth-quarter profit fell to C$353 million, or 37 cents a share, from C$624 million, or 66 cents a share, a year-earlier on costs tied to litigation.
Sun Life Financial Inc. and Industrial Alliance Insurance and Financial Services Inc. are scheduled to release results next week.