Manulife sees slump in Canada while Asia remains resilient
Core earnings at home fell 12 per cent, undone by high payout costs
Manulife Financial Corp., Canada’s largest life insurer, faced headwinds in its home market in the third quarter that muted the benefit of gains from its wealth and asset management business along with resilience in Asia and the U.S.
Core earnings from Canada fell 12 per cent to $279 million last quarter, hurt by higher than expected payout costs, the Toronto-based company said Wednesday. That contrasts with Manulife’s performance in Asia, where core earnings rose 7.5 per cent to $559 million, and the U.S., where they increased 5.7 per cent to $498 million.
The global stock-market rebound drove a strong quarter in Manulife’s wealth and asset management business, with assets under management and administration rising 8.5 per cent to $715.4 billion. Manulife’s total core earnings fell 4.8 per cent to $1.45 billion, or 73 cents a share, topping analysts’ 70-cent average estimate. Net income more than doubled to $2.07 billion.
“Were it not for weakness in its Canadian platform — related to policyholder experience — it would have been a very significant beat, with Asia and wealth management generating solid contributions and impressive year-over-year growth in the midst of the pandemic,” Barclays Plc analyst John Aiken said in a note to clients.
Manulife shares slid 3.36 per cent to close at $20.72 on Thursday in Toronto. The stock has declined 21 per cent this year, compared with a 1.9 per cent drop for the S&P/TSX Composite Index.
Chief executive officer Roy Gori said the wide scope of the company’s Asia business — which has a presence in markets including Hong Kong, Japan, China, Vietnam and Singapore — helped it withstand the disruptions of the pandemic. Manulife recently expanded into Myanmar and formed a new partnership in Vietnam.
“It’s the breadth and depth of our business in Asia and the diversity of the different geographies that allowed us, when we had lockdowns in certain markets, to offset that with strength in others that were coming out of lockdown,” Gori said after the insurer reported third-quarter results.