Manulife profit slips, bank loan helps capital

* EPS of C$0.33, down from C$0.70 in Q3 2007

* Profit hurt by stock mkt declines, credit losses

* Obtains C$3 bln term loan to bolster capital

* Stock up 1 pct at C$26.07

(Adds details, analyst comments)

By Lynne Olver

TORONTO (Reuters) - Profit at life insurer Manulife Financial (MFC.TO) fell by half in the third quarter as sharply lower stock markets and impaired bond holdings prompted large charges, and a decline in managed assets hurt fee income.

But Manulife's capital position has been a key focus in recent weeks, and the company said on Thursday that it will borrow C$3 billion from the six largest Canadian banks to provide additional regulatory capital for its operating subsidiaries, as needed.

The loan, which will be fully drawn by Nov. 20, will enhance the company's overall capital position and may pave the way for acquisitions, Manulife Chief Executive Dominic D'Alessandro said in a statement.

"Even with the decline in global equity markets since September 30, our capital position is a very comfortable one," D'Alessandro said, adding that the company will evaluate "any strategic opportunities" that emerge from current market conditions.

Manulife's earnings fell to C$510 million ($433 million), or 33 Canadian cents a share, in the three months ended Sept. 30, from C$1.07 billion, or 70 Canadian cents, in the same 2007 period.

Analysts had expected earnings of 40 Canadian cents a share before items, according to Reuters Estimates -- but the range of forecasts was wide, at 20 to 70 Canadian cents.

"The bank loan significantly reinforces their excess capital position and puts any capital issues to bed," said Tom MacKinnon, an analyst at Scotia Capital.

The results were better than MacKinnon had expected, and he said the insurer's excess capital position could be between C$3 billion and C$4 billion by year-end.

Manulife sells insurance and wealth-management products in Canada, the United States and Asia.

As stock markets slid in September and October, Manulife's stock fell on investor concerns the company might be required to raise new capital to offset future obligations, as required by regulators. Its stock hit a year low of C$21.17 on Oct. 27.