(Adds CFO, analyst comments)
By Cameron French
TORONTO May 1 Manulife Financial Corp said on
Thursday its first-quarter profit surged more than 50 percent as
a stronger investment performance and higher wealth management
fees more than offset weaker insurance sales.
Manulife, Canada's biggest life insurer, said net income
attributed to shareholders was C$818 million ($745.36 million),
or 42 Canadian cents per share, compared with C$540 million, or
28 Canadian cents a share, a year earlier.
Core profit, which excludes one-time items and
market-related gains and losses, rose to 37 Canadian cents a
share from 32 Canadian cents. Analysts' average estimate was 39
Canadian cents a share, according to Thomson Reuters I/B/E/S.
"It was pretty much an in-line quarter," said Peter
Routledge, an analyst at National Bank Financial.
"We like their momentum in wealth management, particularly
in North America (and) they have just very, very high capital.
And we think that will persist," he said.
Insurance sales in the quarter fell 15 percent to C$537
million. Wealth sales climbed 5 percent to C$13.8 billion,
Manulife said, with gains in Canada and the United States well
exceeding declines in Asia.
Besides its Canadian operations, Manulife owns U.S. insurer
John Hancock and is growing in Asia, where it has a presence in
about a dozen countries.
The company has spent the last few years reducing its
exposure in financial markets after taking billions in losses
during the financial crisis.
It has also been slowly shifting its business away from life
insurance and toward wealth management, which has lower capital
requirements, predictable fee-based income and the promise of
more clients as baby boomers approach retirement and
increasingly need money management.
While Canada and the United States are the main drivers of
the company's profit, Manulife has targeted Asia as a key growth
area, and continues to eye acquisition opportunities on the
continent, including potential bancassurance deals, said Steve
Roder, the company's chief financial officer.
"We continue to be particularly interested in opportunities
where we can do deals quietly without some big grandiose auction
process. And if you look at our history, the best deals we've
done have been where we've done some quiet bilateral deal," he
said in an interview.
Investment-related profit, excluding amounts included in
core earnings, was C$225 million, up from C$97 million a year
Manulife stock, which fell more than 75 percent between 2007
and 2012, rebounded 55 percent last year. The shares, which have
fallen slightly so far this year, were up 0.8 percent at C$20.74
($1 = 1.0975 Canadian dollars)
(Editing by Lisa Von Ahn and Bernadette Baum)