Manulife Financial Corp. reported a 2012 net income of C$1.7 billion, core earnings of C$2.2 billion and a sound regulatory capital ratio of 211 percent.
The Toronto-based global insurance giant was successful in its strategic pivot to the East while growing its wealth management and asset business globally, focusing on bolstering its presence in Canada and looking to lower its exposure to risk pertaining to its U.S. (John Hancock) operations.
In the fourth quarter of 2012, net income loss attributed to shareholders was C$1,057 million. Fully diluted earnings per share stood at C$.056 and a return on shareholders’ equity of C18.2 percent. For the full year, the company reported a net income loss attributed to shareholders of C$1,736 million, diluted EPS of C$0.88 and ROE of 7.1 percent.
Manulife’s core earnings for the fourth quarter of 2012 were somewhat disappointing, coming in at C$537 million, 28 cents per share. This was below the C$556 reported in the third quarter of 2012, and below analysts’ expectations. Manulife attributed the drop to an increase in acquisition costs as well as unanticipated expenses related to conducting business in Asia. The lower-than-expected fourth quarter core earnings were still higher than a year ago when they reported core earnings of C$373 million. For the year, core earnings were at C$2,187, up from C$2,169 in 2011.
The C$18 million increase in core earnings over last year was attributed to improved new business margins, increased fee income and a higher scheduled release of variable annuity guarantee margins among other factors.
Propelled by strong single premium sales in the group benefits realm and new product offerings with agreeable risk characteristics, Manulife realized a 20 percent increase in overall Asian insurance coupled with a 13 percent increase in U.S. sales. Record insurance sales exceeded C$3.3 billion for 2012, an increase of 33 percent over 2011.
Manulife’s wealth and asset management business realized a 31 percent increase in sales for the fourth quarter of 2012 over the previous year driven by record sales in Asia, as well as record mutual fund and Group Retirement Solutions sales in Canada which were able to offset the decline in annuity sales.