Manulife's (MFC) Q3 Earnings Flat Y/Y, Asia Business Upbeat
Zacks Investment Research | Nov 06, 2019 11:06PM ET
Manulife Financial Corporation (NYSE:MFC) reported third-quarter 2019 core earnings of $1.1 billion (C$1.5 billion), flat with the prior-year quarter. This result can be attributed to double-digit core earnings growth in Asia. However, the same was partially offset by an impact on earnings due to actions undertaken over the past year to boost the capital efficiency of legacy business along with lower new business volumes in Japan.
New business value (NBV) in the reported quarter was $398.4 million (C$526 million), up 15.2% year over year on the back of growth in Asia, U.S. and Canada insurance segments. However, the same was offset to some extent due to lower sales in Japan.
Annualized premium equivalent (APE) sales of $1.1 billion (C$1.4 billion) were almost flat year over year, primarily on account of higher sales in Hong Kong, Canada.
Expense efficiency ratio expanded 190 basis points (bps) to 51.4%.
As of Sep 30, 2019, Manulife Financial’s financial leverage ratio contracted 310 bps year over year to 26.1%.
Wealth and asset management assets under management and administration were $497.8 billion (C$ 659.2 billion) in the third quarter of 2019.
Core return on equity, measuring the company’s profitability, contracted 180 bps year over year to 13%.
The Office of the Superintendent of Financial Institutions' new Life Insurance Capital Adequacy Test (LICAT) regulatory capital regime came into effect in Canada on Jan 1, 2018, replacing the Minimum Continuing Capital and Surplus framework. LICAT ratio was 146% as of Sep 30, 2019.
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