CANADA-BASED insurer Manulife Financial Corp. (MFC) said its net income in 2016 improved by 34 percent to $2.9 billion on the back of strong earnings and a turnaround in investment-related experience gains from losses.
In a disclosure to the Philippine Stock Exchange (PSE) on Friday, MFC said its core earnings increased by 17 percent to $4 billion last year primarily driven by its “strong new businesses, in-force growth in Asia,” and the boost from the strengthening of the US dollar and the Japanese yen compared to the Canadian dollar.MFC is a Toronto-based firm mainly involved in life insurance, pension and education businesses, and is listed on the Toronto (TSX), Hong Kong (HKEx), New York (NYSE) and the Philippine (PSE) stock exchanges.
Aside from the Philippines and Canada, MFC has presence in the United States, Singapore, Indonesia, Vietnam, Hong Kong and China.
In the fourth quarter of 2016 alone, it said net income was at $63 million while core earnings stood at $1.29 billion. Both items were negatively affected by the equity market and interest rate-related charges amounting to $1.2 billion.
“Manulife achieved particularly strong operating results, ending the year with $4 billion in core earnings, an increase of 17 percent from the prior year; and achieving the target we set back in 2012. While the overall impact of higher rates is highly positive over the long term for our company, net income was negatively impacted by market movements in the fourth quarter. For the full year, net income was $2.9 billion, an increase of 34 percent over the prior year,” Donald Guloien, MFC president and chief executive officer, said.
“On the basis of the strong operating results, and our outlook for growth going forward, the board today approved an 11 percent increase to our dividend, marking our third consecutive year of increases,” he added.
MFC Chief Financial Officer Steve Roder said: “In Asia, we achieved a 29 percent increase in APE [annualized premium equivalent]sales compared to 2015, and a 35 percent increase in new business value, which speaks to the quality of sales we generated. We also delivered $15 billion in net flows in our global Wealth and Asset Management businesses, our seventh consecutive positive year.”
“The mark-to-market impact of interest rates and equity markets subjects our net income to negative and positive variability, which can be material. We do not consider these impacts to be reflective of the underlying earnings capacity of our business and it was for reasons like this that we introduced the core earnings measure a few years ago,” Roder said.