Manulife Financial Corporation reported core earnings of CA$1.8 billion (about US$1.3 billion) for the first quarter of 2025, representing a 1% decrease on a constant exchange rate basis compared to the same period last year.
Net income attributed to shareholders fell to CA$500 million, a decline of CA$400 million year-over-year.
Core earnings performance was affected by a CA$45 million post-tax provision for expected credit losses (ECL) and a CA$43 million post-tax provision related to the California wildfires. In contrast, the first quarter of 2024 included a CA$8 million post-tax net release of ECL.
Results reflect mixed performance across segments, with Asia and Global Wealth and Asset Management (Global WAM) showing growth, while US operations and corporate functions posted declines.
“Overall, I am proud of our performance this quarter against an increasingly volatile operating environment, and our results reflect the strength of the franchise,” said Roy Gori (pictured above), Manulife president and chief executive officer.
The latest quarterly results follow a record-setting year for Manulife. In 2024, the company posted core earnings of CA$7.2 billion (approximately US$5.2 billion), reflecting an 8% year-over-year increase on a constant exchange rate basis. This full-year growth was primarily driven by strong performance in the Asia and Global WAM segments.
In 2024, Asia contributed a 27% increase in core earnings for the year, reinforcing its role as a key driver of the company’s earnings momentum heading into 2025.
Asia core earnings rose 7%, supported by higher business volumes, improved new business impact, and favorable claims experience, though partially offset by strengthened ECL provisions. Global WAM posted a 24% increase in core earnings, driven by higher net fee income, favorable market conditions, performance fees, and expense discipline.
Canadian operations saw a 3% increase, with growth in Group Insurance and favorable insurance experience partly offset by lower earnings from Manulife Bank and higher ECL provisions.
Core earnings in the US declined 25%, attributed to lower investment spreads, higher ECL provisions, and the effects of the 2024 annual review of actuarial methods and assumptions. Corporate and Other core earnings were down CA$46 million, largely due to wildfire-related reinsurance losses.
The company’s reported earnings per share (EPS) were CA$0.25, down 48% from the first quarter of 2024, while core EPS rose 3% to CA$0.99. Return on equity (ROE) stood at 3.9%, while core ROE was 15.6%. The Life Insurance Capital Adequacy Test (LICAT) ratio was 137%.
The CA$400 million decrease in net income was primarily driven by a CA$700 million realized loss on the sale of debt instruments tied to the RGA U.S. Reinsurance Transaction. The loss was offset by a change in Other Comprehensive Income, resulting in no impact to book value. Additional pressure came from lower-than-expected returns on real estate, private equities, and public equities.
Insurance new business metrics reached record levels in the quarter. Annualized premium equivalent (APE) sales rose 37%, new business contractual service margin (CSM) increased 31%, and new business value (NBV) grew 36% year-over-year.
Asia led the growth with 50% higher APE sales, 38% growth in new business CSM, and 43% growth in NBV. Notable gains were recorded in Hong Kong, Japan, and other parts of Asia. The NBV margin for the region was 38.1%.
In Canada, APE sales rose 9% across all business lines, with NBV up 15% and new business CSM up 30%, driven by growth in Individual Insurance and segregated fund products. The U.S. recorded a 6% increase in APE sales and a 30% rise in NBV, with continued demand for accumulation insurance products. New business CSM declined 3% due to product mix, partly offset by higher sales volumes.
Global WAM reported net inflows of CA$500 million for the quarter, compared to CA$6.7 billion in the first quarter of 2024.
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