MANULIFE FINANCIAL CORPORATION TSX/NYSE/PSE: MFC SEHK: 945 | C$ unless otherwise stated |
TORONTO, ON - May 8, 2024 - Manulife Financial Corporation ("Manulife" or the "Company") reported its first quarter results for the period ended March 31, 2024, delivering strong core ROE and topline growth, and closing the largest long- term care ("LTC") reinsurance transaction in the industry.
Key highlights for the first quarter of 2024 ("1Q24") include:
- Core earnings1 of $1.8 billion, up 16% on a constant exchange rate basis2 from the first quarter of 2023 ("1Q23")
- Net income attributed to shareholders of $0.9 billion, down $0.5 billion from 1Q23. Excluding the impact of the reinsurance transaction with Global Atlantic (the "GA Reinsurance Transaction"), which had a largely neutral impact on book value, 1Q24 net income attributed to shareholders was $1.6 billion1, up $0.2 billion from 1Q23
- Core EPS3 of $0.94, up 20%2 from 1Q23. EPS of $0.45, down 38%2 from 1Q23. Excluding the impact of the GA Reinsurance Transaction, EPS was $0.873, up 21%2 from 1Q23
- Core ROE3 of 16.7% and ROE of 8.0%. Excluding the impact of the GA Reinsurance Transaction, ROE was 15.5%3
- LICAT ratio4 of 138%
- APE sales 21% higher5, new business CSM up 52%2 and new business value ("NBV") up 34%5 from 1Q236
- Global Wealth and Asset Management ("Global WAM") net inflows5 of $6.7 billion, up from $4.4 billion in 1Q23
"After a milestone year for Manulife, we continued to show strong momentum in 1Q24 by delivering superior results, including 20% core EPS growth, an increase of 11% in adjusted book value per common share3, and record level APE sales with double-digit growth across each of our insurance segments. We again demonstrated a disciplined focus on execution by closing the largest ever LTC reinsurance transaction in the first quarter and entering the largest ever universal life reinsurance agreement in Canada. I'm excited by our momentum in the first quarter and by the opportunities ahead of us to continue generating shareholder value."
- Roy Gori, Manulife President & Chief Executive Officer
"We had a strong start to 2024 with record levels of new business CSM and new business value, reflecting 52% and 34% growth, respectively. Global WAM saw strong net inflows of $6.7 billion, and our capital position remains robust with a LICAT ratio of 138%. Looking ahead, we remain committed to further improving ROE through disciplined capital allocation and continued business performance improvements."
- Colin Simpson, Manulife Chief Financial Officer
Results at a Glance
Quarterly Results | |||||
($ millions, unless otherwise stated) | 1Q24 | 1Q23 | Change2,5 | ||
Net income attributed to shareholders | $ | 866 | $ | 1,406 | (38)% |
Core earnings | $ | 1,754 | $ | 1,531 | 16% |
EPS ($) | $ | 0.45 | $ | 0.73 | (38)% |
Core EPS ($) | $ | 0.94 | $ | 0.79 | 20% |
ROE | 8.0% | 13.6% | (5.6) pps | ||
Core ROE | 16.7% | 14.8% | 1.9 pps | ||
Book value per common share ($) | $ | 23.09 | $ | 22.01 | 5% |
Adjusted BV per common share ($) | $ | 33.39 | $ | 30.04 | 11% |
Financial leverage ratio (%)3 | 24.3% | 26.0% | (1.7) pps | ||
APE sales | $ | 1,883 | $ | 1,600 | 21% |
New business CSM | $ | 658 | $ | 442 | 52% |
NBV | $ | 669 | $ | 509 | 34% |
Global WAM net flows ($ billions) | $ | 6.7 | $ | 4.4 | 55% |
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Results by Segment
($ millions, unless otherwise stated) | Quarterly Results | |||||
1Q24 | 1Q23 | Change5 | ||||
Asia (US$) | ||||||
Net income attributed to shareholders | $ | 270 | $ | 384 | (29)% | |
Core earnings | 488 | 361 | 39% | |||
APE sales | 950 | 868 | 13% | |||
New business CSM | 364 | 222 | 68% | |||
NBV | 343 | 275 | 28% | |||
Canada | ||||||
Net income attributed to shareholders | $ | 273 | $ | 309 | (12)% | |
Core earnings | 364 | 353 | 3% | |||
APE sales | 450 | 293 | 54% | |||
New business CSM | 70 | 46 | 52% | |||
NBV | 157 | 92 | 71% | |||
U.S. (US$) | ||||||
Net income attributed to shareholders | $ | (80) | $ | 138 | nm | |
Core earnings | 335 | 285 | 18% | |||
APE sales | 113 | 99 | 14% | |||
New business CSM | 72 | 70 | 3% | |||
NBV | 37 | 34 | 9% | |||
Global WAM | ||||||
Net income attributed to shareholders | $ | 365 | $ | 297 | 24% | |
Core earnings | 357 | 287 | 25% | |||
Gross flows ($ billions)5 | 45.4 | 38.8 | 19% | |||
Average AUMA ($ billions)5 | 880 | 804 | 9% | |||
Core EBITDA margin (%)3 | 25.5% | 22.4% | 310 bps |
Strategic Highlights
We are delivering against our strategy to optimize our portfolio
In the first quarter, we closed a milestone reinsurance transaction with Global Atlantic on four in-force blocks of legacy/low ROE business, including the largest LTC reinsurance deal in history. We have commenced a share buyback program to return capital released from this transaction to our shareholders.
In Canada, we entered into the largest universal life reinsurance agreement of its kind. The transaction, which closed on April 2, 2024, transferred $5.6 billion of insurance contract net liabilities to RGA Canada7. The expected capital release of $0.8 billion represents an attractive 16.2 times earnings multiple and will be returned to shareholders through an ordinary share repurchase program.8
In Asia, we continued to roll out our top-tier recognition and activation program, Manulife Pro, across the region with the recent expansion to Indonesia and Japan. The program provides selected agents with differentiated resources and tools, including dedicated underwriting support and enhanced customer engagement services with access to customer leads.
In Global WAM, we announced the closing of a $1.0 billion institutional fund - Manulife Capital Partners VII. The fund will invest in U.S. middle market companies across multiple industries, focusing on growth and high-yield opportunities.
In addition, we partnered with the Indonesia Investment Authority sovereign wealth fund to raise and manage funds for investment. The partnership involves co-investments between the sovereign wealth fund, Manulife, and third-party investors in Indonesian infrastructure, real estate, and the natural capital sectors, which include timberland and agriculture assets.
We are enhancing our digital leadership, delivering better customer experience and superior distribution capabilities
In Asia, we completed the roll-out of M-Pro, a first-in-market digital pre-issuance verification tool, to all distribution channels in Vietnam. M-Pro has further improved customer experience and we have received outstanding
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feedback on the ease of navigating policy issuance details, ability to review crucial policy information and transparency of the consultation process.
In the U.S., we accelerated our distribution team's ability to act on sales opportunities and improved their efficiency in assisting agents by implementing JHINI - our new, AI-powered, sales enablement tool.
In addition, we streamlined our underwriting process and improved our John Hancock customers' experience by expanding our usage of electronic health records and leveraging other types of underwriting evidence, which have allowed us to eliminate certain medical test requirements for all ages and face amounts.
In Global WAM, we completed the implementation of a new advisor retail wealth platform in Canada as part of our digital transformation strategy, representing more than $54 billion in AUMA, by leveraging an industry leading technology platform. The platform delivers an enhanced advisor and client experience and enables advisors to streamline their processes.
We are helping our customers live longer, healthier, and better lives
In Canada, we entered into a multi-year loyalty rewards partnership agreement with Aeroplan. Beginning in early summer 2024, eligible Manulife group benefits members will be able to earn rewards points using our group benefits digital platforms by engaging in behaviours and activities that encourage health and well-being.
In the U.S., we drove a 43% improvement compared with 1Q23 in the number of visits to the Vitality page of JohnHancock.com supported by the launch of Your Year in Wellness - our first social-sharing campaign to raise awareness about the value of John Hancock Vitality.
Delivered strong core earnings growth, while net income reflected the impact of the GA Reinsurance Transaction with largely neutral impact to book value9
Core earnings of $1.8 billion in 1Q24, up 16% from 1Q23
The 16% year-over-year increase in core earnings reflects strong business growth across our insurance businesses and higher fee income in Global WAM benefitting from favourable market impacts and positive net flows. Core earnings increased 39% in Asia and 25% in Global WAM compared with 1Q23. The provision for expected credit loss was a modest net release in 1Q24 compared with a net charge in 1Q23, reflecting a benign credit experience this quarter. Updates to actuarial methods and assumptions in the second half of 2023 also contributed to core earnings growth. These were partially offset by modestly more adverse insurance experience, and higher workforce-related costs primarily reflecting strong TSR10 performance. The net impact of the GA Reinsurance Transaction on core earnings was a $18 million charge in 1Q24.
Net Income attributed to shareholders of $0.9 billion in 1Q24, $0.5 billion lower compared with 1Q23
The $0.5 billion decrease in net income reflects the $0.8 billion impact from the GA Reinsurance Transaction, partially offset by core earnings growth. Most of the GA Reinsurance Transaction impact is from the sale of debt instruments related to the transaction, which, is broadly offset by an associated change in Other Comprehensive Income resulting in a neutral impact to book value. This, along with lower-than-expected returns on alternative long-duration assets and higher-than-expected returns on public equity, resulted in a $0.8 billion market experience loss in 1Q24. The overall book value per common share increased 5% compared with 1Q23.
Record levels of new insurance business results and strong net inflows in Global WAM
Continued momentum in our 1Q24 new business results with year-over-year growth across all insurance segments, resulting in increases of 21%, 52% and 34% in APE sales, new business CSM and NBV, respectively
- In Asia, APE sales increased 13% from 1Q23, driven by growth in Asia Other and Japan, partially offset by lower sales in Hong Kong. Business mix and the impact of updates to actuarial methods and assumptions in the prior year further contributed to a 68% growth in new business CSM. NBV also increased 28% compared with 1Q23. The improvement in NBV margin was driven by our pricing discipline and changes in business mix.
- Canada generated 54% growth in APE sales, driven by higher sales volumes in all business units, led by large-case Group Insurance sales. Combined with margin expansion in our insurance businesses, NBV and new business CSM increased 71% and 52%, respectively.
- In the U.S., APE sales increased 14%, reflecting an increase in demand from affluent customers for accumulation insurance products. Combined with product mix, this led to a 3% and 9% increase in new business CSM and NBV, respectively.
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Global WAM net inflows of $6.7 billion in 1Q24, increased $2.3 billion compared with $4.4 billion in 1Q23
- Retirement net inflows of $3.2 billion in 1Q24 increased from $1.2 billion in 1Q23, reflecting higher new retirement plan sales across our three geographies.
- Retail net inflows of $1.7 billion in 1Q24 increased from $0.8 billion in 1Q23, driven by increased demand for investment products amid equity market recovery and improved investor sentiment.
- Institutional Asset Management net inflows of $1.8 billion in 1Q24 decreased compared with $2.5 billion in 1Q23 as higher fixed income mandates sales and lower money market redemptions were more than offset by higher redemptions in fixed income and equity mandates.
Increase in CSM balance driven by organic CSM growth and favourable impact of markets
CSM net of NCI11 was $21,089 million as at March 31, 2024
CSM net of NCI increased $649 million compared with December 31, 2023. Organic CSM movement was an increase of $314 million in 1Q24, primarily driven by the impact of new business and interest accretion, partially offset by amortization recognized in core earnings. Insurance experience improved both quarter-over-quarter and year-over-year. Inorganic CSM movement was an increase of $335 million for the same period, primarily driven by the favourable impacts of equity market performance and changes in foreign currency exchange rates, partially offset by the impact of the GA Reinsurance Transaction. Post-tax CSM net of NCI1 was $18,547 million as at March 31, 2024.
- Core earnings, net income attributed to shareholders excluding the impact of the GA Reinsurance Transaction and post-tax contractual service margin net of NCI ("post-tax CSM net of NCI") are non-GAAP financial measures. For more information on non-GAAP and other financial measures, see "Non-GAAP and other financial measures" below and in our 1Q24 Management's Discussion and Analysis ("1Q24 MD&A").
- Percentage growth / declines in core earnings, diluted core earnings per common share ("core EPS"), diluted earnings (loss) per share ("EPS"), EPS excluding the impact of the GA Reinsurance Transaction, new business contractual service margin net of NCI ("new business CSM"), and net income attributed to shareholders are stated on a constant exchange rate basis and are non-GAAP ratios.
- Core EPS, EPS excluding the impact of the GA Reinsurance transaction, core ROE, ROE excluding the impact of the GA Reinsurance Transaction, adjusted book value per common share ("adjusted BV per common share"), financial leverage ratio and core EBITDA margin are non-GAAP ratios.
- Life Insurance Capital Adequacy Test ("LICAT") ratio of The Manufacturers Life Insurance Company ("MLI") as at March 31, 2024. LICAT ratio is disclosed under the Office of the Superintendent of Financial Institutions Canada's ("OSFI's") Life Insurance Capital Adequacy Test Public Disclosure Requirements guideline.
- For more information on annualized premium equivalent ("APE") sales, NBV, net flows, gross flows and average asset under management and administration ("average AUMA"), see "Non-GAAP and other financial measures" below. In this news release, percentage growth/decline in APE sales, NBV, net flows, gross flows and average AUMA are stated on a constant exchange rate basis.
- Refer to "Result at a Glance" for 1Q24 and 1Q23 results.
- RGA Life Reinsurance Company of Canada. Insurance contract net liabilities as of March 31, 2024.
- See "Caution regarding forward-looking statements" below. Expected capital release and earnings multiple estimates were as of December 31, 2023.
- See section A1 "Profitability" in our 1Q24 MD&A for more information on notable items attributable to core earnings and net income attributed to shareholders.
- Total shareholder return ("TSR").
- Non-controllinginterests ("NCI").
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Quarterly Results Conference Call
Manulife will host a conference call and live webcast on its first quarter 2024 results on May 9, 2024, at 8:00 a.m. (ET). To access the conference call, dial 1-800-806-5484 or 1-416-340-2217 (Passcode: 5223647#). Please call in 15 minutes before the scheduled start time. You will be required to provide your name and organization to the operator. You may access the webcast at manulife.com/en/investors/results-and-reports.
The archived webcast will be available following the call at the same URL as above. A replay of the call will also be available until June 8, 2024, by dialing 1-800-408-3053 or 1-905-694-9451 (Passcode: 6423312#).
The First Quarter 2024 Statistical Information Package and 2023 Embedded Value report are also available on the Manulife website at www.manulife.com/en/investors/results-and-reports.
This earnings news release should be read in conjunction with the Company's First Quarter 2024 Report to Shareholders, including our unaudited interim Consolidated Financial Statements for the three months ended March 31, 2024, prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board, which is available on our website at https://www.manulife.com/en/investors/results-and-reports.html.The Company's 1Q24 MD&A and additional information relating to the Company is available on the SEDAR+ website at http://www.sedarplus.caand on the U.S. Securities and Exchange Commission's ("SEC") website at http://www.sec.gov.
Any information contained in, or otherwise accessible through, websites mentioned in this news release does not form a part of this document unless it is expressly incorporated by reference.
Media Inquiries | Investor Relations |
Cheryl Holmes | Hung Ko |
(416) 557-0945 | (416) 806-9921 |
Cheryl_Holmes@manulife.com | Hung_Ko@manulife.com |
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Earnings
The following table presents net income attributed to shareholders, consisting of core earnings and details of the items excluded from core earnings:
($ millions) | Quarterly Results | ||||||
1Q24 | 4Q23 | 1Q23 | |||||
Core earnings | $ | 657 | |||||
Asia | $ | 564 | $ | 489 | |||
Canada | 364 | 352 | 353 | ||||
U.S. | 452 | 474 | 385 | ||||
Global Wealth and Asset Management | 357 | 353 | 287 | ||||
Corporate and Other | (76) | 30 | 17 | ||||
Total core earnings | $ | 1,754 | $ | 1,773 | $ | 1,531 | |
Items excluded from core earnings: | (779) | ||||||
Market experience gains (losses) | (133) | (65) | |||||
Change in actuarial methods and assumptions that flow | - | ||||||
directly through income | 119 | - | |||||
Restructuring charge | - | (36) | - | ||||
Reinsurance transactions, tax-related items and other | (109) | (64) | (60) | ||||
Net income attributed to shareholders | $ | 866 | $ | 1,659 | $ | 1,406 |
Non-GAAP and other financial measures
The Company prepares its Consolidated Financial Statements in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. We use a number of non-GAAP and other financial measures to evaluate overall performance and to assess each of our businesses. This section includes information required by National Instrument 52-112 - Non-GAAPand Other Financial Measures Disclosure in respect of "specified financial measures" (as defined therein).
Non-GAAPfinancial measures include core earnings (loss); core earnings available to common shareholders; net income excluding the impact of the GA Reinsurance Transaction; common shareholders' net income excluding the GA Reinsurance Transaction; core earnings before income taxes, depreciation and amortization ("core EBITDA"); core revenue; adjusted book value; post-tax contractual service margin; and post-tax contractual service margin net of NCI ("post-tax CSM net of NCI"). In addition, non-GAAP financial measures include the following stated on a constant exchange rate ("CER") basis: any of the foregoing non-GAAP financial measures; net income attributed to shareholders; and common shareholders' net income.
Non-GAAPratios include core return on common shareholders' equity ("core ROE"); return on common shareholders' equity ("ROE") excluding the impact of the GA Reinsurance Transaction; diluted core earnings per common share ("core EPS"); diluted earnings per common share ("EPS") excluding the impact of the GA Reinsurance Transaction; adjusted book value per common share; financial leverage ratio; core EBITDA margin; and percentage growth/decline on a constant exchange rate basis in any of the above non-GAAP financial measures and non-GAAP ratios; net income attributed to shareholders; diluted earnings per common share ("EPS"); and new business CSM.
Other specified financial measures include NBV; APE sales; gross flows; net flows; average assets under management and administration ("average AUMA"); and percentage growth/decline in these foregoing specified financial measures. In addition, explanations of the components of the CSM movement, other than the new business CSM were provided in the 1Q24 MD&A.
Non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under GAAP and, therefore, might not be comparable to similar financial measures disclosed by other issuers. Therefore, they should not be considered in isolation or as a substitute for any other financial information prepared in accordance with GAAP. For more information on non-GAAP financial measures, including those referred to above, see the section "Non-GAAP and other financial measures" in our 1Q24 MD&A, which is incorporated by reference.
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Reconciliation of core earnings to net income attributed to shareholders
($ millions, post-tax and based on actual foreign exchange | 1Q24 | |||||||||||
rates in effect in the applicable reporting period, unless | Global | Corporate | ||||||||||
otherwise stated) | Asia | Canada | U.S. | WAM | and Other | Total | ||||||
Income (loss) before income taxes | $ | 594 | $ | 381 | $ | (154) | $ | 426 | $ | 5 | $ | 1,252 |
Income tax (expenses) recoveries | ||||||||||||
Core earnings | (67) | (91) | (103) | (58) | 33 | (286) | ||||||
Items excluded from core earnings | (83) | 8 | 149 | (3) | (65) | 6 | ||||||
Income tax (expenses) recoveries | (150) | (83) | 46 | (61) | (32) | (280) | ||||||
Net income (post-tax) | 444 | 298 | (108) | 365 | (27) | 972 | ||||||
Less: Net income (post-tax) attributed to | ||||||||||||
Non-controlling interests ("NCI") | 55 | - | - | - | - | 55 | ||||||
Participating policyholders | 26 | 25 | - | - | - | 51 | ||||||
Net income (loss) attributed to shareholders (post-tax) | 363 | 273 | (108) | 365 | (27) | 866 | ||||||
Less: Items excluded from core earnings (post-tax) | ||||||||||||
Market experience gains (losses) | (250) | (91) | (534) | 6 | 90 | (779) | ||||||
Changes in actuarial methods and assumptions that | - | - | - | - | - | - | ||||||
flow directly through income | ||||||||||||
Restructuring charge | - | - | - | - | - | - | ||||||
Reinsurance transactions, tax related items and other | (44) | - | (26) | 2 | (41) | (109) | ||||||
Core earnings (post-tax) | $ | 657 | $ | 364 | $ | 452 | $ | 357 | $ | (76) | $ | 1,754 |
Income tax on core earnings (see above) | 67 | 91 | 103 | 58 | (33) | 286 | ||||||
Core earnings (pre-tax) | $ | 724 | $ | 455 | $ | 555 | $ | 415 | $ | (109) | $ | 2,040 |
Core earnings, CER basis and U.S. dollars
(Canadian $ millions, post-tax and based on actual foreign | 1Q24 | |||||||||||
exchange rates in effect in the applicable reporting period, | Global | Corporate | ||||||||||
unless otherwise stated) | Asia | Canada | U.S. | WAM | and Other | Total | ||||||
Core earnings (post-tax) | $ | 657 | $ | 364 | $ | 452 | $ | 357 | $ | (76) | $ | 1,754 |
CER adjustment(1) | - | - | - | - | - | - | ||||||
Core earnings, CER basis (post-tax) | $ | 657 | $ | 364 | $ | 452 | $ | 357 | $ | (76) | $ | 1,754 |
Income tax on core earnings, CER basis(2) | 67 | 91 | 103 | 58 | (33) | 286 | ||||||
Core earnings, CER basis (pre-tax) | $ | 724 | $ | 455 | $ | 555 | $ | 415 | $ | (109) | $ | 2,040 |
Core earnings (U.S. dollars) - Asia and U.S. segments | ||||||||||||
Core earnings (post-tax)(3), US $ | $ | 488 | $ | 335 | ||||||||
CER adjustment US $(1) | - | - | ||||||||||
Core earnings, CER basis (post-tax), US $ | $ | 488 | $ | 335 |
- The impact of updating foreign exchange rates to that which was used in 1Q24.
- Income tax on core earnings adjusted to reflect the foreign exchange rates for the Statement of Income in effect for 1Q24.
- Core earnings (post-tax) in Canadian $ is translated to US $ using the US $ Statement of Income exchange rate for 1Q24.
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Reconciliation of core earnings to net income attributed to shareholders
($ millions, post-tax and based on actual foreign exchange | 4Q23 | |||||||||||
rates in effect in the applicable reporting period, unless | Global | Corporate | ||||||||||
otherwise stated) | Asia | Canada | U.S. | WAM | and Other | Total | ||||||
Income (loss) before income taxes | $ | 847 | $ | 498 | $ | 244 | $ | 424 | $ | 110 | $ | 2,123 |
Income tax (expenses) recoveries | ||||||||||||
Core earnings | (76) | (87) | (113) | (55) | 37 | (294) | ||||||
Items excluded from core earnings | (33) | (29) | 67 | (3) | (30) | (28) | ||||||
Income tax (expenses) recoveries | (109) | (116) | (46) | (58) | 7 | (322) | ||||||
Net income (post-tax) | 738 | 382 | 198 | 366 | 117 | 1,801 | ||||||
Less: Net income (post-tax) attributed to | ||||||||||||
Non-controlling interests ("NCI") | 37 | - | - | 1 | 1 | 39 | ||||||
Participating policyholders | 86 | 17 | - | - | - | 103 | ||||||
Net income (loss) attributed to shareholders (post-tax) | 615 | 365 | 198 | 365 | 116 | 1,659 | ||||||
Less: Items excluded from core earnings (post-tax) | ||||||||||||
Market experience gains (losses) | - | 9 | (279) | 51 | 86 | (133) | ||||||
Changes in actuarial methods and assumptions that | ||||||||||||
flow directly through income | 89 | 4 | 26 | - | - | 119 | ||||||
Restructuring charge | - | - | - | (36) | - | (36) | ||||||
Reinsurance transactions, tax related items and other | (38) | - | (23) | (3) | - | (64) | ||||||
Core earnings (post-tax) | $ | 564 | $ | 352 | $ | 474 | $ | 353 | $ | 30 | $ | 1,773 |
Income tax on core earnings (see above) | 76 | 87 | 113 | 55 | (37) | 294 | ||||||
Core earnings (pre-tax) | $ | 640 | $ | 439 | $ | 587 | $ | 408 | $ | (7) | $ | 2,067 |
Core earnings, CER basis and U.S. dollars
4Q23 | ||||||||||||
(Canadian $ millions, post-tax and based on actual foreign | ||||||||||||
exchange rates in effect in the applicable reporting period, | Global | Corporate | ||||||||||
unless otherwise stated) | Asia | Canada | U.S. | WAM | and Other | Total | ||||||
Core earnings (post-tax) | $ | 564 | $ | 352 | $ | 474 | $ | 353 | $ | 30 | $ | 1,773 |
CER adjustment(1) | (7) | - | (4) | (2) | (1) | (14) | ||||||
Core earnings, CER basis (post-tax) | $ | 557 | $ | 352 | $ | 470 | $ | 351 | $ | 29 | $ | 1,759 |
Income tax on core earnings, CER basis(2) | 76 | 87 | 112 | 55 | (38) | 292 | ||||||
Core earnings, CER basis (pre-tax) | $ | 633 | $ | 439 | $ | 582 | $ | 406 | $ | (9) | $ | 2,051 |
Core earnings (U.S. dollars) - Asia and U.S. segments | ||||||||||||
Core earnings (post-tax)(3), US $ | $ | 414 | $ | 349 | ||||||||
CER adjustment US $(1) | (1) | - | ||||||||||
Core earnings, CER basis (post-tax), US $ | $ | 413 | $ | 349 |
- The impact of updating foreign exchange rates to that which was used in 1Q24.
- Income tax on core earnings adjusted to reflect the foreign exchange rates for the Statement of Income in effect for 1Q24.
- Core earnings (post-tax) in Canadian $ is translated to US $ using the US $ Statement of Income exchange rate for 4Q23.
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Reconciliation of core earnings to net income attributed to shareholders
($ millions, post-tax and based on actual foreign exchange | 1Q23 | |||||||||||
rates in effect in the applicable reporting period, unless | Global | Corporate | ||||||||||
otherwise stated) | Asia | Canada | U.S. | WAM | and Other | Total | ||||||
Income (loss) before income taxes | $ | 613 | $ | 423 | $ | 219 | $ | 345 | $ | 119 | $ | 1,719 |
Income tax (expenses) recoveries | ||||||||||||
Core earnings | (68) | (85) | (86) | (45) | 14 | (270) | ||||||
Items excluded from core earnings | (37) | (14) | 53 | (3) | (38) | (39) | ||||||
Income tax (expenses) recoveries | (105) | (99) | (33) | (48) | (24) | (309) | ||||||
Net income (post-tax) | 508 | 324 | 186 | 297 | 95 | 1,410 | ||||||
Less: Net income (post-tax) attributed to | ||||||||||||
Non-controlling interests ("NCI") | 54 | - | - | - | - | 54 | ||||||
Participating policyholders | (65) | 15 | - | - | - | (50) | ||||||
Net income (loss) attributed to shareholders (post-tax) | 519 | 309 | 186 | 297 | 95 | 1,406 | ||||||
Less: Items excluded from core earnings (post-tax) | ||||||||||||
Market experience gains (losses) | 30 | (44) | (166) | 9 | 106 | (65) | ||||||
Changes in actuarial methods and assumptions that | ||||||||||||
flow directly through income | - | - | - | - | - | - | ||||||
Restructuring charge | - | - | - | - | - | - | ||||||
Reinsurance transactions, tax related items and other | - | - | (33) | 1 | (28) | (60) | ||||||
Core earnings (post-tax) | $ | 489 | $ | 353 | $ | 385 | $ | 287 | $ | 17 | $ | 1,531 |
Income tax on core earnings (see above) | 68 | 85 | 86 | 45 | (14) | 270 | ||||||
Core earnings (pre-tax) | $ | 557 | $ | 438 | $ | 471 | $ | 332 | $ | 3 | $ | 1,801 |
Core earnings, CER basis and U.S. dollars
1Q23 | ||||||||||||
(Canadian $ millions, post-tax and based on actual foreign | ||||||||||||
exchange rates in effect in the applicable reporting period, | Global | Corporate | ||||||||||
unless otherwise stated) | Asia | Canada | U.S. | WAM | and Other | Total | ||||||
Core earnings (post-tax) | $ | 489 | $ | 353 | $ | 385 | $ | 287 | $ | 17 | $ | 1,531 |
CER adjustment(1) | (16) | - | (1) | (1) | - | (18) | ||||||
Core earnings, CER basis (post-tax) | $ | 473 | $ | 353 | $ | 384 | $ | 286 | $ | 17 | $ | 1,513 |
Income tax on core earnings, CER basis(2) | 66 | 85 | 85 | 45 | (14) | 267 | ||||||
Core earnings, CER basis (pre-tax) | $ | 539 | $ | 438 | $ | 469 | $ | 331 | $ | 3 | $ | 1,780 |
Core earnings (U.S. dollars) - Asia and U.S. segments | ||||||||||||
Core earnings (post-tax)(3), US $ | $ | 361 | $ | 285 | ||||||||
CER adjustment US $(1) | (10) | - | ||||||||||
Core earnings, CER basis (post-tax), US $ | $ | 351 | $ | 285 |
- The impact of updating foreign exchange rates to that which was used in 1Q24.
- Income tax on core earnings adjusted to reflect the foreign exchange rates for the Statement of Income in effect for 1Q24.
- Core earnings (post-tax) in Canadian $ is translated to US $ using the US $ Statement of Income exchange rate for 1Q23.
Core earnings available to common shareholders
($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)
Full Year | ||||||||||||
Quarterly Results | Results | |||||||||||
1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | 2023 | |||||||
Core earnings | $ | 1,754 | $ | 1,773 | $ | 1,743 | $ | 1,637 | $ | 1,531 | $ | 6,684 |
Less: Preferred share dividends and other equity distributions | 55 | 99 | 54 | 98 | 52 | 303 | ||||||
Core earnings available to common shareholders | 1,699 | 1,674 | 1,689 | 1,539 | 1,479 | 6,381 | ||||||
CER adjustment(1) | - | (14) | 2 | (8) | (18) | (38) | ||||||
Core earnings available to common shareholders, CER basis | $ | 1,699 | $ | 1,660 | $ | 1,691 | $ | 1,531 | $ | 1,461 | $ | 6,343 |
- The impact of updating foreign exchange rates to that which was used in 1Q24.
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Core ROE
($ millions, unless otherwise stated) | Full Year | |||||||||||
Quarterly Results | Results | |||||||||||
1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | 2023 | |||||||
Core earnings available to common shareholders | $ | 1,699 | $ | 1,674 | $ | 1,689 | $ | 1,539 | $ | 1,479 | $ | 6,381 |
Annualized core earnings available to common shareholders | ||||||||||||
(post-tax) | $ | 6,833 | $ | 6,641 | $ | 6,701 | $ | 6,173 | $ | 5,998 | $ | 6,381 |
Average common shareholders' equity (see below) | $ | 40,984 | $ | 40,563 | $ | 39,897 | $ | 39,881 | $ | 40,465 | $ | 40,201 |
Core ROE (annualized) (%) | 16.7% | 16.4% | 16.8% | 15.5% | 14.8% | 15.9% | ||||||
Average common shareholders' equity | ||||||||||||
Total shareholders' and other equity | $ | 48,250 | $ | 47,039 | $ | 47,407 | $ | 45,707 | $ | 47,375 | $ | 47,039 |
Less: Preferred shares and other equity | 6,660 | 6,660 | 6,660 | 6,660 | 6,660 | 6,660 | ||||||
Common shareholders' equity | $ | 41,590 | $ | 40,379 | $ | 40,747 | $ | 39,047 | $ | 40,715 | $ | 40,379 |
Average common shareholders' equity | $ | 40,984 | $ | 40,563 | $ | 39,897 | $ | 39,881 | $ | 40,465 | $ | 40,201 |
Net income attributed to shareholders excluding the GA Reinsurance Transaction
For the three months ended March 31, | ||
($ millions and post-tax) | 2024 | |
Net income attributed to shareholders per financial statements | $ | 866 |
Less: Net loss attributed to shareholders from the GA Reinsurance Transaction | (767) | |
Net income attributed to shareholders excluding the GA Reinsurance Transaction | $ | 1,633 |
ROE excluding the GA Reinsurance Transaction | ||
For the three months ended March 31, | ||
($ millions, unless otherwise stated) | 2024 | |
Net income attributed to shareholders excluding the GA Reinsurance Transaction | $ | 1,633 |
Less: Preferred share dividends and other equity distributions | 55 | |
Common shareholders' net income excluding the GA Reinsurance transaction | $ | 1,578 |
Annualized common shareholders' net income excluding the GA Reinsurance transaction | $ | 6,347 |
Average Common shareholders' equity | $ | 40,984 |
ROE excluding the GA Reinsurance Transaction (annualized) | 15.5% |
CSM and post-tax CSM information
($ millions pre-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)
Mar 31, | Dec 31, | Sept 30, | June 30, | Mar 31, | ||||||
As at | 2024 | 2023 | 2023 | 2023 | 2023 | |||||
CSM | $ | 22,075 | $ | 21,301 | $ | 18,149 | $ | 18,103 | $ | 18,200 |
Less: CSM for NCI | 986 | 861 | 780 | 680 | 733 | |||||
CSM, net of NCI | $ | 21,089 | $ | 20,440 | $ | 17,369 | $ | 17,423 | $ | 17,467 |
CER adjustment(1) | (26) | 206 | (27) | 175 | (316) | |||||
CSM, net of NCI, CER basis | $ | 21,063 | $ | 20,646 | $ | 17,342 | $ | 17,598 | $ | 17,151 |
Post-tax CSM | ||||||||||
CSM | $ | 22,075 | $ | 21,301 | $ | 18,149 | $ | 18,103 | $ | 18,200 |
Marginal tax rate on CSM | (2,650) | (2,798) | (2,474) | (2,645) | (2,724) | |||||
Post-tax CSM | $ | 19,425 | $ | 18,503 | $ | 15,675 | $ | 15,458 | $ | 15,476 |
CSM, net of NCI | $ | 21,089 | $ | 20,440 | $ | 17,369 | $ | 17,423 | $ | 17,467 |
Marginal tax rate on CSM net of NCI | (2,542) | (2,692) | (2,377) | (2,546) | (2,617) | |||||
Post-tax CSM net of NCI | $ | 18,547 | $ | 17,748 | $ | 14,992 | $ | 14,877 | $ | 14,850 |
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Manulife Financial Corporation published this content on 08 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 May 2024 21:43:50 UTC.
