C$ unless otherwise
stated TSX/NYSE/PSE: MFC SEHK:
945
This earnings news
release for Manulife Financial Corporation ("Manulife" or the
"Company") should be read in conjunction with the Company's First
Quarter 2022 Report to Shareholders, including our unaudited
interim Consolidated Financial Statements for the three months
ended March 31, 2022, prepared in accordance with International
Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board ("IASB"), which are
available on our website at
www.manulife.com/en/investors/results-and-reports. The MD&A and
additional information relating to the Company is available on the
SEDAR website at http://www.sedar.com and on the U.S. Securities
and Exchange Commission's ("SEC") website at
http://www.sec.gov.
|
TORONTO, May 11, 2022
/CNW/ - Today, Manulife announced its first quarter of 2022
("1Q22") results. Key highlights include:
- Net income attributed to shareholders of $3.0 billion in 1Q22, up $2.2 billion from the first quarter of 2021
("1Q21")
- Core earnings1 of $1.6
billion in 1Q22, down 4% on a constant exchange rate basis
from 1Q212
- LICAT ratio3 of 140%
- Core ROE4 of 11.8% and ROE of 23.0% in 1Q22
- NBV5 of $513 million
in 1Q22, down 14%6 from 1Q21
- APE sales5 of $1.6
billion in 1Q22, down 9% from 1Q21
- Global Wealth and Asset Management ("Global WAM") net
inflows5 of $6.9 billion
in 1Q22, compared with net inflows of $1.4
billion in 1Q21
- Global WAM average AUMA5 increased by 8% in 1Q22
from 1Q21
- Closed the U.S. variable annuity reinsurance transaction and
released $2.4 billion of
capital.7 We commenced share buybacks under our Normal
Course Issuer Bid ("NCIB"), and as of March
31, 2022 purchased for cancellation approximately 14.4
million common shares for $377
million
- Embedded value5 of $64.8
billion or $33.35 per share,
as of December 31, 2021, an increase
of $3.7 billion from December 31, 2020
"Our diversified footprint, operational resilience, and proven
digital capabilities enabled us to deliver solid results in the
first quarter, despite a challenging operating environment caused
by the resurgence of COVID-19 and global market volatility," said
Manulife President & Chief Executive Officer Roy Gori.
_______________________
|
1
|
Core earnings is a
non-GAAP financial measure. For more information on non-GAAP and
other financial measures, see "Non-GAAP and Other Financial
Measures" below and in our First Quarter 2022 Management's
Discussion and Analysis ("1Q22 MD&A") for additional
information.
|
2
|
Percentage growth /
declines in core earnings stated on a constant exchange rate basis
is a non-GAAP ratio.
|
3
|
Life Insurance Capital
Adequacy Test ("LICAT") ratio of The Manufacturers Life Insurance
Company ("MLI"). 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.
|
4
|
Core return on common
shareholders' equity ("Core ROE") is a non-GAAP ratio.
|
5
|
For more information on
new business value ("NBV"), annualized premium equivalent ("APE")
sales, net flows, average assets under management and
administration ("average AUMA") and embedded value, see "Non-GAAP
and Other Financial Measures" below.
|
6
|
In this news release,
percentage growth / declines in NBV, APE sales and average AUMA are
stated on a constant exchange rate basis.
|
7
|
Includes a release of
$1.6 billion of additional capital, a one-time after-tax gain of
$842 million recognized in 1Q22, and a one-time after-tax loss of
$40 million recognized in the fourth quarter of 2021
("4Q21").
|
"Global WAM generated another quarter of strong net inflows of
$6.9 billion, and our Canada and U.S. insurance businesses achieved
double-digit NBV growth, benefiting from ongoing strong customer
demand," Mr. Gori continued. "While the rapid and unprecedented
resurgence of COVID-19 disrupted new business activities in
multiple markets in Asia, our
diversified, digitally-enabled, and well-established distribution
channels delivered double digit growth in APE Sales and NBV
relative to the average levels during the first wave of the
pandemic in the first and second quarters of 2020."
"Looking to the future, we believe the importance of insurance
and wealth management solutions is more visible than ever before
and we are encouraged to see signs of stronger customer demand as
containment measures relax in some markets. I am confident in our
ability to capture this rebound as those markets recover from these
temporary disruptions." Mr. Gori added.
"Our U.S. variable annuity reinsurance transaction with
Venerable Holdings Inc. closed during the quarter, resulting in the
release of $2.4 billion of capital.
We commenced share buybacks and purchased 0.74% of our common
shares in the first two months following the transaction,
demonstrating our commitment to deliver shareholder value and
neutralize the impact of the transaction on Core EPS," said
Phil Witherington, Chief Financial
Officer. "We also delivered in-force business growth of 7% after
excluding the impact of the transaction1, and achieved
net favourable policyholder experience amid continued impacts from
COVID-19, reflecting the diverse nature of our business."
"We are pleased to be providing an update on the expected
impacts of IFRS 17 on our financial reporting and targets as we
look towards its upcoming adoption. IFRS 17 will impact where, when
and how specific items are recognized in the financial statements;
however, it will not impact the fundamental economics of our
business, our financial strength, claims paying ability, or the
dividend capacity of the Company. We are committed to our
medium-term financial and operating targets under IFRS 17, and upon
transition our core ROE target will be increased to 15%+ and
dividend payout ratio2 target range will be increased to
35% – 45% as a result of expected changes in equity and core
earnings," added Mr. Witherington.3
___________________________________
|
1 Adjusted
for $45 million (pre-tax) of lost expected profit on in-force due
to the U.S. variable annuity reinsurance transaction. Percentage
growth is stated on a constant exchange rate basis.
|
2 Common
share core dividend payout ratio ("dividend payout ratio") is a
non-GAAP ratio.
|
3 See
"Caution regarding forward-looking statements" below.
|
BUSINESS HIGHLIGHTS:
In Asia, we commenced offering insurance solutions to
VietinBank's 14 million customers, as part of our new 16-year
exclusive bancassurance partnership in Vietnam. In the U.S., we closed the
transaction to reinsure over 75% of the legacy variable annuity
block. The transaction resulted in the release of $2.4 billion of capital. In Global WAM, we
announced the launch of the Real Asset Investment Strategy in
Canada, which provides investors
access to a mix of global private and public real asset
investments, combining the benefits of broad private asset
exposures with the liquidity benefits of allocating to public
markets.
In addition, we continued to make progress on our digital
journey in 1Q22. In Asia, greater than 10% of APE sales resulted
from leads generated using advanced analytics to identify
additional needs from existing customers. In Canada, we launched an enhanced Manulife
Vitality mobile app experience for our individual insurance
business, giving the app a new look and feel with easier navigation
to further drive customer engagement. In the U.S., we reduced the
time to onboard a producer in our digital brokerage channel from
three weeks to just five days, by implementing automated background
checks. In our Global WAM Retirement business, we enabled
registration directly through the mobile app in Canada, resulting in approximately 50,000
customers using our mobile applications by the end of the
quarter.
FINANCIAL HIGHLIGHTS:
|
Quarterly
Results
|
($ millions, unless
otherwise stated)
|
1Q22
|
1Q21
|
Profitability:
|
|
|
Net income attributed
to shareholders
|
$
2,970
|
$
783
|
Core
earnings
|
$
1,552
|
$
1,629
|
Diluted earnings per
common share ($)
|
$
1.50
|
$
0.38
|
Diluted core earnings
per common share ("Core EPS") ($)(1)
|
$
0.77
|
$
0.82
|
Return on common
shareholders' equity ("ROE")
|
23.0%
|
6.4%
|
Core ROE
|
11.8%
|
13.7%
|
Expense efficiency
ratio(1)
|
50.0%
|
48.5%
|
General
expenses
|
$
1,898
|
$
2,032
|
Business
Performance:
|
|
|
Asia new business
value
|
$
340
|
$
477
|
Canada new business
value
|
$
104
|
$
78
|
U.S. new business value
|
$
69
|
$
44
|
Total new business
value
|
$
513
|
$
599
|
Asia APE sales
|
$
1,048
|
$
1,280
|
Canada APE sales
|
$
363
|
$
355
|
U.S. APE sales
|
$
199
|
$
150
|
Total APE
sales
|
$
1,610
|
$
1,785
|
Global WAM net flows ($
billions)
|
$
6.9
|
$
1.4
|
Global WAM gross flows
($ billions)(2)
|
$
38.5
|
$
39.7
|
Global WAM assets under
management and administration ($ billions)(3)
|
$
808.0
|
$
764.1
|
Global WAM total
invested assets ($ billions)
|
$
3.5
|
$
4.3
|
Global WAM net
segregated funds net assets ($ billions)
|
$
236.6
|
$
234.5
|
Financial
Strength:
|
|
|
MLI's LICAT
ratio
|
140%
|
137%
|
Financial leverage
ratio
|
26.4%
|
29.5%
|
Book value per common
share ($)
|
$
26.33
|
$
23.40
|
Book value per common
share excluding AOCI ($)
|
$
25.28
|
$
21.84
|
(1) This item is a non-GAAP
ratio.
|
(2) For more information on
gross flows, see "Non-GAAP and Other Financial Measures"
below.
|
(3) This item is a non-GAAP
financial measure.
|
PROFITABILITY:
Reported net income attributed to shareholders of
$3.0 billion in 1Q22, up $2.2 billion from 1Q21
The increase in net income attributed to shareholders was driven
by gains from the direct impact of markets compared with losses in
the prior year quarter, a gain related to the U.S. variable annuity
reinsurance transaction, and a larger gain from investment-related
experience compared with the prior year quarter. Investment-related
experience in 1Q22 reflected the favourable impact of fixed income
reinvestment activities, higher-than-expected returns (including
fair value changes) on alternative long duration assets primarily
driven by fair value gains on private equity and real estate as
well as favourable credit experience. The gain from the direct
impact of markets in 1Q22 reflected the flattening of the yield
curve in the U.S. and Canada and
widening corporate spreads in the U.S., partially offset by
unfavourable equity market performance and losses on the sale of
available-for-sale bonds.
Delivered core earnings of $1.6
billion in 1Q22, a decrease of 4% compared with 1Q21
The decrease in core earnings was driven by lower new business
gains in Asia, unfavourable impact
of markets on seed money investments in new segregated and mutual
funds (compared with gains in the prior year quarter) and lower
in-force earnings in U.S. Annuities, primarily due to the variable
annuity reinsurance transaction. These items were partially offset
by experience gains, in-force business growth in Canada and Asia, higher yield on fixed income
investments and lower cost of external debt in Corporate and Other,
and higher new business gains in Canada and the U.S.
BUSINESS PERFORMANCE:
New business value ("NBV") of $513
million in 1Q22, a decrease of 14% compared with
1Q21
In Asia, NBV decreased 28% to $340
million, reflecting lower sales volumes in Hong Kong and several markets in Asia Other1 due to the impact of
COVID-19, lower corporate-owned life insurance ("COLI") product
sales in Japan, and unfavourable
product mix related to lower critical illness sales in mainland
China. In Canada, NBV of $104
million was up 33% from 1Q21, driven by higher margins
across all business lines. In the U.S., NBV of $69 million was up 57% from 1Q21, driven by
higher sales volumes and interest rates, and favourable product
mix.
Annualized premium equivalent ("APE") sales of $1.6 billion in 1Q22, a decrease of 9% compared
with 1Q21
In Asia, APE sales decreased 17% due to continued adverse
impacts from COVID-19 in Hong Kong
and several markets in Asia Other
and lower sales in Japan. In
Japan, APE sales declined 48%,
primarily due to a decrease in COLI product
sales. In Hong Kong, APE sales decreased 23% driven by
tighter containment measures following an outbreak of COVID-19
during the quarter. Asia Other APE sales decreased 8%, as higher
sales in bancassurance in Singapore were more than offset by lower
agency sales, which were adversely impacted by a resurgence of
COVID-19 in markets such as Vietnam and Indonesia, and lower critical illness sales in
mainland China. In Canada, APE sales increased 2%, primarily
driven by increased customer demand for our lower risk segregated
fund products and higher mid-size group insurance sales, partially
offset by variability in the large-case group insurance
market. In the U.S., APE sales increased 32%, driven by our
differentiated domestic product offerings which include the John
Hancock Vitality feature and higher customer demand for
insurance protection in the current COVID-19 environment of greater
consumer interest in improving baseline health, and strong
international sales, which are reported as a part of the U.S.
segment results.
Reported Global Wealth and Asset Management net inflows of
$6.9 billion in 1Q22, compared with
1Q21 net inflows of $1.4
billion
Net inflows in Retail were $4.0
billion in 1Q22 compared with net inflows of $6.5 billion in 1Q21, reflecting lower gross
flows, mainly in fixed income products and higher mutual fund
redemptions in Canada. This was
partially offset by Asia Retail, as higher gross flows in
mainland China and Japan were partially offset by Indonesia. U.S. Retail net inflows remained
robust and were in line with prior year. Net inflows in Retirement
were $2.0 billion in 1Q22 compared
with net inflows of $2.1 billion in
1Q21, reflecting higher plan redemptions, partially offset by
growth in member contributions and new plan sales, as well as lower
member withdrawals. Net inflows in Institutional Asset Management
were $0.9 billion in 1Q22 compared
with net outflows of $7.2 billion
in 1Q21, driven by the non-recurrence of a $9.4 billion redemption in Asia in 1Q21, partially offset by lower sales
of fixed income mandates.
UPDATE ON IFRS 17:2
IFRS 17 "Insurance Contracts" will replace IFRS 4 "Insurance
Contracts" beginning on January 1,
2023 and will materially change the recognition and
measurement of insurance contracts and the corresponding
presentation and disclosures in the Company's financial statements.
The establishment of a Contractual Service Margin ("CSM") on our
in-force business is expected to lead to an increase in insurance
contract liabilities and, together with other measurement impacts
on our assets and liabilities, to decrease equity by approximately
20% upon transition. The deferral of new business gains via the CSM
and the amortization of CSM on our in-force business into income as
services are provided, and to a substantially lesser extent the
timing of investments results, are expected to result in a net
reduction of 2022 core earnings, on transition, of approximately
10% under IFRS 17 compared with IFRS 4.
_________________________________
|
1 Asia Other
excludes Hong Kong and Japan.
|
2 See
"Caution regarding forward-looking statements" below. The
information presented reflects the Company's current interpretation
of IFRS 17 based on its facts and circumstances as of the date
hereof. Such interpretation, or the underlying relevant facts and
circumstances, may change. The Company's interpretation may also
change pending the final issuance of regulatory and industry
guidance relating to IFRS 17.
|
The CSM will be treated as available capital under
LICAT1, and our capital position will remain strong
under IFRS 17. We are also confirming our medium-term financial and
operating targets under IFRS 17, and upon transition our core ROE
target will be increased to 15%+ (from 13%+ currently) as a result
of the expected changes to core earnings and equity, and our
dividend payout ratio target range will be increased to 35% – 45%
(from 30% – 40% currently) as a result of the expected changes to
core earnings. Given that CSM is an objective metric that
illustrates the growth and future earnings capability of an
insurance business, we will be introducing two new medium-term
targets: new business CSM growth of 15% per year and CSM balance
growth of 8% – 10% per year.
QUARTERLY EARNINGS RESULTS CONFERENCE CALL
Manulife
Financial Corporation will host a First Quarter 2022 Earnings
Results Conference Call at 8:00 a.m.
ET on May 12, 2022. For local
and international locations, please call 416-340-2217 or toll free,
North America 1-800-806-5484
(Passcode: 9778458#). Please call in 15 minutes before the call
starts. You will be required to provide your name and organization
to the operator. A replay of this call will be available by
11:00 a.m. ET on May 12, 2022 through August 12, 2022 by calling 905-694-9451 or
1-800-408-3053 (Passcode: 7780836#).
The conference call will also be webcast through Manulife's
website at 8:00 a.m. ET on
May 12, 2022. You may access the
webcast at: manulife.com/en/investors/results-and-reports. An
archived version of the webcast will be available on the website
following the call at the same URL as above.
The First Quarter 2022 Statistical Information Package is also
available on the Manulife website
at: www.manulife.com/en/investors/results-and-reports.
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.
____________________________
|
1 As
indicated in OSFI's revised draft Life Insurance Capital Adequacy
Test (LICAT) 2023 guideline issued on June 21, 2021.
|
EARNINGS:
The following table presents net income attributed to
shareholders, consisting of core earnings and details of the items
excluded from core earnings:
|
Quarterly
Results
|
($ millions)
|
1Q22
|
4Q21
|
1Q21
|
Core
earnings
|
|
|
|
Asia
|
$
537
|
$
547
|
$
570
|
Canada
|
314
|
286
|
264
|
U.S.
|
486
|
467
|
501
|
Global Wealth and Asset
Management
|
324
|
387
|
312
|
Corporate and Other
(excluding core investment gains)
|
(209)
|
(79)
|
(118)
|
Core investment
gains(1)
|
100
|
100
|
100
|
Total core
earnings
|
$
1,552
|
$
1,708
|
$
1,629
|
Items excluded from
core earnings:(1)
Investment-related
experience outside of core earnings
|
558
|
126
|
77
|
Direct impact of equity
markets and interest rates and variable annuity guarantee liabilities
|
97
|
398
|
(835)
|
Restructuring
charge
|
-
|
-
|
(115)
|
Reinsurance
transaction, tax-related items and other
|
763
|
(148)
|
27
|
Net income
attributed to shareholders
|
$
2,970
|
$
2,084
|
$
783
|
(1) These items are disclosed
under OSFI's Source of Earnings Disclosure (Life Insurance
Companies) guideline.
|
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-GAAP and Other Financial Measures Disclosure in respect
of "specified financial measures" (as defined therein).
Non-GAAP financial measures include core earnings (loss);
pre-tax core earnings; core earnings available to common
shareholders; core general expenses; and assets under management
and administration ("AUMA").
Non-GAAP ratios include core return on common
shareholders' equity ("core ROE"); diluted core earnings per common
share ("core EPS"); expense efficiency ratio; common share core
dividend payout ratio ("dividend payout ratio"); and percentage
growth/decline on a constant exchange rate basis in any of the
above non-GAAP financial measures.
Other specified financial measures include assets under
administration; embedded value; NBV; APE sales; gross flows; net
flows; average assets under management and administration ("average
AUMA"); and percentage growth/decline in such other financial
measures.
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 1Q22 MD&A, which
is incorporated by reference.
Reconciliation of core earnings to net income attributed to
shareholders
|
1Q22
|
($ millions, post-tax
and based on actual foreign exchange
rates in effect in the applicable reporting period, unless
otherwise stated)
|
Asia
|
Canada
|
U.S.
|
Global
WAM
|
Corporate
and Other
|
Total
|
Income (loss) before
income taxes
|
$
681
|
$
880
|
$ 2,577
|
$ 386
|
$
(813)
|
$ 3,711
|
Income tax (expense)
recovery
|
|
|
|
|
|
|
Core earnings
|
(74)
|
(110)
|
(105)
|
(61)
|
26
|
(324)
|
Items excluded from core earnings
|
(11)
|
(115)
|
(405)
|
-
|
46
|
(485)
|
Income tax (expense) recovery
|
(85)
|
(225)
|
(510)
|
(61)
|
72
|
(809)
|
Net income
(post-tax)
|
596
|
655
|
2,067
|
325
|
(741)
|
2,902
|
Less: Net income
(post-tax) attributed to
|
|
|
|
|
|
|
Non-controlling interests
|
20
|
-
|
-
|
1
|
-
|
21
|
Participating policyholders
|
(197)
|
108
|
-
|
-
|
-
|
(89)
|
Net income (loss)
attributed to shareholders (post-tax)
|
773
|
547
|
2,067
|
324
|
(741)
|
2,970
|
Less: Items excluded
from core earnings(1)
|
|
|
|
|
|
|
Investment-related experience outside of
core earnings
|
64
|
53
|
527
|
-
|
(86)
|
558
|
Direct impact of equity markets and interest rates and
variable annuity guarantee
liabilities
|
180
|
180
|
212
|
-
|
(475)
|
97
|
Change in actuarial methods and assumptions
|
-
|
-
|
-
|
-
|
-
|
-
|
Restructuring charge
|
-
|
-
|
-
|
-
|
-
|
-
|
Reinsurance transactions, tax related items and
other
|
(8)
|
-
|
842
|
-
|
(71)
|
763
|
Core earnings
(post-tax)
|
$
537
|
$
314
|
$
486
|
$ 324
|
$
(109)
|
$ 1,552
|
Income tax on core
earnings (see above)
|
74
|
110
|
105
|
61
|
(26)
|
324
|
Core earnings
(pre-tax)
|
$
611
|
$
424
|
$
591
|
$ 385
|
$
(135)
|
$ 1,876
|
(1) These items are disclosed
under OSFI's Source of Earnings Disclosure (Life Insurance
Companies) guideline.
|
Core earnings, CER basis
|
1Q22
|
(Canadian $ millions,
post-tax and based on actual foreign exchange
rates in effect in the applicable reporting period, unless
otherwise stated)
|
Asia
|
Canada
|
U.S.
|
Global
WAM
|
Corporate
and Other
|
Total
|
Core earnings
(post-tax)
|
$
537
|
$
314
|
$
486
|
$ 324
|
$
(109)
|
$ 1,552
|
CER
adjustment(1)
|
-
|
-
|
-
|
-
|
-
|
-
|
Core earnings, CER
basis (post-tax)
|
$
537
|
$
314
|
$
486
|
$ 324
|
$
(109)
|
$ 1,552
|
Income tax on core
earnings, CER basis(2)
|
74
|
110
|
105
|
61
|
(26)
|
324
|
Core earnings, CER
basis (pre-tax)
|
$
611
|
$
424
|
$
591
|
$ 385
|
$
(135)
|
$ 1,876
|
(1) The impact of updating
foreign exchange rates to that which was used in 1Q22.
|
(2) Income tax on core
earnings adjusted to reflect the foreign exchange rates for the
Statement of Income in effect for 1Q22.
|
Reconciliation of core earnings to net income attributed to
shareholders
|
4Q21
|
($ millions, post-tax
and based on actual foreign exchange
rates in effect in the applicable reporting period, unless
otherwise stated)
|
Asia
|
Canada
|
U.S.
|
Global
WAM
|
Corporate
and Other
|
Total
|
Income (loss) before
income taxes
|
$
684
|
$
806
|
$
614
|
$ 438
|
$
(61)
|
$ 2,481
|
Income tax (expense)
recovery
|
|
|
|
|
|
|
Core earnings
|
(68)
|
(101)
|
(117)
|
(52)
|
(8)
|
(346)
|
Items excluded from core earnings
|
(13)
|
(77)
|
(4)
|
-
|
10
|
(84)
|
Income tax (expense) recovery
|
(81)
|
(178)
|
(121)
|
(52)
|
2
|
(430)
|
Net income
(post-tax)
|
603
|
628
|
493
|
386
|
(59)
|
2,051
|
Less: Net income
(post-tax) attributed to
|
|
|
|
|
|
|
Non-controlling interests
|
34
|
-
|
-
|
(1)
|
(1)
|
32
|
Participating policyholders
|
(76)
|
12
|
(1)
|
-
|
-
|
(65)
|
Net income (loss)
attributed to shareholders (post-tax)
|
645
|
616
|
494
|
387
|
(58)
|
2,084
|
Less: Items excluded
from core earnings(1)
|
|
|
|
|
|
|
Investment-related experience outside of
core earnings
|
58
|
90
|
58
|
-
|
(80)
|
126
|
Direct impact of equity markets and interest rates
and variable annuity
guarantee liabilities
|
32
|
240
|
125
|
-
|
1
|
398
|
Change in actuarial methods and assumptions
|
-
|
-
|
-
|
-
|
-
|
-
|
Restructuring charge
|
-
|
-
|
-
|
-
|
-
|
-
|
Reinsurance transactions, tax related items and
other
|
8
|
-
|
(156)
|
-
|
-
|
(148)
|
Core earnings
(post-tax)
|
$
547
|
$
286
|
$
467
|
$ 387
|
$
21
|
$ 1,708
|
Income tax on core
earnings (see above)
|
68
|
101
|
117
|
52
|
8
|
346
|
Core earnings
(pre-tax)
|
$
615
|
$
387
|
$
584
|
$ 439
|
$
29
|
$ 2,054
|
(1) These items are disclosed
under OSFI's Source of Earnings Disclosure (Life Insurance
Companies) guideline.
|
Core earnings, CER basis
|
4Q21
|
(Canadian $ millions,
post-tax and based on actual foreign exchange
rates in effect in the applicable reporting period, unless
otherwise stated)
|
Asia
|
Canada
|
U.S.
|
Global
WAM
|
Corporate
and Other
|
Total
|
Core earnings
(post-tax)
|
$
547
|
$
286
|
$
467
|
$ 387
|
$
21
|
$ 1,708
|
CER
adjustment(1)
|
2
|
-
|
2
|
2
|
-
|
6
|
Core earnings, CER
basis (post-tax)
|
$
549
|
$
286
|
$
469
|
$ 389
|
$
21
|
$ 1,714
|
Income tax on core
earnings, CER basis(2)
|
68
|
101
|
118
|
51
|
8
|
346
|
Core earnings, CER
basis (pre-tax)
|
$
617
|
$
387
|
$
587
|
$ 440
|
$
29
|
$ 2,060
|
(1) The impact of updating
foreign exchange rates to that which was used in 1Q22.
|
(2) Income tax on core
earnings adjusted to reflect the foreign exchange rates for the
Statement of Income in effect for 1Q22.
|
Reconciliation of core earnings to net income attributed to
shareholders
|
1Q21
|
($ millions, post-tax
and based on actual foreign exchange
rates in effect in the applicable reporting period, unless
otherwise stated)
|
Asia
|
Canada
|
U.S.
|
Global
WAM
|
Corporate
and Other
|
Total
|
Income (loss) before
income taxes
|
$ 1,118
|
$
55
|
$
84
|
$ 366
|
$ (751)
|
$
872
|
Income tax (expense)
recovery
|
|
|
|
|
|
|
Core earnings
|
(124)
|
(91)
|
(116)
|
(52)
|
17
|
(366)
|
Items excluded from core earnings
|
(54)
|
108
|
135
|
(1)
|
171
|
359
|
Income tax (expense) recovery
|
(178)
|
17
|
19
|
(53)
|
188
|
(7)
|
Net income
(post-tax)
|
940
|
72
|
103
|
313
|
(563)
|
865
|
Less: Net income
(post-tax) attributed to
|
|
|
|
|
|
|
Non-controlling interests
|
90
|
-
|
-
|
1
|
-
|
91
|
Participating policyholders
|
(107)
|
91
|
7
|
-
|
-
|
(9)
|
Net income (loss)
attributed to shareholders (post-tax)
|
957
|
(19)
|
96
|
312
|
(563)
|
783
|
Less: Items excluded
from core earnings(1)
|
|
|
|
|
|
|
Investment-related experience outside of
core earnings
|
72
|
(65)
|
160
|
-
|
(90)
|
77
|
Direct impact of equity markets and interest rates
and variable annuity
guarantee liabilities
|
288
|
(218)
|
(565)
|
-
|
(340)
|
(835)
|
Change in actuarial methods and assumptions
|
-
|
-
|
-
|
-
|
-
|
-
|
Restructuring charge
|
-
|
-
|
-
|
-
|
(115)
|
(115)
|
Reinsurance transactions, tax related items and
other
|
27
|
-
|
-
|
-
|
-
|
27
|
Core earnings
(post-tax)
|
$
570
|
$
264
|
$
501
|
$ 312
|
$
(18)
|
$ 1,629
|
Income tax on core
earnings (see above)
|
124
|
91
|
116
|
52
|
(17)
|
366
|
Core earnings
(pre-tax)
|
$
694
|
$
355
|
$
617
|
$ 364
|
$
(35)
|
$ 1,995
|
(1) These items are disclosed
under OSFI's Source of Earnings Disclosure (Life Insurance
Companies) guideline.
|
Core earnings, CER basis
|
1Q21
|
(Canadian $ millions,
post-tax and based on actual foreign
exchange rates in effect in the applicable reporting period,
unless otherwise stated)
|
Asia
|
Canada
|
U.S.
|
Global
WAM
|
Corporate
and Other
|
Total
|
Core earnings
(post-tax)
|
$
570
|
$
264
|
$
501
|
$ 312
|
$
(18)
|
$ 1,629
|
CER
adjustment(1)
|
(7)
|
-
|
-
|
-
|
-
|
(7)
|
Core earnings, CER
basis (post-tax)
|
$
563
|
$
264
|
$
501
|
$ 312
|
$
(18)
|
$ 1,622
|
Income tax on core
earnings, CER basis(2)
|
123
|
91
|
116
|
52
|
(17)
|
365
|
Core earnings, CER
basis (pre-tax)
|
$
686
|
$
355
|
$
617
|
$ 364
|
$
(35)
|
$ 1,987
|
(1) The impact of updating
foreign exchange rates to that which was used in 1Q22.
|
(2) Income tax on core
earnings adjusted to reflect the foreign exchange rates for the
Statement of Income in effect for 1Q22.
|
Core earnings available to common shareholders
|
Quarterly
Results
|
Full Year
Results
|
($ millions, and based
on actual foreign exchange
rates in effect in the applicable reporting period, unless
otherwise stated)
|
1Q22
|
4Q21
|
3Q21
|
2Q21
|
1Q21
|
2021
|
Core
earnings
|
$ 1,552
|
$ 1,708
|
$ 1,517
|
$ 1,682
|
$ 1,629
|
$ 6,536
|
Less: Preferred share
dividends
|
(52)
|
(71)
|
(37)
|
(64)
|
(43)
|
(215)
|
Core earnings
available to common shareholders
|
1,500
|
1,637
|
1,480
|
1,618
|
1,586
|
6,321
|
CER
adjustment(1)
|
-
|
6
|
-
|
35
|
(7)
|
34
|
Core earnings
available to common shareholders, CER basis
|
$ 1,500
|
$ 1,643
|
$ 1,480
|
$ 1,653
|
$ 1,579
|
$ 6,355
|
(1) The impact of updating
foreign exchange rates to that which was used in 1Q22.
|
Core ROE
|
Quarterly
Results
|
Full Year
Results
|
($ millions, unless
otherwise stated)
|
1Q22
|
4Q21
|
3Q21
|
2Q21
|
1Q21
|
2021
|
Core earnings available
to common shareholders
|
$ 1,500
|
$ 1,637
|
$ 1,480
|
$ 1,618
|
$ 1,586
|
$ 6,321
|
Annualized core
earnings available to common shareholders
|
$ 6,085
|
$ 6,483
|
$ 5,874
|
$ 6,485
|
$ 6,435
|
$ 6,321
|
Average common
shareholders' equity (see below)
|
$
51,407
|
$
51,049
|
$
49,075
|
$
46,757
|
$
46,974
|
$
48,463
|
Core ROE
(annualized) (%)
|
11.8%
|
12.7%
|
12.0%
|
13.9%
|
13.7%
|
13.0%
|
Average common
shareholders' equity
|
|
|
|
|
|
|
Total shareholders' and
other equity
|
$
56,457
|
$
58,408
|
$
55,457
|
$
53,466
|
$
51,238
|
$
58,408
|
Less: Preferred shares
and other equity
|
(5,670)
|
(6,381)
|
(5,387)
|
(5,387)
|
(5,804)
|
(6,381)
|
Common shareholders'
equity
|
$
50,787
|
$
52,027
|
$
50,070
|
$
48,079
|
$
45,434
|
$
52,027
|
Average common
shareholders' equity
|
$
51,407
|
$
51,049
|
$
49,075
|
$
46,757
|
$
46,974
|
$
48,463
|
Core EPS
|
Quarterly
Results
|
Full Year
Results
|
($ millions, and based
on actual foreign exchange rates
in effect in the applicable reporting period, unless otherwise
stated)
|
1Q22
|
4Q21
|
3Q21
|
2Q21
|
1Q21
|
2021
|
Core
EPS
|
|
|
|
|
|
|
Core earnings available
to common shareholders
|
$ 1,500
|
$ 1,637
|
$ 1,480
|
$
1,618
|
$ 1,586
|
$ 6,321
|
Diluted weighted
average common shares outstanding (millions)
|
1,942
|
1,946
|
1,946
|
1,946
|
1,945
|
1,946
|
Core earnings per
share
|
$
0.77
|
$ 0.84
|
$
0.76
|
$
0.83
|
$ 0.82
|
$ 3.25
|
Core EPS, CER
basis
|
|
|
|
|
|
|
Core earnings available
to common shareholders, CER basis
|
$ 1,500
|
$ 1,643
|
$ 1,480
|
$
1,653
|
$ 1,579
|
$ 6,355
|
Diluted weighted
average common shares outstanding (millions)
|
1,942
|
1,946
|
1,946
|
1,946
|
1,945
|
1,946
|
Core earnings per
share, CER basis
|
$
0.77
|
$ 0.84
|
$
0.76
|
$
0.85
|
$ 0.81
|
$ 3.27
|
Common share core dividend payout ratio
|
Quarterly
Results
|
Full Year
Results
|
|
1Q22
|
4Q21
|
3Q21
|
2Q21
|
1Q21
|
2021
|
Per share
dividend
|
$
0.33
|
$ 0.33
|
$ 0.28
|
$ 0.28
|
$ 0.28
|
$ 1.17
|
Core EPS
|
$
0.77
|
$ 0.84
|
$ 0.76
|
$ 0.83
|
$ 0.82
|
$ 3.25
|
Common share core
dividend payout ratio
|
43%
|
39%
|
37%
|
34%
|
34%
|
36%
|
Global WAM AUMA reconciliation
As at
|
|
|
|
|
|
($ millions, and based
on actual foreign exchange rates in
effect in the applicable reporting period, unless otherwise
stated)
|
Mar
31,
2022
|
Dec 31,
2021
|
Sept 30,
2021
|
Jun 30,
2021
|
Mar 31,
2021
|
Total invested
assets
|
$
409,401
|
$
427,098
|
$
419,087
|
$
405,209
|
$
397,948
|
Less: Non Global WAM
total invested assets
|
405,933
|
422,640
|
414,754
|
400,998
|
393,623
|
Total Invested
Assets – Global WAM
|
3,468
|
4,458
|
4,333
|
4,211
|
4,325
|
Total segregated funds
net assets
|
$
371,928
|
$
399,788
|
$
387,799
|
$
383,845
|
$
371,682
|
Less: Non Global WAM
total segregated funds net assets
|
135,314
|
147,221
|
143,248
|
141,227
|
137,220
|
Total Invested
Assets – Global WAM
|
236,614
|
252,567
|
244,551
|
242,618
|
234,462
|
Global WAM total
invested assets and net segregated funds assets
|
$
240,082
|
$
257,025
|
$
248,884
|
$
246,829
|
$
238,787
|
Global WAM
AUMA
|
|
|
|
|
|
Total Invested
Assets
|
$
3,468
|
$
4,458
|
$
4,333
|
$
4,211
|
$
4,325
|
Segregated funds net
assets
|
|
|
|
|
|
Segregated funds net assets - Institutional
|
4,338
|
4,470
|
4,400
|
4,229
|
4,157
|
Segregated funds net assets - Other
|
232,276
|
248,097
|
240,151
|
238,389
|
230,305
|
Total
|
236,614
|
252,567
|
244,551
|
242,618
|
234,462
|
Mutual funds
|
274,665
|
290,863
|
277,421
|
265,110
|
249,137
|
Institutional asset
management(1)
|
101,105
|
106,407
|
103,732
|
99,983
|
96,989
|
Other funds
|
13,269
|
14,001
|
12,562
|
12,232
|
11,611
|
Total Global WAM
AUM
|
629,121
|
668,296
|
642,599
|
624,154
|
596,524
|
Assets under
administration
|
178,843
|
187,631
|
181,013
|
174,376
|
167,558
|
Total Global WAM
AUMA
|
$
807,964
|
$
855,927
|
$
823,612
|
$
798,530
|
$
764,082
|
|
|
|
|
|
|
Total Global WAM
AUMA
|
$
807,964
|
$
855,927
|
$
823,612
|
$
798,530
|
$
764,082
|
CER
adjustment(2)
|
-
|
(9,998)
|
(12,761)
|
3,168
|
(4,685)
|
Total Global WAM
AUMA, CER basis
|
$
807,964
|
$
845,929
|
$
810,851
|
$
801,698
|
$
759,397
|
(1) Institutional asset
management excludes Institutional segregated funds net
assets.
|
(2) The impact of updating
foreign exchange rates to that which was used in 1Q22.
|
Expense efficiency ratio
|
Quarterly
Results
|
Full Year
Results
|
($ millions, and based
on actual foreign exchange rates
in effect in the
applicable reporting period, unless
otherwise
stated)
|
1Q22
|
4Q21
|
3Q21
|
2Q21
|
1Q21
|
2021
|
Expense Efficiency
Ratio
|
|
|
|
|
|
|
Core general
expenses
|
$ 1,877
|
$ 1,973
|
$ 1,904
|
$ 1,794
|
$ 1,882
|
$ 7,553
|
Core earnings
(pre-tax)
|
1,876
|
2,054
|
1,811
|
2,036
|
1,995
|
7,896
|
Total - Core earnings
(pre-tax) and Core general expenses
|
$ 3,753
|
$ 4,027
|
$ 3,715
|
$ 3,830
|
$ 3,877
|
$
15,449
|
Expense Efficiency
Ratio
|
50.0%
|
49.0%
|
51.3%
|
46.8%
|
48.5%
|
48.9%
|
Core general
expenses
|
|
|
|
|
|
|
General expenses -
Financial Statements
|
$ 1,898
|
$ 2,000
|
$ 1,904
|
$ 1,892
|
$ 2,032
|
$ 7,828
|
Less: General expenses
included in items excluded from core earnings
|
|
|
|
|
|
|
Restructuring charge
|
-
|
-
|
-
|
-
|
150
|
150
|
Integration and acquisition
|
8
|
-
|
-
|
-
|
-
|
-
|
Legal provisions and Other expenses
|
13
|
27
|
-
|
98
|
-
|
125
|
Total
|
$
21
|
$
27
|
$
-
|
$
98
|
$
150
|
$
275
|
Core general
expenses
|
$ 1,877
|
$ 1,973
|
$ 1,904
|
$ 1,794
|
$ 1,882
|
$ 7,553
|
Core general
expenses
|
$ 1,877
|
$ 1,973
|
$ 1,904
|
$ 1,794
|
$ 1,882
|
$ 7,553
|
CER
adjustment(1)
|
-
|
4
|
1
|
27
|
(14)
|
18
|
Core general
expenses, CER basis
|
$ 1,877
|
$ 1,977
|
$ 1,905
|
$ 1,821
|
$ 1,868
|
$ 7,571
|
|
|
|
|
|
|
|
|
(1) The impact of updating
foreign exchange rates to that which was used in 1Q22.
|
CAUTION REGARDING FORWARD-LOOKING STATEMENTS:
From time to time, Manulife makes written and/or oral
forward-looking statements, including in this document. In
addition, our representatives may make forward-looking statements
orally to analysts, investors, the media and others. All such
statements are made pursuant to the "safe harbour" provisions of
Canadian provincial securities laws and the U.S. Private Securities
Litigation Reform Act of 1995.
The forward-looking statements in this document include, but are
not limited to, statements with respect to possible share buybacks
under our NCIB, the impact of IFRS 17 and the Company's earnings
presentation and reporting under the new accounting standard and
our medium-term financial and operating targets under IFRS 17,
including our core ROE target, dividend payout ratio target and new
CSM targets, and also relate to, among other things, our
objectives, goals, strategies, intentions, plans, beliefs,
expectations and estimates, and can generally be identified by the
use of words such as "may", "will", "could", "should", "would",
"likely", "expect", "estimate", "believe", "plan", "objective",
"aim", "continue", and "goal" (or the negative thereof) and words
and expressions of similar import, and include statements
concerning possible or assumed future results. Although we believe
that the expectations reflected in such forward-looking statements
are reasonable, such statements involve risks and uncertainties,
and undue reliance should not be placed on such statements and they
should not be interpreted as confirming market or analysts'
expectations in any way.
Certain material factors or assumptions are applied in making
forward-looking statements and actual results may differ materially
from those expressed or implied in such statements.
Important factors that could cause actual results to differ
materially from expectations include but are not limited to:
general business and economic conditions (including but not limited
to the performance, volatility and correlation of equity markets,
interest rates, credit and swap spreads, currency rates, investment
losses and defaults, market liquidity and creditworthiness of
guarantors, reinsurers and counterparties); the ongoing prevalence
of COVID-19, including any variants, as well as actions that have
been, or may be taken by governmental authorities in response to
COVID-19, including the impacts of any variants; changes in laws
and regulations; changes in accounting standards applicable in any
of the territories in which we operate; changes in regulatory
capital requirements; our ability to execute strategic plans and
changes to strategic plans; downgrades in our financial strength or
credit ratings; our ability to maintain our reputation; impairments
of goodwill or intangible assets or the establishment of provisions
against future tax assets; the accuracy of estimates relating to
morbidity, mortality and policyholder behaviour; the accuracy of
other estimates used in applying accounting policies, actuarial
methods and embedded value methods; our ability to implement
effective hedging strategies and unforeseen consequences arising
from such strategies; our ability to source appropriate assets to
back our long-dated liabilities; level of competition and
consolidation; our ability to market and distribute products
through current and future distribution channels; unforeseen
liabilities or asset impairments arising from acquisitions and
dispositions of businesses; the realization of losses arising from
the sale of investments classified as available-for-sale; our
liquidity, including the availability of financing to satisfy
existing financial liabilities on expected maturity dates when
required; obligations to pledge additional collateral; the
availability of letters of credit to provide capital management
flexibility; accuracy of information received from counterparties
and the ability of counterparties to meet their obligations; the
availability, affordability and adequacy of reinsurance; legal and
regulatory proceedings, including tax audits, tax litigation or
similar proceedings; our ability to adapt products and services to
the changing market; our ability to attract and retain key
executives, employees and agents; the appropriate use and
interpretation of complex models or deficiencies in models used;
political, legal, operational and other risks associated with our
non-North American operations; acquisitions and our ability to
complete acquisitions including the availability of equity and debt
financing for this purpose; the disruption of or changes to key
elements of the Company's or public infrastructure systems;
environmental concerns; our ability to protect our intellectual
property and exposure to claims of infringement; and our inability
to withdraw cash from subsidiaries.
Additional information about material risk factors that could
cause actual results to differ materially from expectations and
about material factors or assumptions applied in making
forward-looking statements may be found "Risk Management and Risk
Factors" and "Critical Actuarial and Accounting Policies" in the
Management's Discussion and Analysis in our most recent annual
report, under "Risk Management and Risk Factors Update" and
"Critical Actuarial and Accounting Policies" in the Management's
Discussion and Analysis in our most recent interim report, in the
"Risk Management" note to the consolidated financial statements in
our most recent annual and interim reports as well as elsewhere in
our filings with Canadian and U.S. securities regulators.
The forward-looking statements in this document are, unless
otherwise indicated, stated as of the date hereof and are presented
for the purpose of assisting investors and others in understanding
our financial position and results of operations, our future
operations, as well as our objectives and strategic priorities, and
may not be appropriate for other purposes. We do not undertake to
update any forward-looking statements, except as required by
law.
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SOURCE Manulife Financial Corporation