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Manulife Financial Corporation MFC delivered first-quarter 2025 core earnings of 69 cents per share, which missed the Zacks Consensus Estimate by 1.4%. The bottom line decreased 1.4% year over year. Core earnings of $1.2 billion (C$1.8 billion) declined 7.6% year over year. Core earnings decreased modestly, as continued business growth in Global WAM and Asia was offset by strengthened provisions related to expected credit loss of $45 million post-tax in the first quarter of 2025, and a provision for the California wildfires of $43 million post-tax in the first quarter of 2025.
New business value (NBV) in the reported quarter was $631.6 million (C$907 million), up 29.4% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Annualized premium equivalent (APE) sales increased 28.5% year over year to $1.8 billion (C$2.7 billion).
New business contractual service margin (CSM) increased 31.4% year over year to $631 million (C$907 million)
The Global Wealth and Asset Management business generated net inflows of $0.3 billion (C$0.5 billion), which plunged 93.8% year over year.
Core return on equity, measuring the company’s profitability, contracted 60 basis points year over year to 15.6%.
The Life Insurance Capital Adequacy Test ratio was 137% as of March 31, 2025.
Manulife Financial Corp Price, Consensus and EPS Surprise
Manulife Financial Corp price-consensus-eps-surprise-chart | Manulife Financial Corp Quote
Segmental Performance of MFC
Global Wealth and Asset Management division’s core earnings were $316 million (C$454 million), up 21.5% year over year. Retirement net outflows of $1.8 billion (C$2.6 billion) declined 21.7% year over year, reflecting higher retirement plan redemptions and higher net member withdrawals in North America. Retail net inflows of $0.3 billion (C$0.5 billion) declined 75% year over year, reflecting higher redemptions due to lower investor demand amid market volatility. This was partially offset by higher money market fund sales and new fund launches in mainland China, as well as higher net sales through the retail wealth platform in Canada. Institutional Asset Management net inflows of $1.8 billion (C$2.6 billion) increased 38.4%, driven by lower redemptions in fixed income mandates.
Asia division’s core earnings totaled $492 million, up 7% year over year, reflecting continued business growth, improved impact of new business, and favorable claims experience, partially offset by strengthened ECL provisions.
Asia reported record levels of APE sales, new business CSM and NBV, with year-over-year growth of 50%, 38% and 43%, respectively, reflecting higher sales volumes in Hong Kong, Asia Other and Japan.
Manulife Financial’s Canada division’s core earnings of $260 million (C$374 million) declined 1.8% year over year.
APE sales increased 9% year over year, bolstered by higher sales volumes across all business lines. NBV grew 15% year over year. New business CSM also increased 30% year over year, driven by higher sales volumes in Individual Insurance and segregated fund products.
The U.S. division reported core earnings of $251 million, down 25% year over year. The decrease reflects lower investment spreads, strengthened ECL provisions, and the net unfavorable impact of the annual review of actuarial methods and assumptions in 2024.
New business CSM decreased 3%, primarily driven by product mix, partially offset by higher sales volumes.
APE sales and NBV increased 6% and 30%, respectively, reflecting continued demand from affluent customers for accumulation insurance products.