news release q1 2023
News
Release
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TSX/NYSE/PSE: MFC |
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This earnings news release for
Manulife adopted IFRS 17 "Insurance Contracts" and IFRS 9 "Financial Instruments" effective for years beginning on
The comparative restated 2022 results in this news release may not be fully representative of our market risk profile, as the transition of our general fund portfolio for asset-liability matching purposes under IFRS 17 and IFRS 9 was not completed until early 2023. Consequently, year-over-year variations between our 2023 results compared to the restated 2022 results should be viewed in this context.
In addition, our restated 2022 results are also not directly comparable to 2023 results because IFRS 9 hedge accounting and expected credit loss ("ECL") principles are applied prospectively effective
Manulife reports 1Q23 net income attributed to shareholders of
Today, Manulife announced its first quarter of 2023 ("1Q23") results. This marks the first quarter of reporting under IFRS 17 and IFRS 9 and the transition impacts on our results are consistent with the guidance that we provided previously. Key highlights of 1Q23 include:
- Net income attributed to shareholders of
$1.4 billion in 1Q23, up$0.1 billion compared with transitional net income attributed to shareholders1 for the first quarter of 2022 ("1Q22"), and up$2.6 billion compared with 1Q22 net income attributed to shareholders - Core earnings1 of
$1.5 billion in 1Q23, up 6% on a constant exchange rate basis2 from 1Q22 - Core EPS3 of
$0.79 in 1Q23, up 11%2 compared with 1Q22, and diluted earnings per common share ("EPS") of$0.73 in 1Q23, up 4% compared with transitional EPS3 of$0.66 in 1Q22, and up$1.39 compared with EPS of -$0.66 in 1Q22 - Core ROE3 of 14.8% and ROE of 13.6% in 1Q23
- APE sales4 of
$1.6 billion in 1Q23, down 3%4 from 1Q22 - NBV4 of
$509 million in 1Q23, down 5% from 1Q22 - New business contractual service margin ("CSM")5 of
$442 million in 1Q23, down 13%2 from 1Q22 - CSM balance net of NCI of
$17.5 billion and post-tax CSM net of NCI1 of$14.9 billion as atMarch 31, 2023
- Transitional net income attributed to shareholders, core earnings and post-tax CSM net of NCI ("post-tax CSM") 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 1Q23 MD&A.
- Percentage growth / declines in core earnings, core EPS and new business CSM net of NCI stated on a constant exchange rate basis are non-GAAP ratios.
- Diluted core earnings per common share ("Core EPS"), transitional EPS and core retuon common shareholders' equity ("Core ROE") are non-GAAP ratios.
- For more information on new business value ("NBV") and annualized premium equivalent ("APE") sales, see "Non-GAAP and other financial measures" below. In this news release, percentage growth / declines in NBV and APE sales are stated on a constant exchange rate basis.
- New business contractual service margin is net of non-controlling interests ("NCI").
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- Global Wealth and Asset Management ("Global WAM") net inflows1 of
$4.4 billion in 1Q23, compared with net inflows of$6.8 billion in 1Q22 - LICAT ratio2 of 138%
- Purchased for cancellation 0.8% of common shares outstanding, or approximately 15.6 million common shares, for
$0.4 billion in 1Q233 - Adjusted book value per common share4 of
$30.04 as ofMarch 31, 2023 , an increase of$2.51 fromMarch 31, 2022 , and book value per common share of$22.01 as atMarch 31, 2023 , an increase of$1.90 fromMarch 31, 2022 - Embedded value1 of
$63.9 billion or$34.29 per common share, as ofDecember 31, 2022 , compared with$64.8 billion or$33.35 per common share as ofDecember 31, 2021
"We reported strong operating results in the first quarter of 2023 despite continued market volatility, delivering core earnings of
"As we report our first quarter of financial results under IFRS 17 and IFRS 9, I am pleased to confirm that the transition impacts are consistent with the guidance we provided previously," said
"Our financial strength, robust risk management and diversified business portfolio continue to drive the performance for our global franchise," added
BUSINESS HIGHLIGHTS:
In
- For more information on net flows and embedded value, see "Non-GAAP and other financial measures" below.
- Life Insurance Capital Adequacy Test ("LICAT") ratio of The
Manufacturers Life Insurance Company ("MLI"). LICAT ratio is disclosed under the Office of the Superintendentof Financial Institutions Canada's ("OSFI's") Life Insurance Capital Adequacy Test Public Disclosure Requirements guideline. - 8.7 million shares were repurchased under the current Normal Course Issuer Bid ("NCIB") commenced on
February 23, 2023 , and 6.9 million shares were repurchased under the previous NCIB that expired onFebruary 2, 2023 . - Adjusted book value per common share is a non-GAAP ratio.
- See "Caution regarding forward-looking statements" below.
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expanded access comes after a successful initial pilot when we became the first life insurance carrier to make the test available in
In addition, we continued to make progress on our digital journey in 1Q23. In
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FINANCIAL HIGHLIGHTS:
Quarterly Results |
||||
1Q22 |
||||
($ millions, unless otherwise stated) |
1Q23 |
Transitional |
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Profitability: |
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Net income (loss) attributed to shareholders(1) |
$ |
1,406 |
$ |
1,325 |
Retuon common shareholders' equity ("ROE")(1) |
13.6% |
13.3% |
||
Diluted earnings (loss) per common share ($)(1) |
$ |
0.73 |
$ |
0.66 |
Quarterly Results |
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($ millions, unless otherwise stated) |
1Q23 |
1Q22 |
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Profitability: |
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Net income (loss) attributed to shareholders |
$ |
1,406 |
$ |
(1,220) |
Core earnings |
$ |
1,531 |
$ |
1,393 |
Diluted earnings per common share ("EPS") ($) |
$ |
0.73 |
$ |
(0.66) |
Diluted core earnings per common share ("Core EPS") ($)(3) |
$ |
0.79 |
$ |
0.69 |
Retuon common shareholders' equity ("ROE") |
13.6% |
(13.3)% |
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Core ROE |
14.8% |
14.0% |
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Expense efficiency ratio(3) |
47.1% |
46.4% |
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Expenditure efficiency ratio(3) |
54.0% |
53.4% |
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General expenses |
$ |
1,086 |
$ |
931 |
Core expenses(2) |
$ |
1,605 |
$ |
1,416 |
Core expenditures(2) |
$ |
2,112 |
$ |
1,872 |
Business performance: |
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Asia APE sales |
$ |
1,173 |
$ |
1,087 |
Canada APE sales |
$ |
293 |
$ |
363 |
|
$ |
134 |
$ |
160 |
Total APE sales |
$ |
1,600 |
$ |
1,610 |
|
$ |
372 |
$ |
369 |
|
$ |
92 |
$ |
104 |
|
$ |
45 |
$ |
41 |
Total new business value |
$ |
509 |
$ |
514 |
|
$ |
301 |
$ |
317 |
|
$ |
46 |
$ |
61 |
|
$ |
95 |
$ |
112 |
Total new business CSM |
$ |
442 |
$ |
490 |
Asia CSM net of NCI |
$ |
9,678 |
$ |
9,045 |
Canada CSM |
$ |
3,659 |
$ |
3,903 |
|
$ |
4,080 |
$ |
3,892 |
Corporate and Other CSM |
$ |
50 |
$ |
27 |
Total CSM net of NCI |
$ |
17,467 |
$ |
16,867 |
Post-tax CSM net of NCI(2) |
$ |
14,850 |
$ |
14,320 |
Global WAM net flows ($ billions) |
$ |
4.4 |
$ |
6.8 |
Global WAM gross flows ($ billions)(4) |
$ |
38.8 |
$ |
38.4 |
Global WAM assets under management and administration ($ billions)(2) |
$ |
814.5 |
$ |
810.2 |
Global WAM total invested assets ($ billions) |
$ |
5.6 |
$ |
5.8 |
Global WAM net segregated funds net assets ($ billions) |
$ |
235.6 |
$ |
236.6 |
Financial strength: |
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MLI's LICAT ratio |
138% |
140% |
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Financial leverage ratio(3) |
26.0% |
24.9% |
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Book value per common share ($) |
$ |
22.01 |
$ |
20.11 |
Adjusted book value per common share ($)(3) |
$ |
30.04 |
$ |
27.53 |
- 2022 results for transitional net income attributed to shareholders, transitional EPS and transitional ROE, a non-GAAP ratio, are adjusted to include IFRS 9 hedge accounting and expected credit loss principles ("IFRS 9 transitional impacts"). See 1Q23 MD&A for more information. For 2023, there are no IFRS 9 transitional adjustments as ECL and hedge accounting is effective
January 1, 2023 and therefore the impact is included in net income attributed to shareholders. - This item is a non-GAAP financial measure. See "Non-GAAP and other financial measures" below and in our 1Q23 MD&A for additional information.
- This item is a non-GAAP ratio.
- For more information on gross flows, see "Non-GAAP and other financial measures" below and in our 1Q23 MD&A.
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PROFITABILITY:
Reported net income attributed to shareholders of
Net income attributed to shareholders in 1Q23 was in line with 1Q22 transitional net income attributed to shareholders, reflecting higher core earnings largely offset by charges from market experience (compared with a small gain in the prior year on a transitional basis). The net charge from market experience in 1Q23 was primarily driven by lower-than-expected returns (including fair value changes) on alternative long duration assets ("ALDA") related to real estate and private equity, and a net realized loss from the sale of fixed income assets which are classified as fair value through other comprehensive income ("FVOCI"), partially offset by higher-than-expected returns on public equity, favourable foreign exchange impacts and a modest net gain from derivatives and hedge ineffectiveness. Net income attributed to shareholders in 1Q23 increased by
Delivered core earnings of
The increase in core earnings compared with 1Q22 was driven by the non-recurrence of excess mortality claims related to COVID-19 in 1Q22 in the
BUSINESS PERFORMANCE:
Annualized premium equivalent ("APE") sales of
In
New business value ("NBV") of
In
- Variable fee approach ("VFA").
- Asia Other excludes
Hong Kong andJapan . - Effective
January 1, 2023 , international high net worth business was reclassified from theU.S. segment to theAsia segment. Prior period comparative information has been restated to reflect the change in segment reporting.
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Attachments
Disclaimer
Manulife reports 1Q23 net income attributed to shareholders of $1.4 billion, core earnings of $1.5 billion, strong core EPS growth and core ROE, and Global Wealth and Asset Management net inflows of $4.4 billion
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