UPDATE 4-Manulife mulls buybacks after disappointing quarter

Thu Aug 4, 2016 4:07pm EDT
 
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* Q2 EPS 40 Canadian cents vs 46 cents average view

* CEO says board considering share buybacks

* Shares down 5.4 percent (Recasts, adds CEO comments from conference call)

By Matt Scuffham

TORONTO, Aug 4 (Reuters) - Manulife Financial Corp, Canada's biggest life insurer, said it could buy back shares after reporting lower-than-expected quarterly earnings and warning of a future C$500 million ($380 million) charge.

Manulife blamed its disappointing second-quarter earnings on a sharp decline in interest rates as well as market volatility that Chief Financial Officer Steve Roder said was due in part to Britain's vote to leave the European Union.

"It was a very volatile quarter," Roder said in an interview on Thursday. "We hope it's not representative of the year as a whole, and we're heavily focused on improving in the second half."

Manulife shares ended down 5.4 percent, or 97 Canadian cents, at C$16.95 in trading in Toronto. The shares have fallen by 18 percent since the start of the year and Manulife is currently trading at 0.87 times the value of its assets, well below that of rivals, according to Thomson Reuters I/B/E/S.

Chief Executive Donald Guloien said the company was considering buying back shares given its low valuation.   Continued...