TORONTO (Reuters) - Sun Life Financial (SLF.TO) is reluctant to undertake large acquisitions while its shares linger at rock-bottom prices, the Canadian insurer’s chief executive said on Thursday.
However, the company still seeks to grow, particularly in Asia, CEO Dean Connor said at Bank of Nova Scotia’s (BNS.TO) Global Banking and Markets Financials Summit in Toronto.
“(Acquisitions) are difficult to do when your stock is trading around book value, so to the extent we look at them, they would tend to be on the smaller side,” he said.
Sun Life’s shares are down nearly 60 percent from their record high, which was set in 2007 before the financial crisis hit. The stock is currently trading at just above book value, or the value of the company based on its balance sheet.
Since the crisis, Sun Life’s profit has been hurt by stock market volatility and falling bond yields, which have triggered losses on investment products and forced it to take reserves to ensure it can pay future policy obligations.
Indeed, Sun Life said last month its second quarter profit fell 87.6 percent from the year-before quarter to a slim C$51 million ($51.9 million) due to weak markets.
The company has a large presence in Canada and the United States and has pledged to expand its relatively small exposure to Asia.
It has been linked to Asian assets being sold by hard-hit European companies, including ING Groep’s ING.AS Asian insurance holdings.
Connor did not address those assets directly, but left the door open to the prospect of acquisitions.
“They would tend to be bolt-ons and they would tend to be areas that would round out a particular capability in a market. Asia would be obviously an area of interest,” he said.
Reporting By Cameron French; Editing by Peter Galloway