TORONTO (Reuters) - Manulife Financial Corp (MFC.TO) reported a higher adjusted quarterly profit that was in line with market expectations on Thursday, boosted by growth in its wealth management and life insurance operations.
Core profit at its wealth and asset management business climbed 20 percent in the second quarter, while earnings at its insurance division rose 22 percent. The company says core profit is a measure of underlying earnings capacity that excludes the impact of short-term factors such as fluctuations in interest rates.
Canada’s largest insurer said assets under management and administration rose to C$883 billion ($670.87 billion), up 39 percent, as it was helped by the acquisition of New York Life’s retirement plan services.
Manulife, which has a presence in Canada, the United States and Asia, recorded double-digit earnings growth in its Asian and Canadian operations.
The company has been expanding in Asia, where core earnings rose 30 percent to C$300 million, making up about a third of its total profit. Growth was supported in particular by sales in Japan, Hong Kong and Singapore.
“Asia’s been a substantial part of our earnings for some time, but we have gotten momentum over the last several quarters into our core earnings,” Chief Financial Officer Steve Roder said in an interview.
A sales push launched a few years ago and a move to increase regional diversification within the continent are starting to reflect on the bottom line, he said.
The company is also on track to meet its earnings target for 2016, Roder added. Manulife has previously said that it expects to record more than C$4 billion in core earnings in 2016.
The Toronto-based company earned C$600 million, or 29 Canadian cents a share, in the second quarter, compared with C$943 million, or 49 Canadian cents a share, a year earlier.
Beyond the impact of a steeper yield curve in several markets on net income, the company was also hurt by acquisition-related charges, which involved C$54 million in integration costs involving recent deals.
Core profit climbed to 44 Canadian cents per share, from 36 cents a share a year ago.
Analysts, on average, had expected earnings of 45 Canadian cents a share, according to Thomson Reuters I/B/E/S.
Manulife shares were up 0.3 percent at C$23.36.
Editing by Jason Neely and Meredith Mazzilli