* Able to fund acquisitions if opportunities arise
* Says has no plans to raise equity
* Hopes worst is over, but no guarantees
By Andrea Hopkins
TORONTO, Aug 6 (Reuters) - The head of Canada's largest insurance company said on Thursday that acquisitions remain very realistic even though the company cut its dividend in a bid to build "fortress levels" of capital.
Manulife Financial Corp (MFC.TO) Chief Executive Donald Guloien said the giant lifeco was only being prudent when it surprised investors on Thursday by cutting its dividend in half, noting the move will shore up its balance sheet and allow the company to weather future headwinds.
Guloien said that while there were no guarantees the worst was over for the insurer, he believed Manulife would be able to fund acquisitions and organic growth if opportunities arise.
"Acquisitions are very realistic. I think the equity markets, investors in Manulife, have indicated they would be very prepared to provide equity for opportunistic acquisitions, primarily because they know we're brilliant at executing those acquisitions," Guloien said in an interview with Reuters.
The head of Manulife, who took over from his aggressive predecessor Dominic D'Alessandro in May, said Manulife is trying to build an impregnable level of capital to guard against having to raise equity in adverse circumstances and protect the company from future market downturns.
"If markets turn out to be more benign than that we'll end up with excess capital, some of which could be deployed to fund a strategic initiative and some of it would be deployed in organic growth," he said.
Manulife's shares dropped nearly 15 percent on Thursday in Toronto after the insurer reported second-quarter profits and the dividend decrease.
But Guloien said he believes Manulife is not the only Canadian company looking at its dividend level.
"Dividends have gradually crept up to fairly high payout ratios across a range of companies and I think we're not alone in considering whether that is the right thing to do," he said. (Reporting by Andrea Hopkins; editing by Rob Wilson)