September 17, 2009 / 4:25 PM / 9 years ago

UPDATE 1-Manulife CEO looks to improve asset allocation

* Open to attractive acquisitions in Canada, U.S.

* Will look to organic growth opportunities in Asia

* Says dividend cut was right thing to do

TORONTO, Sept 17 (Reuters) - Manulife Financial (MFC.TO), still recovering from exposure to stock markets hit by the global economic crisis, plans to improve the way it allocates capital around the world, its chief executive said.

Donald Guloien, who took the Manulife helm this year, told a conference hosted by Scotia Capital in Toronto that company money was best served by investing in strategic opportunities.

He said Manulife would be open to attractively priced acquisitions in Canada and the United States, and would look to organic growth opportunities in Asian markets.

“So why would you pay it out in dividends?” he said.

Manulife, Canada’s biggest life insurer and the world’s fourth-largest, surprised investors in August by halving its quarterly dividend — the only Canadian financial services company to cut its payout during the financial crisis.

Guloien said the dividend cut was not caused by a big problem, and said he hoped to raise it again once the situation normalizes.

Guloien, who became president of the company in May, said the world was not yet free from the economic malaise sparked by the sub-prime credit crisis in the United States, but said the economic environment would yield acquisition opportunities.

Those would probably be small to medium-sized, and not the blockbuster deals seen before the global crisis.

He said Manulife had no plans to diversify outside of its skillset.

He also said Manulife would absorb the impact of its variable annuity guarantees “over time”.

Manulife reported a stronger-than-expected quarterly profit in August as global stock markets recovered, boosting income.

$1=$1.06 Canadian Reporting by Andrea Hopkins; additional reporting by Pav Jordan; editing by Rob Wilson

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