MANULIFE(HK:00945)2024-05-08 23:28Core Earnings and Net Income - Core earnings for Q1 2024 were CAD 1.8 billion, a 16% increase year-over-year at constant exchange rates[2] - Net income attributed to shareholders was CAD 900 million, a decrease of CAD 500 million compared to Q1 2023, but adjusted for the Global Atlantic reinsurance transaction, it was CAD 1.6 billion, an increase of CAD 200 million[2] - Core earnings per share (EPS) increased by 20% to CAD 0.94, while EPS decreased by 38% to CAD 0.45, but adjusted for the Global Atlantic transaction, EPS rose by 21% to CAD 0.87[3] - Shareholders' core return on equity (ROE) was 16.7%, while ROE was 8.0%, but adjusted for the Global Atlantic transaction, ROE was 15.5%[3] - Manulife's core earnings for Q1 2024 reached CAD 1.8 billion, a 16% increase compared to Q1 2023[11] - Core earnings for Q1 2024 totaled CAD 1.754 billion, compared to CAD 1.773 billion in Q4 2023 and CAD 1.531 billion in Q1 2023[19] - Core earnings (after tax) for the overall company in Q2 2023 were $1,754 million, with Asia contributing $657 million, Canada $364 million, the US $452 million, and Global Wealth & Asset Management $357 million[22] - Core earnings (before tax) at a fixed exchange rate for the overall company were $2,040 million, with Asia at $724 million, Canada $455 million, the US $555 million, and Global Wealth & Asset Management $415 million[23] - Core earnings after tax for the overall company reached $1.773 billion, with Asia contributing $564 million, Canada $352 million, and the US $474 million[24] - Core earnings before tax for the overall company were $2.067 billion, with Asia contributing $640 million, Canada $439 million, and the US $587 million[24] - Core earnings after tax on a constant currency basis were $1.759 billion, with Asia contributing $557 million, Canada $352 million, and the US $470 million[25] - Core earnings before tax on a constant currency basis were $2.051 billion, with Asia contributing $633 million, Canada $439 million, and the US $582 million[25] - Core earnings after tax for the overall company in Q1 2023 were $1.531 billion, with Asia contributing $489 million, Canada $353 million, and the US $385 million[26] - Core earnings before tax for the overall company in Q1 2023 were $1.801 billion, with Asia contributing $557 million, Canada $438 million, and the US $471 million[26] - Core earnings after tax at fixed exchange rates for Q2 2023 were $1,513 million, with Asia contributing $473 million, Canada $353 million, and the US $384 million[27] - Core earnings after tax for common shareholders in Q2 2023 were $1,539 million, with a fixed exchange rate adjustment of $(8) million[29] - Core earnings after tax for common shareholders in Q1 2024 were $1,699 million, with a fixed exchange rate adjustment of $0 million[29] - Core earnings after tax excluding GA reinsurance transactions were $1,754 million, with Asia contributing $657 million, Canada $364 million, the US $452 million, and Global Wealth & Asset Management $357 million[22] Capital Adequacy and Financial Ratios - The LICAT ratio stood at 138%, indicating strong capital adequacy[2] - Shareholders' core return on equity (ROE) was 16.7%, while ROE was 8.0%, but adjusted for the Global Atlantic transaction, ROE was 15.5%[3] - Shareholders' core return on equity (annualized) for Q2 2023 was 15.5%, with core earnings after tax for common shareholders at $6,173 million[30] - Shareholders' core return on equity (annualized) for Q1 2024 was 16.7%, with core earnings after tax for common shareholders at $6,833 million[30] - Shareholders' return on equity excluding GA reinsurance transactions (annualized) for Q2 2023 was 15.5%, with net income attributable to common shareholders at $1,578 million[32] - Core EBITDA margin for Q1 2024 was 25.5%, slightly down from 25.7% in Q4 2023 but up from 22.4% in Q1 2023[42] Business Performance by Region - In Asia, core earnings increased by 39% to USD 488 million, with APE sales growing by 13% to USD 950 million, and new business CSM and value increasing by 68% and 28% respectively[5] - In Canada, APE sales surged by 54% to CAD 450 million, with new business CSM and value increasing by 52% and 71% respectively[5] - Asia's core earnings grew by 39% year-over-year in Q1 2024, while global wealth and asset management core earnings increased by 25%[11] - Canada's APE sales increased by 54% in Q1 2024, driven by growth across all business segments[14] - US APE sales grew by 14% in Q1 2024, reflecting increased demand for wealth accumulation insurance products among affluent customers[14] - Asia core earnings for Q1 2024 were CAD 657 million, up from CAD 489 million in Q1 2023[19] - Canada core earnings for Q1 2024 were CAD 364 million, slightly up from CAD 353 million in Q1 2023[19] - US core earnings for Q1 2024 were CAD 452 million, up from CAD 385 million in Q1 2023[19] - Global Wealth and Asset Management core earnings for Q1 2024 were CAD 357 million, up from CAD 287 million in Q1 2023[19] - Core earnings (after tax) for Asia and US business units in USD were $488 million and $335 million respectively, with no adjustments for fixed exchange rates[23] - Net income attributable to shareholders (after tax) was $866 million, with Asia contributing $363 million, Canada $273 million, and the US showing a loss of $108 million[22] - Net income attributable to shareholders in Asia for Q1 2024 was $363 million, compared to $615 million in Q4 2023[38] - Net income attributable to shareholders in the U.S. for Q1 2024 was a loss of $108 million, compared to a profit of $198 million in Q4 2023[38] - Net income attributable to shareholders in Canada for Q1 2024 was $273 million, down from $365 million in Q4 2023[38] Global Wealth and Asset Management - Global Wealth and Asset Management net inflows reached CAD 6.7 billion, up from CAD 4.4 billion in Q1 2023[2] - Global wealth and asset management business recorded net inflows of CAD 6.7 billion in Q1 2024, a CAD 2.3 billion increase from Q1 2023[14] - Global Wealth and Asset Management core earnings for Q1 2024 were CAD 357 million, up from CAD 287 million in Q1 2023[19] - Global Wealth and Asset Management business reported net income of $365 million in Q1 2024, consistent with Q4 2023[38] - Core EBITDA for the Global Wealth and Asset Management business in Q1 2024 was $477 million, slightly up from $474 million in Q4 2023[41] - Core earnings for the Global Wealth and Asset Management business in Q1 2024 were $357 million, compared to $353 million in Q4 2023[41] - Core EBITDA on a constant currency basis for the Global Wealth and Asset Management business in Q1 2024 was $477 million, consistent with Q4 2023[41] - Core revenue for Q1 2024 was $1.873 billion, up from $1.842 billion in Q4 2023 and $1.756 billion in Q1 2023[42] - Global Wealth and Asset Management core revenue for Q1 2024 was $1.873 billion, compared to $1.842 billion in Q4 2023 and $1.756 billion in Q1 2023[42] - Total investment income for Q1 2024 was $4.789 billion, down from $7.171 billion in Q4 2023 but up from $5.464 billion in Q1 2023[42] - Global Wealth and Asset Management investment income for Q1 2024 was $140 million, compared to $230 million in Q4 2023 and $107 million in Q1 2023[42] New Business and Contractual Service Margin (CSM) - Annualized Premium Equivalent (APE) sales grew by 21% compared to Q1 2023, with new business CSM and new business value increasing by 52% and 34% respectively[2] - CSM balance increased to CAD 21.089 billion as of March 31, 2024, up by CAD 649 million compared to December 31, 2023[15] - Natural CSM change in Q1 2024 increased by CAD 314 million, driven by new business and interest accretion, partially offset by core earnings amortization[15] - Non-natural CSM change in Q1 2024 increased by CAD 335 million, benefiting from favorable equity market performance and foreign exchange rate movements, partially offset by the Global Atlantic reinsurance transaction[15] - Post-tax CSM, excluding non-controlling interests, stood at CAD 18.547 billion as of March 31, 2024[15] - New business CSM total for Q1 2024 reached $658 million, compared to $626 million in Q4 2023 and $442 million in Q1 2023[35] - Asia region contributed $491 million to new business CSM in Q1 2024, up from $414 million in Q4 2023 and $301 million in Q1 2023[35] - Hong Kong's new business CSM in Q1 2024 was $168 million, down from $199 million in Q4 2023 but up from $119 million in Q1 2023[35] - Japan's new business CSM increased to $48 million in Q1 2024 from $42 million in Q4 2023 and $36 million in Q1 2023[35] - Other Asian regions saw a significant jump in new business CSM to $275 million in Q1 2024 from $173 million in Q4 2023 and $146 million in Q1 2023[35] - Canada's new business CSM remained steady at $70 million in both Q1 2024 and Q4 2023, up from $46 million in Q1 2023[35] - US new business CSM decreased to $97 million in Q1 2024 from $142 million in Q4 2023 but was slightly higher than $95 million in Q1 2023[35] - Full-year 2023 new business CSM totaled $2,167 million, with Asia contributing $1,549 million, Canada $224 million, and the US $394 million[35] - Currency adjustments had a negative impact of $7 million on new business CSM in Q1 2024, with Asia being the most affected region at $5 million[35] - On a constant currency basis, new business CSM for Q1 2024 was $658 million, slightly lower than the $619 million in Q4 2023 but significantly higher than the $434 million in Q1 2023[35] Reinsurance and Capital Management - The company completed a significant reinsurance transaction with Global Atlantic, involving CAD 5.6 billion in net insurance liabilities, releasing CAD 800 million in capital, which will be returned to shareholders through a share repurchase program[7] - Net income attributable to shareholders excluding GA reinsurance transactions for Q2 2023 was $1,633 million, with a net loss from GA reinsurance transactions of $(767) million[31] - Net income attributable to shareholders excluding GA reinsurance transactions for Q1 2024 was $1,633 million, with a net loss from GA reinsurance transactions of $(767) million[31] - Future share repurchases will depend on earnings, cash requirements, market conditions, and regulatory approvals[45] Digital and Technological Innovations - Manulife launched a new AI-powered sales tool, JHINI, in the US to enhance sales team efficiency[8] - The company introduced M-Pro in Vietnam, a digital pre-signature verification tool, improving customer experience[8] - Manulife's new retail wealth platform in Canada manages over CAD 54 billion in assets, enhancing advisor and client experiences[9] - JohnHancock.com's Vitality page saw a 43% increase in visits in Q1 2024 compared to Q1 2023, driven by the Your Year in Wellness campaign[10] Risks and Future Outlook - The company highlights risks such as market volatility, interest rates, credit spreads, and the impact of COVID-19 variants on future performance[45] - Potential factors affecting future results include changes in legal and regulatory environments, accounting standards, and capital requirements[45] - The company's ability to achieve strategic plans and maintain reputation are key factors in future performance[45]