Canadian institutions have mixed results but announce dividend increases
Canada’s two largest life insurers have announced earnings results for 2016. Manulife Financial reported solid income growth year-over-year, while Great-West Lifeco dipped somewhat.
Manulife had net earnings attributed to shareholders of $2,929 million for 2016 and fully diluted earnings per common share of $1.41, compared with $2,191 million and $1.05 respectively for 2015.
The firm also saw total assets under management and administration increase by 6 per cent to $977 billion as of December 31, 2016.
For Great-West, net earnings dropped to $2,641 million, compared to $2,762 million for 2015.This represents $2.668 per common share, down from $2.774 last year.
More favorable was the consolidated assets under administration total, which increased by $36 billion to exceed $1.2 trillion.
Looking at the fourth quarter in isolation, Manulife’s net income was $63 million, with earnings per common share of $0.01, compared to $246 million and $0.11 for Q4 2015. Addressing this, Manulife President and CEO Donald Guloien explained that the final three months were not part of the larger annual trend.
“While the overall impact of higher rates is highly positive over the long term for our company, net income was negatively impacted by market movements in the fourth quarter. For the full year, net income was $2.9 billion, an increase of 34% over the prior year."
Great-West also saw underwhelming earnings for Q4 of $676 million or $0.686 per common share, compared to $683 million or $0.688 per common share for the same period in 2015.
This result, the company said, was in large part down to restructuring costs related to a realignment of Great-West Life subsidiary Putnam Investments of $20 million.
While the final quarter of 2016 was somewhat disappointing for the firms, both committed to increasing shareholders’ dividends that are payable in March.
Manulife announced an 11 per cent increase to its quarterly dividend, up to $0.205 cents per share, while Great-West will have a quarterly dividend of $0.3670 per common share, representing a 6 per cent increase from the previous quarter.
Looking strictly at Canadian business, Manulife had 2016 net earnings of $1,486 million compared to $480 million in 2015. Canadian insurance sales declined 16 per cent, which can in large part be explained by 2015’s total including two exceptionally large group benefits sales.
Great-West in Canada meanwhile had 2016 net earnings of $1,218 million, compared to $1,195 million for 2015. Total sales for 2016 were $12.9 billion, compared to $12.6 billion for 2015 driven by strong growth in individual life insurance, group insurance and wealth group retirement products.
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