Great-West Lifeco (GWO) Q1 2025 earnings summary

Executive summary

• Base earnings rose 5% year-over-year to $1.03 billion ($1.11 per share), driven by double-digit growth in Retirement and Wealth businesses, especially in the U.S. segment.

• Net earnings from continuing operations fell 17% year-over-year to $860 million ($0.92 per share), mainly due to unfavorable market experience, lower real estate returns, and interest rates.

• Leadership transition announced: Paul Mahon retiring, David Harney appointed as next President and CEO, effective July 1, 2025.

• Maintained a resilient business model with diversified operations across stable geographies and a prudent investment approach.

• Continued shift toward capital-efficient businesses, with substantial financial flexibility and strong capital ratios.

Financial highlights

• Base ROE at 17.2%, up 0.2pp year-over-year; net ROE at 15.6%.

• Base EPS of $1.11, up 6% year-over-year; net EPS at $0.92.

• Total client assets surpassed $3 trillion, a 13% increase year-over-year; AUMA at $1.01 trillion.

• Lifeco cash position at $2.5 billion, up $370 million sequentially.

• Efficiency ratio improved to 56.7%; leverage ratio at 28%.

Outlook and guidance

• Management remains focused on expanding capital-efficient businesses, particularly in the U.S., and expects continued growth in Retirement and Wealth segments despite market volatility.

• Revised medium-term objectives: base EPS growth of 8-10%, base capital generation above 80%, base ROE above 19%, and dividend payout ratio of 45-55%.

• Ongoing share repurchases and strong capital generation support growth ambitions.

• Expect continued net plan growth and market share gains in U.S. retirement, though quarterly volatility anticipated.

• Guidance for Canada Wealth margin at 20% run rate, with some seasonality and overhead allocation impacts.