Manulife Financial (MFC) Q1 2025 earnings summary

Executive summary

• Delivered strong Q1 2025 results with robust growth in APE sales (up 37%), new business CSM (up 31%), and new business value (up 36%), led by Asia and Global WAM segments.

• Core EPS increased 3% to $0.99, while adjusted book value per share rose 12% to $36.66; net income attributed to shareholders was $485M, down from $866M in 1Q24 due to realized losses on reinsurance transactions.

• Strong balance sheet with LICAT ratio at 137% and financial leverage ratio at 23.9%, reflecting financial resilience.

• Reinsurance transactions released ~$2.8B in capital, reduced legacy risk, and enabled a new share buyback program.

• CEO Roy Gori announced his final earnings call, marking a leadership transition to Phil Witherington.

Financial highlights

• APE sales grew 37% year-over-year to $2.69B, with Asia contributing 50% growth; new business value up 36% to $907M, new business CSM up 31% to $907M.

• Core earnings were $1.77B, up 3% year-over-year; core ROE was 15.6%, down 0.6 pps.

• Global WAM posted $0.5B in positive net flows, down from $6.7B in 1Q24; core earnings up 24%, core EBITDA margin expanded to 28.4%.

• Non-core charge of $781M from realized losses on fixed income disposals related to LTC reinsurance, offset in OCI.

• Dividend per common share increased 10% to 44.0¢.

Outlook and guidance

• 2027 targets include core ROE of 18%+, cumulative remittances of $22B+, new business CSM growth of 15%, and core EPS growth of 10–12%.

• Medium-term targets reaffirmed for expense efficiency ratio (<45%), financial leverage ratio (25%), and core dividend payout ratio (35–45%).

• Management remains cautiously optimistic for the year ahead, expecting normalization of Asia sales growth but continued resilience despite macroeconomic uncertainty.

• No direct impact from tariffs expected, but macro uncertainty could affect consumer sentiment.