Manulife Financial (MFC) Q2 2024 earnings summary

Executive summary

• Delivered strong Q2/2Q24 results: APE sales up 17%, core earnings up 6% to $1.7B, and core EPS up 9% to $0.91; core ROE reached 15.7%.

• Adjusted book value per share increased 15% to $33.96, and MLI's LICAT ratio improved to 139%.

• Asia and Global WAM drove earnings growth, with Asia core earnings up 40% and Global WAM up 23-24%.

• Accelerated share buybacks, planning to repurchase up to 90 million shares, returning over $3B to shareholders.

• Closed major reinsurance transactions and completed the acquisition of CQS.

Financial highlights

• Core earnings rose 6% year-over-year to $1.7B; net income attributed to shareholders was $1.042B.

• APE sales increased 17% year-over-year, led by Canada and Asia.

• New business CSM grew 6%, and new business value rose 23% year-over-year.

• Core ROE reached 15.7%, up 0.2 pps year-over-year; adjusted book value per share up 15% to $33.96.

• Global WAM net inflows were $0.1B, down from $2.2B in 2Q23.

Outlook and guidance

• Raised 2027 core ROE target to 18%+ and cumulative remittances target to $22B+ for 2024-2027.

• Medium-term targets: 15% new business CSM growth, 8-10% CSM balance growth, 10-12% core EPS growth, and expense efficiency ratio below 45%.

• Asia and Global WAM expected to remain key growth drivers; strong pipeline for Canadian wealth platform.

• Expect moderation in Japan sales growth as macro conditions normalize.

• Tax rate guidance remains at 17%-23%, with expectation to stay near the low end as Asia grows.