Manulife Financial (MFC) Q4 2023 earnings summary

Executive summary

• FY23 delivered double-digit growth in APE sales, new business value and new business CSM; core EPS rose 17% on a constant-exchange-rate basis and core ROE reached 15.9%.

• Positive Global WAM net flows, strong remittances and capital returns supported a stronger balance sheet; LICAT was 137% at 4Q23.

• Strategic execution included large LTC reinsurance transactions, an agreement to acquire CQS, and continued investment in digital processing and customer experience.

Financial highlights

• FY23 core earnings were C$6.684B, up 15%; net income attributed to shareholders was C$5.103B and core EPS was C$3.47, up 17% on a constant-exchange-rate basis.

• 4Q23 core earnings were C$1.773B, up 15% YoY; net income attributed to shareholders was C$1.659B and EPS was C$0.86.

• FY23 APE sales were C$6.4B, up 12%; new business value was C$2.324B, up 10%, and new business CSM was C$2.167B, up 12%.

• FY23 Global WAM net flows were C$4.5B; adjusted book value per share reached C$32.19, up 9% YoY.

• Excluding items from core earnings, FY23 net income included C$1.790B of total market experience losses, including C$1.623B of losses on actual versus expected ALDA returns.

Outlook and guidance

• Medium-term targets include core EPS growth of 8–10%, core ROE of 15%+, financial leverage of 25%, and a core dividend payout ratio of 35–45%.

• The target for Asia to contribute 50% of total core earnings was extended to 2027; the NPS target of 37 was also extended to 2027.

• LTC reinsurance transactions were expected to close by the end of February 2024; the transaction was expected to release C$1.2B of capital in 2024.

• The LTC transaction was expected to reduce morbidity sensitivity by 12% and was described as accretive to core EPS and core ROE.