Shares of Manulife Financial Corp. hit an all-time high in midday trading on Thursday after the company reported third quarter earnings Wednesday that beat expectations.
“So, this quarter… a large part of the success was driven out of our asset management business, really blowout earnings there; 39 per cent up,” Manulife’s Global Chief Financial Officer Colin Simpson told BNN Bloomberg in a Thursday interview.
Simpson said that growth in Manulife’s Asia business also contributed to the strong results, where core earnings rose 17 per cent in the quarter compared to last year.
Overall, the Toronto-based insurer reported quarterly earnings of $1.84 billion, up from $1.01 billion last year, with earnings per share hitting $1, compared to 52 cents in the same period a year ago.
Simpson added that the company also performed well in Canada during the quarter, thanks to its diversification efforts in recent years.
“And not only were our earnings ahead of forecasts, but also our book value grew by nine per cent and 14 per cent on an adjusted basis, and that was ahead of analyst expectations,” he explained.
“So, we’re really pleased with the progress that we’ve made… and particularly pleased with this quarter’s results.”
Manulife’s previous all-time high of just over $44 was hit in 2007 before the stock tumbled the following year at the outset of the 2008 financial crisis, reaching lows of less than $10 in 2009. Shares were trading above $45 on Thursday.
Wednesday’s results came one week after the company announced it would be cutting 2.5 per cent of jobs in its global wealth and asset management unit, eliminating roughly 225 positions, according to the Toronto Star.
In a statement to BNNBloomberg.ca last week, a Manulife spokesperson said the company had “recently undergone a carefully considered reduction to the size of our workforce in an effort to leverage our global operating model and focus on high growth priorities.”
“We continue to invest in the most strategic opportunities to scale the business and deliver additional capabilities to our clients,” the statement said.
‘Lower risk, higher return’
Simpson pinpointed 2017 as a turning point for Manulife, when he said it made a strategic shift “towards a lower risk, higher return business” that some people say is now “unrecognizable” compared to previous iterations of the company.
“It may sound quite simple but when you’re dealing with long-tail liabilities, it takes some time to reduce some of that risk,” he said.
“I think the progress that we’ve made on offloading or reinsuring liabilities to reduce some of our exposure to that legacy business that has pulled our returns down, as well as accelerating growth in our asset management and Asia businesses really allowed us to push up our return.”
Simpson said the company is focused on improving its return on equity across its global businesses, with a set target of 18 per cent this year.
“This quarter we did 16.6 per cent, so some reasonable progress early on,” he said.
“But really I think as we get to that 18 per cent mark, people will recognize us for the high-quality company that we are.”
With files from Bloomberg News and The Canadian Press