IA Financial Group, Manulife Financial Corp. and Sun Life Financial Inc. have reported fourth quarter and 2018 earnings.
While IA reported generally positive results, gross sales of mutual funds were 481.8 million (down 14%), and net outflows were $117.9 million compared with net inflows of $30.7 million a year earlier.
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In a release, Denis Ricard, president and CEO of IA Financial Group, said the firm’s mutual funds business is “operating in a difficult business environment.”
However, “With the HollisWealth integration behind us, we are now focused on executing our strategy to leverage our affiliated distribution networks and to increase our share of their business,” he said. “We are making real progress on this front and will be working closely with our affiliates in 2019 to build upon those valuable relationships.”
IA’s individual wealth management had a net loss of $0.02 EPS ($2.4 million). A gain of $0.10 EPS on the adjustment of the final purchase price for the HollisWealth acquisition was erased by the loss from its dynamic hedging program (−$0.09 EPS) and the adverse impact of equity markets on assets under management (−$0.03 EPS).
Overall for the fourth quarter ended Dec. 31, 2018, IA Financial Group reports net income attributed to common shareholders of $149.5 million and diluted earnings per common share (EPS) of $1.36.
For the full year, net income attributed to common shareholders increased by 19% to $612.7 million, and EPS increased by 16% to $5.59.
Return on shareholders’ equity (ROE) for the last twelve months was 12.5%.
Ricard attributed the company’s results to such things as improved profitability in its auto and home employee plans, and results for its U.S. business.
Some business growth was attributed to retail wealth management: guaranteed product sales of $104.8 million were up 25% over the previous year reflecting the current preference of consumers for guaranteed products, the firm says. Gross sales of segregated funds were $460.0 million (+2%), and net sales were $76.1 million (−25%).
Assets under management and administration of $168.8 billion in the fourth quarter were down slightly over the previous quarter due to the weak market conditions and lower fund flows, the firm says.
Manulife reported net income attributed to shareholders of $4.8 billion in 2018, up $2.7 billion from 2017, in part related to U.S. tax reform, the firm says. For the fourth quarter, income attributed to shareholders was $0.6 billion, up $2.2 billion from 2017’s fourth quarter.
Core earnings were $5.6 billion in 2018, up 23% from 2017, and $1.3 billion in 4Q18, up 8% from 4Q17.
Diluted earnings per common share was $2.33 for the year and $0.28 for the quarter. ROE was 11.6% for the year and 5.3% for the quarter.
Earnings were driven by improved policyholder experience, says the firm, as well as such things as the non-recurrence of 2017’s hurricane-related charges, effects from U.S. tax reform and greater expense efficiency.
Wealth and asset management saw net flows of $1.6 billion in 2018, a decline of $16.7 billion compared with 2017. Fourth-quarter net flows were down $9.0 billion compared with positive net flows of $3.6 billion in 4Q17.
Sun Life Financial
Sun Life Financial also reported earnings, ending Dec. 31, 2018.
Net income was $580 million, up from $207 million in the fourth quarter of 2017. The increase was primarily related to U.S. tax reform, the firm says in a release.
It says market volatility reduced fee income from asset management and wealth businesses primarily due to lower asset values, offsetting business growth in life and health insurance businesses.
Insurance sales and wealth sales were up 19% and 3% over the prior year quarter, respectively.
In the fourth quarter of 2018, reported and underlying ROE increased to 10.9% and 13.6%, respectively, reflecting higher earnings.
Mutual funds sales were $22.1 billion in the fourth quarter of 2018, an increase of $0.8 billion from the fourth quarter of 2017, driven in part by higher sales in MFS, the firm says.
Sales of mutual funds were $84.2 billion in 2018, compared to $87.5 billion in 2017, primarily due to decreased sales in India and the Philippines.
Sun Life Financial Asset Management ended the fourth quarter with $650 billion in assets under management, consisting of $584 billion in MFS and $66 billion in Sun Life Investment Management (SLIM). SLIM continued its momentum with its 12th consecutive quarter of net inflows, while MFS experienced net outflows of $8.7 billion in the quarter.