Manulife Financial Corp.’s underlying net earnings increased in the first quarter, but overall net income attributable to shareholders was lower due to the steep yield curve in North America.
The insurer and financial services company said its core earnings were $1.63 billion, or 82 cents a share, for the three months ended March 31, compared with $1.03 billion, or 51 cents a share, a year earlier.
The company benefited from seed capital investments in new spin-off and mutual funds, higher new business volume in Asia and the US, and core investment gains.
Including one-time adjustments, Manulife earned $783 million, or 38 cents a share, compared with $1.3 billion, or 64 cents a share, in the first quarter of 2020.
The impact of the yield curve on net income was partially offset by higher fundamentals and an improved investment experience.
Total new business increased 27.7% to $599 million, with Asia up 34% to $477 million, Canada flat at $78 million and the U.S. up 22% to $44 million.
Manulife was expected to report 77 cents in basic earnings per share, according to financial data firm Refinitiv.
“We delivered very strong operating results in the first quarter of 2021, driven by double-digit core earnings growth across all of our operating segments,” said CEO Roy Gori.
“While the overall impact of higher interest rates is positive for our company over the long term, higher risk-free rates and a steep yield curve in North America impacted net income this quarter.”
The Toronto-based company, which has more than 37,000 employees worldwide, said it is working to cut expenses and expand its presence in Asia through partnerships with banks in Indonesia and Vietnam.
