Manulife Financial Corporation

Manulife reported core EPS up 16% year over year, driven by 12% core earnings growth and share buybacks. Core ROE was 16.3%, up 130 basis points from the prior-year quarter. Net income was $2.1 billion, and adjusted book value per share increased 15% year over year to $41.12. APE sales rose 21%, new business CSM grew 16%, CSM balance grew 20%, Global WAM net inflows were $0.4 billion, and the LICAT ratio was 136% with leverage at 22.2% and $26 billion in excess of the supervisory target ratio. On guidance, management said Canada insurance experience should trend neutral by year-end, elevated Canada expense investment will persist through year-end, and the corporate result is expected to be between $300 million and $400 million, with expectations toward the top end. For the LTC transaction, foregone core earnings are expected to be relatively immaterial at CAD 30 million per year in the first year and to decline over time.

Phil Witherington said the quarter showed disciplined execution across a diversified portfolio, with particular strength in Asia, Global WAM, and capital generation. He highlighted strategic progress in agency quality, AI adoption, longevity solutions, and product innovation, and said the company is embedding AI across the enterprise to improve growth, efficiency and customer experience. On LTC, he framed the Munich Re deal as a continuation of de-risking, but one that now shifts Manulife toward organic management of the block while preserving asset management benefits and earnings scale.

Colin Simpson emphasized strong top-line momentum and value creation, pointing to 21% APE sales growth, 16% new business CSM growth, and 10% pretax earnings growth in Global WAM. He said core earnings were helped by a lower expected credit loss provision and that net income reached $2.1 billion because better-than-expected public equity returns more than offset weaker ALDA returns. He also noted a strong balance sheet with a 136% LICAT ratio, $26 billion of excess capital, a 22.2% leverage ratio, and $5.3 billion returned to shareholders over the past 12 months; buybacks in the quarter were consistent with the 2.5% program and support the 18% ROE goal.

Analysts focused heavily on the Hong Kong/MCV business after China tax and enforcement headlines. Management said MCV is about 25% of Hong Kong sales year-to-date, it does not expect sales to go to zero, and any short-term impact should be manageable, with the broader mainland-to-Hong Kong demand trend still intact. Questions on the LTC reinsurance deal centered on ceding commission, asset retention, and buybacks; management said the transaction cedes biometric risk only, retains the assets and capital generation, and does not require a materially higher buyback pace to reach the 18% ROE target. Analysts also pressed on Canadian LTD claims and pricing; management said disability claims are pressured by mental health and macro weakness, but claims management, recoveries, and annual repricing tools should bring the business toward neutral by year-end.