#Canada #Toronto #NCIB #Sun Life #common shares

Sun Life Financial's Early Renewal of Normal Course Issuer Bid

On June 4, 2025, Sun Life Financial Inc. announced that it has received approval from the Office of the Superintendent of Financial Institutions and the Toronto Stock Exchange (TSX) for an early renewal of its normal course issuer bid (NCIB). This move is seen as a proactive strategy aimed at returning capital to its investors by allowing the company to repurchase its own shares from the market.

The previous NCIB began on August 29, 2024, during which Sun Life successfully bought back 14,429,085 of the maximum authorized 15,000,000 common shares, at an average price of approximately CAD 81.49 per share. This demonstrated the company's strong commitment to enhancing shareholder value. The newly approved 2025 NCIB will enable Sun Life to purchase up to 10,570,915 common shares, which includes both the shares left over from the 2024 NCIB and an allowance for an additional 10 million shares.

The new buyback plan will take effect from June 9, 2025, and will remain active until May 21, 2026, unless adjusted sooner by the company. The flexibility to procure shares under the 2025 NCIB could facilitate a more significant return of capital to shareholders, reinforcing Sun Life's overall capital management strategy.

From April to May 2025, the average daily trading volume of common shares for Sun Life at the TSX was approximately 2,170,836 shares, granting the company the potential to repurchase up to 542,709 shares per trading day. This volume reflects a calculated approach that adheres to rules governing share repurchases, ensuring that purchases are made in a manner compliant with market regulations.

The strategy behind an NCIB is to allow a company the opportunity to manage its share count and enhance earnings per share, signaling to the market that the company believes its stock is undervalued. However, Sun Life has also taken into account that the total number of shares repurchased under the previous NCIB will reduce the maximum number of shares it can repurchase under the new plan.

The 2025 NCIB's upper limit of 25 million shares encompasses both the shares already repurchased under the previous NCIB and those available for the new program. The company has outlined a clear intention to engage with the market actively and will pursue purchases both on the TSX and through other trading platforms, including the New York Stock Exchange (NYSE).

In addition to regular market repurchases, Sun Life is exploring private agreements for share buybacks, which could enable it to acquire shares at discount prices. These repurchases will either be cancelled, or the shares will be utilized for incentive arrangements under various equity-settled compensation schemes.

Furthermore, in line with enhancing efficiency in trading, Sun Life will establish an automatic share repurchase plan with its designated broker. This plan is designed to facilitate purchases during periods when the company is typically inactive in the market, thereby ensuring that share acquisitions can continue without interruption due to internal restrictions on trading.

Conclusion

Investors have responded positively to the announcement, seeing it as a commitment to maximizing shareholder value in a rather volatile market. Sun Life Financial, as a leading global financial services organization, continues to take strategic steps to ensure financial robustness while providing returns to its shareholders. As of March 31, 2025, the organization held total assets under management amounting to CAD 1.55 trillion, highlighting its strong market position. This early renewal of the NCIB signifies Sun Life's prudent financial management and commitment to delivering shareholder value effectively.