#Canada #Toronto #Manulife #Global WAM #Comvest Credit Partners

Manulife Financial Corporation: Q2 2025 Earnings Report Highlights

Introduction
Manulife Financial Corporation, a leading financial services group, has released its impressive Q2 2025 earnings report, demonstrating robust growth and resilience despite challenging market conditions. The report, which covers the period ending June 30, 2025, highlights substantial gains in core earnings and strategic advancements in their business segments.

Key Financial Highlights

The company's core earnings for Q2 2025 stood at a strong $1.7 billion, representing a 2% decrease on a constant exchange rate basis when compared to Q2 2024. However, when excluding the effect of changes in expected credit loss (ECL), core earnings increased to $1.8 billion, marking a 2% rise. Notably, net income attributed to shareholders surged to $1.8 billion, reflecting a remarkable increase of $0.7 billion from the previous year.

Earnings per share (EPS) reported was $0.98, an impressive 88% increase from the same quarter last year. Even when adjusting for ECL changes, the core EPS grew by 7%, highlighting the company's strong operational performance. Additionally, Manulife's return on equity (ROE) reached 15.6%, reinforcing its commitment to profitability and financial stability.

Strategic Acquisitions and Business Growth

One of the pivotal announcements during the report was Manulife's agreement to acquire a 75% stake in Comvest Credit Partners, aimed at bolstering its Global Wealth and Asset Management (WAM) platform. This acquisition, valued at US$14.7 billion, is expected to finalize in Q4 2025 and will significantly enhance Manulife's capabilities in private credit, positioning the company for sustained growth in the future.

In terms of new business growth, Manulife demonstrated remarkable momentum with annualized premium equivalent (APE) sales increasing by 15% and new business contractual service margin (CSM) rising by 37% compared to Q2 2024. The company's focus on high-potential businesses, particularly in the Asia segment, showcased a 31% growth in APE sales, underscoring the strength of their diversified portfolio.

Technological Integration and Customer-Centric Initiatives

Notably, Manulife's commitment to innovation was evident in its ongoing investment in digital and AI-driven solutions. The company successfully launched various initiatives, including the rollout of an AI-powered sales enablement solution within its retirement services, which doubled sales opportunities and significantly reduced the time spent on information searches by over 50%.

In Asia, Manulife introduced 'VOICE,' a multi-signal dashboard that utilizes generative AI technology to derive insights from customer interactions, enhancing client servicing and training efforts while identifying opportunities for added value.

Earnings Breakdown by Region

Breaking down the earnings report by region reveals varying performances:

• - Asia: Core earnings increased by 13%, reflecting robust growth amidst favorable claims experience. APE sales in this region reached significant heights, driven by higher sales volumes especially within Hong Kong.
• - Canada: Core earnings were up by 4%, backed by growth in Group Insurance and improved investment spreads. However, APE sales faced a decline due to the absence of a large case compared to the previous year's numbers.
• - U.S.: This segment faced challenges, with core earnings dropping by 53%, largely attributed to unfavorable claims and strengthened ECL provisions.

The Global WAM also reported massive improvements with $0.9 billion in net inflows, particularly driven by positive market conditions and contributing to a significant increase in core earnings.

Conclusion

Manulife's Q2 2025 earnings report signifies the company's robust financial performance and operational resilience. The strategic acquisition of Comvest, continuous growth across various segments, and technological advancements underscore its commitment to future growth and shareholder value. As the company builds upon its strong foundation, its focus on high-potential businesses and customer-centric innovations positions it favorably for the challenges and opportunities that lie ahead.

Upcoming Events:
Manulife will host a conference call on August 7, 2025, for an in-depth discussion of these results, allowing stakeholders to gain further insights into the company's future direction and performance.