Manulife eyes India, Korea for growth
Manulife likely to stay out of Europe, given the the many large financial institutions already there and Latin America.india Updated: May 05, 2006 11:35 IST
Manulife Financial Corp wants to keep growing in regions where it has already established a presence, but would also like to plant its feet in India and Korea, the chief executive of the world's No 5 life insurer said on Thursday.
Two years after acquiring John Hancock in a blockbuster deal that ranks as one of the industry's biggest, Chief Executive Dominic D'Alessandro said the company remains well positioned to take advantage of acquisition opportunities that may surface.
"We like all of the regions where we are, and we think that we have an ideal platform for growth in all the exciting markets in the world," D'Alessandro, told reporters after the company's annual meeting in Toronto.
"We'd like to continue to grow in the U.S. and to grow in Asia where we already have a presence in 10 countries there now. But we would also like to be in India some day and we'd like to go to Korea."
D'Alessandro also said Manulife, which has more than C$3 billion ($2.7 billion) in excess capital, would likely stay out of Europe, given the the many large financial institutions already there, and Latin America. Rival Sun Life Financial is already active in India.
Manulife, which operates in Canada and Asia through Manulife Financial and in the United States primarily through John Hancock, also said the quicker-than-expected integration of John Hancock has built its confidence for whatever move it makes next.
"Every time you do anything in life where it works out well it emboldens you to do others, so we feel confident in our ability to do business combinations as I think we're familiar with the issues," said D'Alessandro.
Manulife's chief executive also repeated that mergers between Canadian financial institutions should be allowed, something the government has not permitted since it blocked two merger proposals in 1998.
"I would recommend that mergers within the industry whether bank with bank, bank with insurer, or insurer with insurer, be allowed," D'Alessandro told the annual meeting.
"As it now stands it is highly unlikely that the aspirations of the ten or so large institutions that make up the bulk of our financial services industry can be satisfied by domestic demand alone."
Ups earnings, splits stock
Manulife reported an 18.6 per cent jump in first-quarter profit, due to growth in its wealth management business, and declared a stock dividend, which will have the same effect as a two-for-one stock split of its common shares.
Its net income for the quarter to March 31 was C$949 million ($855 million), or C$1.19 a share, up from C$800 million, or 98 Canadian cents a share, in the same period last year.
The profit just topped analysts' expectations for a profit of C$1.18 per share, according to Reuters Estimates.
Revenue rose 8.6 per cent to C$8.2 billion from C$7.5 billion.
Total premiums and deposits rose 20 per cent to C$17.9 billion from C$14.9 billion last year, while funds under management rose to C$385.6 billion from C$349.9 billion last year.
Return on equity rose to 16.3 per cent on an annualised basis from 14.1 per cent in the year-ago quarter.
Manulife shares fell 97 Canadian cents, or 1.3 percent to C$71.25 on the Toronto Stock Exchange, its lowest close since early February.
The stock is up 4 per cent so far this year. Shares of rival Sun Life Financial are down 3 per cent, while stock in Great-West Lifeco Inc has fallen nearly 7 per cent.