Manulife reported $1.5 billion in quarterly profit and raised its dividend by 10 per cent, even as shares fell following softer sales in Hong Kong during the fourth quarter.
BNN Bloomberg spoke with Colin Simpson, chief financial officer at Manulife, about earnings growth, margin expansion in Asia, net outflows in asset management and the launch of new ETF-based mutual funds and a global credit strategy.
Key Takeaways
- Manulife reported $1.5 billion in quarterly profit, with earnings up five per cent and per-share earnings up nine per cent, and raised its dividend by 10 per cent.
- Shares fell as much as five per cent after results, partly due to softer fourth-quarter sales in Hong Kong and $9.5 billion in net asset management outflows.
- Hong Kong sales declined quarter over quarter, but full-year sales in the region rose 21 per cent and margins improved to 52.4 per cent from 39.7 per cent a year earlier.
- The company announced a new share buyback of about 2.5 per cent of outstanding shares, signalling confidence in capital strength.
- Manulife launched ETF-based mutual funds and a global credit strategy to broaden access to actively managed equity, fixed income and corporate bond investments.
Read the full transcript below:
LINDSAY: In its latest quarter, Canadian insurance company Manulife Investments announced new mutual funds to bring additional access to investors. Let’s get more on this from Colin Simpson, chief financial officer at Manulife. He joins us live now. It’s good to have you. Thanks so much for joining us.
COLIN: Thanks for having me. Happy Friday.
LINDSAY: Happy Friday to you as well. It’s great that the weekend is here. If we’re taking a look at the numbers that came out yesterday, Manulife reported $1.5 billion in its latest quarter. But I noticed yesterday Manulife shares fell as much as five per cent after reporting. I’m wondering what you make of this latest quarter. How are you feeling about the report?
COLIN: We were really happy with our numbers. We saw earnings go up by five per cent and, on a per-share basis, up by nine per cent. We felt so confident in our outlook that we increased the dividend by 10 per cent and announced a new share buyback of about two and a half per cent of the company. So things went really well for us in the quarter.
I think the reception to the results and the share price decline — some of that was due to softer Asia sales than we’ve seen in the past. We will always prioritize value over volume, so we certainly weren’t concerned with our Asian numbers. In fact, Asia earnings were up 24 per cent.
The other area that got some questioning on the call was that we saw $9.5 billion of net outflows in our asset management business. This was largely a function of what we’re seeing in the market and some very seasonal retirement fund flows. When you put that to one side, we saw really strong earnings growth out of our asset management business. So we’re feeling really good about the quarter and looking forward to the near future.
LINDSAY: I don’t want to take away from the positives of the report, but you did mention sales in Asia — sales in Hong Kong in particular — were down in the fourth quarter, despite strong performance throughout the year. What drove those sales being down in that quarter?
COLIN: In Hong Kong, we sell through a variety of distribution channels. We have our own agents who sell our products, we have banks and we have independent agents. What we saw this quarter was the independent agent channel having a tougher period for us. Part of that is there has been some regulatory change, and there was a little bit of disruption in that channel.
The important thing to note is that our proprietary channel and the bank channels have higher margins. While sales were down in Hong Kong quarter over quarter, margin was up strongly. We had a 52.4 per cent margin. A year ago, that margin was 39.7 per cent. When you take a step back and look at overall sales growth in Hong Kong for the full year, it was up 21 per cent, which demonstrates that the comparator was quite tough for our fourth-quarter numbers.
LINDSAY: Manulife also announced it is launching ETF-based mutual funds. Tell us more about that and what investors can expect.
COLIN: We want to be the number one choice for customers. Our drive is to provide customers with how they want to invest and what they want to invest in. We want to give them as broad an opportunity as possible. ETFs are a core part of our product offering. Through John Hancock in the U.S. and through Manulife in Canada, we’re able to offer ETFs to give customers that extra choice.
When you look at what we offer as a company, we operate along the credit, equity and infrastructure spectrum. We have a fully illiquid private credit business through our private credit partners. We have semi-liquid strategies through CQS, based in London, and we have public credit strategies with a strong track record. On top of infrastructure opportunities, adding the option for customers to invest via ETFs makes us a compelling option for clients.
LINDSAY: You also announced a new global credit strategy. Tell us more about that.
COLIN: There’s no real change to global credit for Manulife. We remain constructive and pursue a diversified strategy. We operate in 14 different countries in Asia, so having people on the ground gives us the opportunity to assess credit locally and in real time.
We do not expect the economy to struggle significantly in 2025 or 2026, but it is unlikely to be a blowout year. We expect short-term interest rates in Canada to remain fairly steady until well into 2027. That reflects a credit environment that should continue to be relatively stable.
LINDSAY: Is that one of the headwinds you’re anticipating in 2026? What challenges do you see ahead for Manulife and the broader economy?
COLIN: One of the advantages of a life insurance company is that a significant portion of our earnings comes from business we’ve already written. Some macroeconomic and geopolitical concerns do not directly impact our earnings.
However, if those pressures spill into credit markets, that could present challenges for the broader financial services sector. We operate primarily in the public credit space, which is higher up the quality spectrum. We had a strong credit experience in the fourth quarter, reflecting a fairly benign credit environment in the areas where we operate.
LINDSAY: Colin Simpson, chief financial officer at Manulife, thanks for joining us this morning.
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This BNN Bloomberg summary and transcript of the Feb. 13, 2026 interview with Colin Simpson are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
