OREANDA-NEWS. Manulife Financial Corporation (“MFC") today announced net income attributed to shareholders of $246 million for the fourth quarter of 2015 ("4Q15") and $2,191 million for the full year of 2015. This compares to $640 million and $3,501 million for the corresponding periods in 2014. In 4Q15, fully diluted earnings per common share (“EPS’') was $0.11 and return on common shareholders’ equity (“ROE”) was 2.3% compared with $0.33 and 8.1%, respectively, for the fourth quarter of 2014 (“4Q14”). For the full year of 2015, fully diluted EPS was $1.05 and ROE was 5.8%, compared with $1.80 and 11.9%, respectively in 2014.
Net income attributed to shareholders for the quarter and full year was significantly impacted ($250 million of charges in 4Q15 and $876 million in charges for the full year of 2015) by the sharp decline in oil and gas prices on our investment-related experience.
Core earnings (consisting of items we believe reflect the underlying earnings capacity of the business) in 4Q15 were $859 million compared with $713 million in 4Q14 and for the full year 2015 were $3,428 million compared with $2,888 million in 2014. In 4Q15, fully diluted core earnings per common share (“Core EPS”) was $0.42 and core return on common shareholders’ equity (“Core ROE") was 8.7% compared with $0.30 and 9.2%, respectively, in 4Q14. For the full year of 2015, Core EPS was $1.68 and Core ROE was 9.2%, compared with $1.48 and 9.8%, respectively, in 2014.
Donald Guloien, President and Chief Executive Officer, stated, "This was a disappointing year in terms of net income, largely due to sharp mark-to-market declines in oil and gas prices, diminishing an otherwise great year. Our core earnings, before giving effect to investment-related impacts, rose 28%, which was ahead of plan, and highlights Manulife’s powerful operating momentum. We delivered strong top line growth both in the fourth quarter and for the full year, with most of it coming from businesses which generate our highest returns."
“Looking ahead, we expect that some macroeconomic headwinds and energy price volatility will persist, and that unless energy prices strengthen, it will be difficult for us to achieve the $4 billion core earnings objective we have set for 2016.3 Despite these challenges, we have never felt more confident about the underlying fundamentals and the long-term strategic positioning of our company. On this basis, we again raised our dividend today, marking our third increase in less than two years. This decision reflects our Board’s confidence in our capital position, our ability to deliver sustainable underlying core earnings growth, and the significant progress we have made on our strategic plan,” added Mr. Guloien.
Steve Roder, Chief Financial Officer, said, "Return on equity for the year was below our expectations; however, we expect Core ROE expansion over the medium term as we execute on our strategy and as investment experience normalizes."
“Our underlying business results in 2015 demonstrate that we are on the right path. We generated strong net flows into our global wealth and asset management businesses, we substantially grew insurance sales, margins and new business value in Asia, and we delivered core earnings per share growth of over 20% before giving effect to investment-related impacts," added Mr. Roder.