Manulife's Q4 Earnings: A Banner Year and a Promising Future

Manulife Financial Corporation (MFC) has just released its full year and fourth quarter results for 2024, and the news is nothing short of impressive. The company reported record core earnings, 30%+ increases across top-line business metrics, double-digit core EPS growth for the full year, and a common share dividend increase of 10%. Let's dive into the key highlights and what they mean for investors.



Record Core Earnings and EPS Growth

* Core earnings of $7.2 billion in 2024, up 8% on a constant exchange rate basis from 2023.
* Core earnings of $1.9 billion in 4Q24, up 6% from the fourth quarter of 2023.
* Core EPS of $3.87 in 2024, up 11% from 2023, and $1.03 in 4Q24, up 9% from 4Q23.
* Excluding the impact of Global Minimum Taxes, core EPS was $3.97 in 2024, up 14% from 2023, and $1.06 in 4Q24, up 13% from 4Q23.

Manulife's core earnings and EPS growth are a testament to the company's strong performance across various business segments. The 8% increase in core earnings on a constant exchange rate basis and the 11% growth in core EPS demonstrate the company's ability to generate consistent and robust earnings, even in the face of global economic uncertainty.

Asia: A Key Driver of Growth

* Asia led with substantial top-line growth and a 27% increase in core earnings.
* Asia's Net Income attributed to shareholders was $417 million in 4Q24, down 8% from 4Q23, but full-year Net Income was $1,717 million, up 71% from 2023.
* Asia's Core Earnings were $477 million in 4Q24, up 16% from 4Q23, and $1,890 million for the full year, up 27% from 2023.
* Asia's APE sales were $1,187 million in 4Q24, up 316% from 4Q23, and $4,429 million for the full year, up 36% from 2023.
* Asia's New Business CSM was $419 million in 4Q24, up 338% from 4Q23, and $1,567 million for the full year, up 32% from 2023.

Asia has been a key driver of Manulife's growth, with significant increases in core earnings, APE sales, and New Business CSM. The region's strong performance demonstrates Manulife's success in executing its strategic objectives in this market.

LTC Reinsurance Transactions and Capital Optimization

* Manulife entered into an agreement with RGA to reinsure two blocks of legacy business, including a younger block of long-term care (LTC), the second LTC reinsurance transaction in less than 12 months.
* LICAT ratio of 137% in 4Q24, in line with the prior quarter.
* Remittances of $7.0 billion in 2024 compared with $5.5 billion in 2023.
* Purchased and cancelled 4.6% of common shares outstanding, or more than 82 million common shares, for $3.2 billion in 2024.

Manulife's LTC reinsurance transactions and capital optimization initiatives have helped the company manage its risk exposure and optimize its capital position. The LICAT ratio of 137% in 4Q24 indicates the company's strong capital position and its ability to generate cash from operations.

Dividend Increase and NCIB Program

* Manulife announced a 10% increase in the quarterly dividend per common share.
* The company also launched a new Normal Course Issuer Bid (NCIB) program to repurchase up to 3% of its outstanding common shares, commencing in late February 2025.

Manulife's dividend increase and NCIB program demonstrate the company's commitment to returning capital to shareholders and its confidence in the company's future prospects.

Looking Ahead

Manulife's strong performance in 2024 sets the stage for continued growth and success in the coming years. The company's focus on accelerating growth in its Asia and Global Wealth & Asset Management businesses, executing on its digital strategy, and optimizing its capital position has paid off in the form of record core earnings and EPS growth. As an investor, you can be confident that Manulife is well-positioned to continue generating value for shareholders in the years to come.