Manulife's Q3 2025 Earnings Call: Contradictions in Asia Sales Growth, Margin Shifts, and Acquisition Impact

Sales and earnings growth expectations in Asia, shift to higher margin products, impact of U.S. election on business strategy, impact of eMPF on Manulife's earnings, and Comvest acquisition impact on EPS accretion are the key contradictions discussed in Manulife Financial Corporation's latest 2025Q3 earnings call



Strong Financial Performance and Strategic Acquisition:
- Manulife Financial Corporation reported core EPS growth of 2% from the prior year, driven by strong underlying business growth, though dampened by elevated U.S. mortality and ECL provisions.
- The company announced an agreement to acquire a 75% stake in Comvest Credit Partners for $937.5 million, expected to be immediately accretive to core EPS, core ROE, and core EBITDA margin.
- The acquisition will enhance Manulife's private credit capabilities and scale its private markets business, aligning with the strategic focus on growing Global WAM lines of business.

Asia and Global WAM Growth:
- Manulife's high potential Asia segment reported APE sales increase of 31% from the prior year, with new business CSM and new business value rising by 34% and 28%, respectively.
- Global WAM achieved a 19% growth in core earnings, supported by positive net flows of nearly $1 billion and a core EBITDA margin expansion to 30.1%.
- This growth was driven by strong inflows in institutional and retirement channels, as well as proactive expense management and strategic expansions in key regions.

Impact of Market Volatility and Financial Resilience:
- The company's LICAT capital ratio remained strong at 136%, reflecting its financial resilience amid market volatility.
- Despite challenges such as elevated investment credit loss provisions and unfavorable U.S. mortality experience, Manulife continued to generate significant book value per share growth, up 5% from the prior year.
- The company's robust balance sheet and financial flexibility have allowed it to navigate evolving macroeconomic environments, ensuring continued shareholder returns and strategic capital deployment.

MPF Transition and Efficiency Improvements:
- Manulife's retirement business expects a $25 million quarterly impact from the transition to the eMPF platform in Hong Kong, commencing in Q4 2025.
- The company has proactively managed expenses and expanded margins through ongoing efficiency improvements, partly offsetting expected transitional impacts.
- Despite the transition-related headwinds, Manulife maintains confidence in the long-term growth potential and profitability of its retirement business, driven by market demand and product offerings.