Hong Kong company reporting season

Manulife, Prudential see profits boosted by strong Asian business

Manulife reports 78 per cent growth in Q2 profit to US$988m, while Prudential’s first half net profit doubles to US$1.95 billion.

PUBLISHED : Thursday, 10 August, 2017, 2:04pm
UPDATED : Thursday, 10 August, 2017, 11:34pm

Two Hong Kong-listed international insurers – Manulife and Prudential – both reported strong earnings on Thursday as a result of better sales of insurance products in Asia and solid investment gains.

Manulife Financial Corporation, the Canadian insurer listed in Hong Kong, reported a 78 per cent growth in net profit in the second quarter.

The company, which owns Hong Kong’s second largest life insurer, reported net profit of C$1.255 billion (US$988.6 million), or C$0.57 per share, for the three months from April to June.

Core earnings stood at C$1.174 billion, ahead of analysts’ consensus forecasts of C$1.05 billion as polled by Bloomberg. First half net profit was up 49 per cent to C$2.605 billion.

Roy Gori, president of Manulife, said strong insurance sales in mainland China, Vietnam, Japan and Singapore helped premium income rise 12 per cent in Asia during the period to US$686 million.

“We also delivered our 30th consecutive quarter of positive wealth and asset management net flows, with contributions from all divisions,” Gori said.

In Hong Kong, where it is the second largest life insurer and pension provider, Manulife reported a 2 per cent rise in life insurance premiums to HK$971 million, and wealth management sales were up 57 per cent to HK$7.3 billion.

We delivered our 30th consecutive quarter of positive wealth and asset management net flows, with contributions from all divisions
Roy Gori, Hong Kong-listed Manulife’s president

Despite the solid earnings report before the market opened on Thursday, the company’s share price lost 1.26 per cent to close at HK$157.1.

Louis Tse Ming-kwong, managing director of VC Asset Management, said Manulife and many other financial firms had seen strong rallies in recent weeks and now investors were selling the stocks to take profit.

Separately, British insurer Prudential, announced its net profit had climbed 109 per cent in the first half year to £1.5 billion (US$1.95 billion). Basic earnings per share came in at 128.5 pence, up 136 per cent. Operating profit gained 15 per cent to £2.358 billion.

Mike Wells, group chief executive of Prudential, credited the growth to Asia where profit from new life insurance business rose 18 per cent to £1.092 billion in the first half. Its asset management arm, Eastspring, reported a net inflow of funds of £2.3 billion during the first half.

“The scale, breadth and diversification of our businesses leave us well placed to continue to grow as we access the opportunities created by the region’s dynamic economies, fast-growing middle class and underpenetrated markets,” Wells said.

The company’s US life business, branded “Jackson”, reported a 7 per cent increase in operating profit while its British business also increased 22 per cent.

“In Asia we offer innovative products that meet the savings, health and protection needs of the fast-growing middle class,” Wells said, adding that the firm would focus on pensions and retirement in the US and Britain.

Prudential was unchanged at HK$190.2 on Thursday before it announced the results after market close.