Sun Life Financial reports second quarter results
Second quarter 2010 financial highlights
- Net income of $213 million, compared to a net income of $591 million
in the second quarter of 2009
- Earnings per share (diluted) of $0.37, down from earnings per share
of $1.05 in the second quarter of 2009
- Return on equity of 5.4%, down from 14.9% in the same period one year
- Quarterly dividend of $0.36 per share
TORONTO - Sun Life Financial Inc.(1) reported net income of $213 million for the second quarter of 2010, compared with net income of $591 million in the same period last year. Diluted earnings per share were $0.37 compared to earnings per share of $1.05 in the second quarter of 2009.
Volatile market conditions continued to impact the Company's financial results and reflected a much different capital market environment than the same period one year ago. Net income in the second quarter of 2010 was adversely impacted by declining equity markets and unfavourable interest rate movements. This contrasts with a strong equity market recovery and increasing interest rates in the second quarter of 2009, which favourably impacted results in that quarter.
Credit experience was favourable in the second quarter of 2010 relative to the same period a year ago. In addition, a tax benefit in the Company's United Kingdom operations contributed to an overall tax recovery in the quarter.
The Board of Directors of Sun Life Financial today declared a quarterly shareholder dividend of $0.36 per common share, maintaining its current quarterly dividend.
"We continued to execute on our growth strategies this past quarter, resulting in solid growth in sales and premiums and deposits across a number of our businesses and geographies," Chief Executive Officer, Donald A. Stewart, said.
"Strong momentum continued in our Canadian businesses, spurred by a significant increase in sales of individual life and health insurance, fixed income products and annuities," he said. "SLF Canada has also seen strong growth in our pension rollover business and in national account sales by our Group Benefits unit.
"In the U.S., sales of variable annuities rose 7% compared to the same period last year due to improved productivity among wholesalers and our increased investment in marketing and brand," Mr. Stewart said.
"Earnings at MFS, our U.S.-based asset manager, were very strong compared to the same period last year, primarily due to higher average net assets.
"While our reported earnings were impacted adversely by declining equity markets and lower interest rates, the impact was in-line with our published market risk sensitivities.
"Sun Life continues to take action to mitigate the impact of volatile economic and market factors, including changing product design and mix to reduce risk and increase profit while continuing to meet the needs of clients as well as a continued focus on expense management.
"We are continuing our strong focus on risk management and prudent capital management, and continue to make strategic investments in our businesses," Mr. Stewart concluded. "Our underlying businesses are strong and we are poised to capitalize on economic and market improvements."
The following were notable activities across Sun Life Financial during the second quarter of 2010.
Creation of a new mutual fund company in Canada harnesses Sun Life Financial's global capabilities
- Sun Life Financial announced it is creating a new mutual fund company
that will bring a family of world-class mutual funds to Canadians.
Sun Life Global Investments (Canada) Inc. will develop and manage
funds to be launched in the fall of 2010. It will feature fund
products sub-advised by MFS Institutional Advisors Inc., Sun Capital
Advisers LLC, Sun Life Assurance Company of Canada, McLean Budden
Limited and various other strategic partners.
New products launched in key markets add to diversified product line-up
- In Canada, two new Sun Participating products were launched in June,
providing solutions to Canadians seeking to protect their families,
save for retirement or optimize their estate planning.
- In the U.S., a current assumption universal life product, Sun
AccumULator(SM), was launched in June. The product offers tax-
advantaged cash accumulation potential, income tax-free withdrawals
and loans to help meet supplemental retirement income needs, college
expenses or other income needs.
- In Indonesia, CIMB Sun Life launched "X-Tra Choice", a single premium
unit-linked product, the first product launched through its
bancassurance channel. It also launched an education endowment
product which is distributed through its telemarketing channel.
Awards recognize strong performance and operations at MFS
- A Morningstar study of the 30 largest U.S. mutual fund companies
published in June gave high marks to MFS. Companies were ranked on
the basis of investment performance, manager retention, manager
tenure and manager investment levels, as well as an assessment of
firm stewardship. MFS was ranked fifth overall, fifth in stewardship
and third for three-year investment returns.
- At the Financial News' Europe 2010 Annual Awards for Excellence in
Client Service, MFS received the award for Client Service Team of the
Year and scored the highest mark among all categories and nominees
from 20 countries.
Sun Life Financial earns recognition for its corporate social responsibility and business practices
- The Globe and Mail's 2010 Report on Business Corporate Responsibility
ranked Sun Life Financial as the leading financial services company
on the Toronto Stock Exchange 60 for corporate responsibility, and
- Sun Life Financial was named one of the top 20 most reputable
companies in Canada, making it the highest ranking insurance company
in the country based on a study by the Reputation Institute and
published in Canadian Business magazine.
- The 2010 Reader's Digest Trusted Brand consumer survey named Sun Life
Financial the "Most Trusted Life Insurance Company" in Canada.
Product quality, customer service and brand experience scored high
among poll respondents who chose the Company as their most trusted
brand of life insurance.