Sun Life Profit Tops Estimates as Rising Stocks Help Fund Unit

Bookmark

Sun Life Financial Inc., Canada’s second-largest life insurer by market value, is benefiting from stock-market fueled gains in its asset-management business.

  • Net income from the asset-management business increased 17% from a year earlier to C$267 million ($210 million) in the fourth quarter. Sun Life’s assets under management swelled 13% to C$1.25 trillion.

Key Takeaways

  • Sun Life has been working to expand and diversify its asset-management business, and surging global equity markets have provided a tailwind for the unit over the past year. Sun Life’s MFS Investment Management, which serves individual and institutional investors around the world, saw net inflows of C$1.9 billion last quarter. SLC Management, which serves institutional clients in North America, had C$900 million of inflows.
  • Asia has been another area of emphasis for Chief Executive Officer Dean Connor, who’s stepping down in August after leading the firm for a decade. While both insurance and wealth sales in Asia rose in the quarter, net income fell 2.9%, hurt by an impairment charge related to a fund the company manages through a joint venture in India. That compares with a 39% earnings increase in Asia in the third quarter.
  • The low interest-rate environment arising from central banks’ efforts to stimulate their economies has weighed on Sun Life’s business -- and continued to do so in the fourth quarter. Interest-rate impacts dented profit by C$74 million in the quarter.

Market Reaction

  • Sun Life’s shares have risen 9.1% this year. That compares with a 5.9% gain for the S&P/TSX Composite Index.

Get More

  • Underlying net income totaled C$862 million, or C$1.47 a share, beating analysts’ C$1.39 average estimate. Net income rose 3.5% to C$744 million.
  • Click here for more on Sun Life’s fourth-quarter results.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.