Financial stock to watch: Manulife Financial Corporation (NYSE: MFC)

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Manulife Financial Corporation (NYSE: MFC) stock rose over 2.2% on 7th May, 2020 (as of 12:21 pm GMT-4; Source: Google finance) after the company posted better than expected earnings for the first quarter of FY 20. MFC’s adjusted or core earnings plunged in the same time period by 34 per cent to $1 billion from $1.5 billion. In Asia, the company had increased the digital capabilities and supported the customers by extending the use of non-face-to-face sales methods across most of our businesses. The company has provided limited additional benefit coverage and extended premium payment grace periods. In Canada, the company has provided a temporary extension of emergency out-of-country coverage for the group and individual customers who experienced travel delays and introduced flexible financial solutions to support the banking clients. In the U.S., the company has extended the grace period for the life insurance policyholders to make premium payments and increased the payout limits permitted through phone for the annuity and life customers. Further, in the Global Wealth and Asset Management business in Canada, the company has launched an online cash withdrawal feature, which will allow the members to have a safe and reliable way to directly access their retirement plans and in the U.S., the company has temporarily waived the fee for 401k hardship withdrawals.

Moreover, the company got the benefit from the Annuity Guaranteed Minimum Withdrawal Benefit offer program, recognized impacts from the sale of alternative long-duration assets (“ALDA”) enabled by the reinsurance of individual and group payout annuity policies, and expanded reinsurance coverage of certain universal life no lapse guarantee products. In total, these initiatives has led to additional capital benefits of $265 million during the quarter.

Additionally, the company has reported New business value (NBV) of $469 million in 1Q20, which reflects a decline of 11% compared with 1Q19. In Asia, NBV fell by 14% to $356 million as growth in Hong Kong and Asia Other was more than offset by a decline in Japan. In Canada, NBV was up 24% to $77 million from 1Q19, due to higher sales across all business lines. In the U.S., NBV fell by 23% to $36 million from 1Q19, mainly due to the impact of lower sales volumes and a less favorable business mix.

MFC in the first quarter of FY 20 has reported the adjusted earnings per share of 64 cents, beating the analysts’ estimates for the adjusted earnings per share of 59 cents, according to financial markets data firm Refinitiv.

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