BUSINESS

Sun Life Financial reports second-quarter profit up from year ago

08/07/2013 06:05 EDT | Updated 10/07/2013 05:12 EDT
TORONTO - Sun Life Financial Inc. (TSX:SLF) said Wednesday it earned $399 million in its latest quarter, up from a year ago, helped by strong sales, rising interest rates and favourable credit experience.

The insurer said the profit amounted to 65 cents per share in its latest quarter, up from $90 million or 15 cents per share a year ago.

Sun Life president and chief executive Dean Connor said the company had a very strong quarter.

"Wealth sales and insurance sales each recorded increases of 32 per cent and assets under management grew almost $58 billion to over $590 billion," Connor said in a statement.

"We also benefited from favourable market conditions."

Adjusted revenue was $5.5 billion compared with $4.8 billion in the second quarter of 2012 helped by higher net premium revenue, increased fee income and higher investment income.

The results followed the sale of the company's U.S. annuity business last week to Delaware Life Holdings.

Excluding that business, Sun Life reported an operating profit from continuing operations of $431 million or 71 cents per share compared with $250 million or 42 cents per share in the second quarter of 2012.

In an update to its outlook following the sale, Sun Life said it expects annual operating net income of $1.85 billion by the end of 2015 compared with $2 billion before the sale of the U.S. annuity business.

"The recent completion of the sale of our U.S. annuity business is a transformational transaction, which significantly reduces Sun Life Financial's risk profile and earnings volatility," Connor said.

"Our U.S. operations are now focused on our successful employee benefits business and our voluntary benefits business, which have achieved substantial growth during the past two years."

In Canada, the company earned an operating profit of $210 million in the second quarter, compared with $186 million in the second quarter of 2012.

Meanwhile, the insurer's U.S. operations earned an operating profit of $143 million including the annuity business compared with a loss of $147 million a year ago. Operating profit at its continuing operations totalled $115 million, up from $8 million.

MFS Investment Management earned an operating profit of $104 million, up from $68 million.