Manulife Financial Corp (MFC)

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Manulife Financial Corporation (MFC)

May 21, 2013 8:45 am ET


Stephen Bernard Roder - Chief Financial Officer and Senior Executive Vice President


John Aiken - Barclays Capital, Research Division


John Aiken - Barclays Capital, Research Division

Well, ladies and gentlemen, we're going to kick off the Canadian financial services portion of the America's Select Conference.

I'm very happy to have Steve Roder, who's the Senior Executive Vice President and Chief Financial Officer of Manulife Financial. Steve, as he tells me, or has corrected me, is coming up on his first anniversary. He's supposed to walk out -- or actually was just passed his first anniversary with Manulife.

Prior to joining Manulife, Steve was CFO at AIA group through a transition period, I guess, well, I will call it, which capped off 16 years as a partner at KPMG, which ultimately culminated him in heading the Asia Pacific financial services practice for the firm. Anyway, Steve, thank you very much for joining us. We very much look forward to your presentation.

Stephen Bernard Roder

Thank you, John, and thanks for taking the time to come in and listen to this presentation. Ladies and gentlemen, a pleasure to be here. I think this is actually the first time I presented back in my hometown since I joined Manulife, so a special pleasure. And the joke back home is that I'm the other half of the swap trading that involving Mark Carney, the new governor of the Bank of England. And the committees [ph] are not very happy. So let's see how we go. Okay. So I know this is the first time we've presented at this conference in a plenary session. So I'm going to keep this relatively high level with a very quick sort of overview of Manulife. And apologies for those of you who've already done your deep dives. And I will try and leave some time in the end to answer any questions you may have. So let's start off with a sort of recap of where it is that Manulife is trading.

So firstly, Manulife is the sort of iconic financial services company in Canada. It's been present there for 125 years. It's 100% brand recognition, and as I say, an icon of the economy. So we're trading in our home economy of Canada. The secondary area we're trading is in the United States, where we are -- we trading under the name John Hancock. John Hancock was acquired by Manulife in 2004, and it's an iconic brand name in the United States. So our second trading division, the United States. Third trading division is Asia. Manulife's actually been present in Asia for rather a long time. Manulife started its operations in Asia 115 years ago. Someone from Canada had the bright idea of showing up in Hong Kong in 1897 and we now have a footprint across the Asian region, which is essentially everywhere other than Korea and India. You can look at it that way. We're everywhere other than Korea or India, apart from one 1 or 2 places that we probably can't even remember the names of. So we have a pretty broad footprint. I think if you had a bunch of analysts in the room, it wouldn't take them very long to conclude we've got probably the #3 platform in Asia. I think it's fair to say. Add to that the fact that we have a global asset management business and we've been building out our global asset management capability. So we have professionals in 17 countries, we have global fixed income capability and we have some special classes where we have a particular reputation for expertise, and I'll show you a little bit of that later on. So in summary, you could say we're in the 3 largest economies in the world, we're in the sort of safe haven of Canada of our home economy, and we're in the growth economies of Asia.

If you look at our core earnings, what's changed over the last few years since the Asian piece has become bigger? So if you go back about 5 years, you'll see that the Asian share of core earnings was in the mid-20s-percent. In 2012, it actually reached to 38%. And as we go forward, I'd expect this to be sustainable and to increase. In fact, in 2012, it's priced a little bit on the upside in terms of the percentage. But on a go-forward basis, we expect it to be the biggest division. So this is a very significant business for us, the Asian division. It's not a hobby that we do on the side. It's not something we've started to think about in the last 2 years.

Manulife has been a significant player in the region for sometime, but we're benefiting effectively from the activity that's been put into the region and also the massive transformation of that region [ph] and the emergence of the middle class in that region in absolutely massive quantities.

So we're benefiting from the Asian growth story and it's a central piece of our strategy.

On the right hand side, you'll see the division as we define it between Insurance and Wealth. And this is remaining -- it's remained fairly stable in the recent past, and we think it will remain fairly stable as we move forward, and we're quite happy with that. We -- it's quite nice to have that sort of balanced portfolio between the Insurance protection on one side and Wealth on the other.

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