Manulife Financial reports 15.8 per cent return on shareholders equity

TORONTO Manulife Financial Corporation reported shareholders net income of $336 million for the first quarter of 2003, up slightly from $335 million in 2002. The positive impacts of good business growth, particularly in the Asian and Reinsurance Divisions, tight management of expenses and favourable claims experience in Canadian Group Benefits were moderated by the negative influences of continued depressed equity markets on the Companys wealth management businesses and a stronger Canadian dollar.

In addition, earnings this quarter were impacted by one-time costs associated with the proposed Canada Life acquisition and the first-time expensing of stock-based compensation.

First quarter earnings per share were $0.73, an increase of four per cent from the $0.70 reported last year. Return on shareholders equity was 15.8 per cent compared to 16.3 per cent for the same period last year.

Premiums and deposits were up four per cent to $7.9 billion for the first quarter compared to $7.6 billion in the first quarter of 2002. Excluding the impact of a strengthened Canadian dollar, first quarter premiums and deposits increased by eight per cent. Funds under management were $141.6 billion as at March 31, 2003.

I am pleased that we were able to perform so well this quarter given the extremely challenging conditions that prevailed during the period, said Dominic DAlessandro, President and Chief Executive Officer of Manulife Financial. Our diversified business base and our prudent approach to investments and risk management have been the key to our ability to deliver solid results and are why I continue to remain optimistic about our prospects for the future.

As a result of Manulifes focus on cost controls and investment portfolio credit quality, we have delivered good earnings this quarter, said Peter Rubenovitch, Executive Vice President and Chief Financial Officer. We launched innovative new products in many of our markets, invested in several new customer service initiatives, continued to expand the size and diversification of our distribution structure, and reduced expenses despite good growth in business volumes.

FINANCIAL PERFORMANCE

Net Income

Manulife Financial Corporation reported shareholders net income of $336 million for the first quarter ended March 31, 2003, up slightly from $335 million in 2002 despite the impact of continued depressed equity markets on the Companys wealth management businesses, including its effect on segregated fund guarantee reserves and fee income, and the negative impact of a strengthened Canadian dollar. In addition, the Company incurred $15 million after tax of one-time expenses related to the proposed acquisition of Canada Life, realized strong oil and gas income, and in the quarter, began expensing stock-based compensation. Earnings in the quarter were also impacted by good business growth, tight management of expenses, and favourable claims experience in Canada, partially offset by claims results in the U.S. which, while favourable, were lower than the strong experience of a year ago.

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