Manulife profit falls 43% on losses in oil and gas

Manulife Financial Corp., Canada's biggest insurer, reported a 43 per cent drop in quarterly profit on Thursday as it took losses on oil and gas investments.

Net income in the third quarter was $622 million, or 30 cents a share, down from $1.1 billion, or 57 cents, a year earlier, the Toronto-based firm said Thursday. Profit excluding some items was43 cents a share, missinganalysts' estimates of 45 cents a share.

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In the year to date, Manulife has lost $626 million on its oil and gas holdings, which make up a very small part of its portfolio, largely offset by $457 million of gains from other invested assets.

The insurer took a $220 million charge in the quarter for its oil and gas investments.

Manulife said its third quarter losses on investments contrasted with a very strong quarter in the stock market last year, but said it had no plans to abandon investment in the energy sector.

"Despite weak oil and gas performance throughout 2015, we remain committed to this sector and it is our view that oil prices are currently below the economic level required to meet demand on a long-term basis," said Warren Thomson, chief investment officer, in a news release.

The insurer enjoyed strong results in its insurance sales and wealth management divisions, driven in part by its expansion in Asia.

Earnings from insurance rose 12 per cent compared to last year to $803 million, with a 19 per cent increase on Asian insurance sales.

Wealth management net flows rose 82 per cent to $4.5 billion, driven by strong results in the U.S. and Canada and helped by the favourable exchange rate.

Manulife has bought Standard Chartered Bank's retirement and pension business in Hong Kong in a deal to close in the first half of 2016.

It also signed a 15-year regional distribution agreement with DBS to provide insurance products in Singapore, Hong Kong, Indonesia and mainland China beginning Jan. 1.