Manulife Financial boosts dividend for 1st time in 5 years

Five years after slashing its dividend in half to save money, Manulife Financial is starting to restore its once-prized dividend to the level it was prior to the financial collapse.

Canada's biggest life insurer said it will boost its dividend 19 per cent to 15.5 cents a share. That's its first increase since a dramaticcut to 13 cents a share in 2009 in an effort to save $800 million a year.

Manulife'sdividend boostcame as it reported that second-quarter profits that more than tripled to $943 million, or 49 cents a share.

The company credits growth in assets under management for part of the improvement, along with improved insurance operations in Asia and better wealth management performance in North America.

"Our wealth results were strong, driven by the success of our North American mutual fund businesses and improved momentum in Asia," said CEO Donald Guloien in a statement. "Most notably, we generated strong sales growth in Japan and in other parts of Asia."

But he added that insurance sales in Canada were "lower than what we would have liked."

Early dividend hike

The dividend hike came as somewhat of a surprise, as the company had not been expected to raise it until 2015.

Manulifechief financial officer Steve Roder told Reuters thatthe company decided to hike the dividend early because ofa faster-than-expected dropin the company's leverage ratioand growing comfort with the regulatory environment.

"As we move closer to the $4billion (target for annual core profit), we would hope to have incremental step-ups in the dividend," Rodertold the news agency.

Manulife wasn't the only life insurer to report a healthier bottom line.

After markets closed Wednesday, Sun Life Financial reportedoperating net income, excluding certain items and discontinued operations, of $488 millionor 80 cents ashare. That wasup from $431 million, or 71 cents ashare, in the second quarter of 2013. That beat analyst estimates of 66 cents a share.

Great-West Lifecoreported net income of $615 millionin the second quarter, an18 per cent increase from the same time last year. Its profits were helped by its acquisition of the Irish Life Group last year.

Manulife shares slipped 27 cents to close at $21.70 on Thursday; Sun Life shares were down $1.05 to $40.10; Great West Lifeco stock shed four cents to close at $31.40.