A boatload of firms reported Q4 earnings yesterday and today. Here are a few of the wealth management highlights.
Home Capital Group
There was no bigger number to announce then the top-line result for the year ended December 31, 2014. CEO Gerald Soloway commented on its performance, “Total revenue exceeded $1 billion in 2014, reaching a significant milestone, reflecting solid fundamentals, the commitment of the Home Capital team, and continued success in growing our market share.”
Another key number that experienced a good year-over-year improvement is its Tier 1 Capital Ratio which jumped 150 basis points to 18.3%. Not only is Home Capital Group growing the top- and bottom-line but it’s doing so while bolstering its financial position.
While it was a good year for Home Capital in terms of its 2014 targets, the one big exception is adjusted net income, which missed the 13% target by 110 basis points. The shortfall caused by a very competitive marketplace in prime insured mortgages.
All in all, score 2014 a success.
With a name like Wealth Professional, wealth management is the first place we look when examining financial reports. Sun Life is no different.
It generated $20.4 billion in wealth-related revenue in 2014, 30% higher year-over-year. Fee income in the wealth management division increased 21% in 2014 to $4.1 billion. Wealth products now represent 43% of new business for Sun Life compared to 57% for protection products. Its reliance on wealth products continues to gain momentum.
Another couple of numbers to focus investor attention are assets under management which hit $734 billion this past year, 15% higher than in 2013. MFS, its U.S.-based global asset manager finished 2014 with muted growth and AUM of US$431 billion. However, operating income on both sides of the border saw healthy increases in 2014.
Sun Life CEO Dean Connor sums up its year, “We are pleased to announce strong growth in our full year underlying earnings, up 15% from the previous year despite a challenging fourth quarter, and we are on track to exceed our 2015 earnings objective.”
The insurer achieved record wealth sales in 2014 of $52.6 billion with Asia being a big part of that growth. The fourth quarter was the wealth management division’s 25th consecutive quarter of growth in AUM. This past year it brought $18 billion in net inflows into the asset management and group retirement businesses.
Thanks in part to the performance of the wealth management business, Manulife generated $2.9 billion in 2014 core earnings, 10% higher than in 2013.
With two acquisitions under its belt in 2014 – the purchase of Standard Life’s Canadian operations as well as the retirement plan services business in the U.S. from New York Life – Manulife is poised for future growth in 2015.
Two numbers standout for CI in 2014.
The first being a 13% increase in assets under management to $103 billion. Some of that you can chalk up to the healthy markets. However, net sales, an important metric when assessing growth, increased by $200 or 5.4%. Any way you slice that’s good.
The other impressive number is free cash flow which increased 19% year-over-year to $148.3 million. CI is definitely generating a lot of cash from its asset management business. Another indication its business is operating at high efficiency is adjusted earnings per share, which grew 23% to $1.83.
There’s nothing to report that’s remotely negative for CI shareholders.
CEO Stephen MacPhail sums it up nicely stating, “Two thousand and fourteen was another excellent year for CI.”
Indeed it was.