Manulife earnings slip in Q2

Manulife Financial Corporation’s core earnings declined in Q2 amid volatile markets and movements in interest rates.

Core earnings were $833 million in the quarter that saw the U.K. vote to leave the EU. That was down from $902 million in the same period a year earlier.

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“While both core earnings and net income this quarter were disappointing, having been impacted by the sharp decline in interest rates and heightened market volatility, I am pleased with how resilient our underlying businesses remained. Our key drivers of growth are continuing to perform very well,” Donald Guloien, chief executive, says in a statement Thursday.

In a release, as the company posted its Q2 results, Manulife adds: “The decrease in core earnings reflected the absence of core investment gains in 2Q16, higher expected macro hedging costs and lower earnings on surplus assets, partially offset by the impact of foreign currency rates.”

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The company says the quarter finished with a strong capital position bolstered by bond offerings in Singapore and Taiwan, which is part of its strategy to diversify funding sources and expand its investor base. Manulife says it is completing a Q3 annual review of actuarial methods that could result in a post-tax charge of up to $500 million.

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