Manulife Financial Corporation reports strong second quarter sales and increased shareholder dividends



    TSX/NYSE/PSE: MFC; SEHK: 0945

    TORONTO, Aug. 7 /CNW/ - Manulife Financial Corporation today reported
quarterly shareholders' net income of $1,008 million and fully diluted
earnings per share of $0.66, compared to net income of $1,102 million and
fully diluted earnings per share of $0.71 for the same period last year.
Return on common shareholders' equity(1) was 17.0 per cent in the second
quarter of 2008, compared to 18.5 per cent in 2007. The Company also announced
an increase in the quarterly shareholders' dividend from $0.24 per common
share to $0.26 per common share.
    "We are pleased with our performance particularly given the very volatile
and unsettled markets that prevail. This quarter we again experienced
excellent sales results with all of our businesses contributing to a robust
growth in new business embedded value," said Dominic D'Alessandro, President
and Chief Executive Officer. "Our strong balance sheet, excellent distribution
capabilities and leading market shares, position us well to compete in all
market conditions."
    Premiums and deposits amounted to $17.3 billion in the second quarter of
2008. Growth over the same quarter of 2007 was 11 per cent on a constant
currency basis, driven by strong sales and growth in recurring premiums and
deposits. Excluding currency movements, Insurance and Wealth Management sales
were up 18 and 14 per cent respectively. These strong results generated a
record second quarter new business embedded value of $562 million, a growth of
15 per cent over the prior year.
    "Compared to the same quarter of last year, weak U.S. and Hong Kong
equity markets, higher strain on increased sales, the strengthening of the
Canadian dollar and tax related provisions reduced earnings by approximately
$250 million," noted Peter Rubenovitch, Senior Executive Vice President and
Chief Financial Officer. "However, operating results are excellent, our credit
experience remains quite satisfactory and our expenses are under good
control."
    Total funds under management as at June 30, 2008 were $400.3 billion,
$10.3 billion lower than last year. The positive impact of net policyholder
cash flows is overshadowed by a $21 billion decline due to the turbulent
market and $10 billion due to the strengthened Canadian dollar.

    
    (1) Return on common shareholders' equity is calculated excluding
        Accumulated Other Comprehensive Income on available-for-sale
        securities and cash flow hedges.

    OPERATING HIGHLIGHTS

    United States

    -   John Hancock Life ranked No.1 in U.S. individual insurance sales for
        the third consecutive quarter(2) and gained market share while
        industry sales were flat over the same period. Sales in the second
        quarter were up 22 per cent over the prior year, with significant
        increases across all distribution channels and major product lines.
        In particular, variable life products grew 26 per cent amid turbulent
        equity markets and declining industry sales. These results were
        driven by the successful execution of the business' core strategy of
        product development, distribution, underwriting and new business
        service.

    -   John Hancock Variable Annuities enhanced its top selling Income Plus
        for Life rider by introducing new product features and adding new
        investment options from leading independent investment managers,
        including Dimensional Fund Advisors, T. Rowe Price and Wellington
        Management.

    -   John Hancock Long Term Care maintained its industry-leading sales
        market share, ranking No.1 in Group and No.2 in Retail long-term care
        insurance sales(2). The Custom Care flagship product was enhanced to
        include new caregiver support services, consumer protection
        provisions and a compound inflation option linked to the Consumer
        Price Index (CPI).

    -   John Hancock Retirement Plan Services launched a new optional rider,
        called Guaranteed Income for Life, designed exclusively for the
        401(k) market. The new option helps plan members protect and build
        their retirement savings through a guarantee offering upside
        potential, downside protection and a source of income for life.
        Guaranteed Income for Life has received a very favourable market
        response, with over 200 plans sold in the quarter.

    -   John Hancock Mutual Funds experienced its second highest quarter of
        open-end fund sales on record, with sales of US$2.5 billion in the
        quarter, up 31 per cent over the second quarter of 2007. Strong
        performance in a number of key funds, the addition of several new
        business partners and a more tenured sales force drove the increase
        in sales and led the business to the highest net customer cash flows
        in the last eight quarters. During the quarter, the business also
        completed the refinancing and redemption of all of the outstanding
        Auction Rate Preferred Securities (ARPS) on its leveraged closed-end
        funds.

    Canada

    -   Individual Life reported its second best sales quarter ever, with
        sales up 14 per cent over the second quarter of 2007. All major
        product lines contributed to the strong result, with good market
        reception to the recently launched non-participating whole life
        product, Performance Gold.

    -   Individual Wealth Management continued to generate strong sales
        momentum, with segregated fund sales exceeding $1.1 billion in the
        quarter, up 34 per cent from a year ago. Growth was driven by GIF
        Select/IncomePlus, where deposits to date have surpassed $5 billion,
        less than 20 months since the product's launch.

    -   ManulifeOne, the home-collateralized line of credit product offered
        by Manulife Bank, posted a new quarterly record, exceeding $1 billion
        in new loans. This drove a 33 per cent year-over-year growth in
        overall new loan volumes.

    -   Manulife Mutual Funds announced its alliance with Mawer Investment
        Management Limited ("Mawer") for a new suite of co-branded retail
        mutual funds. This exclusive distribution arrangement offers
        investors access to the award-winning investment expertise and strong
        investment performance of Mawer through seven new fund mandates.

    -   Group Savings and Retirement Solutions launched Group IncomePlus in
        June, with very favourable response from advisors. Leveraging the
        product design of the successful individual retail IncomePlus
        product, this is the first guaranteed minimum withdrawal benefit
        option specifically designed for group retirement savings plans in
        Canada

    Asia and Japan

    -   Japan reported very strong sales growth in both variable annuities
        and insurance products. Variable annuity sales in the quarter more
        than doubled the prior year, up 139 per cent, driven by broadening
        distribution channels and continued strong sales of the new
        generation product launched in mid 2007. Insurance sales in the
        quarter nearly doubled versus the prior year, partially driven by new
        product launches, including a new cancer insurance product which was
        introduced in the quarter.

    -   Hong Kong individual insurance sales for the quarter were up
        12 per cent while pension sales were 14 per cent higher than the
        second quarter of 2007. Insurance sales growth was partially
        attributable to product enhancements and marketing campaigns while
        pension sales growth was driven by strong sales in the Preserved
        Account market. During the quarter, the wealth business also launched
        several new funds, including the first-ever sector-based MPF fund,
        several emerging market funds and a Contrarian fund, providing a
        wider selection of fund choices that cater to different investment
        needs and objectives.

    -   Other Asia Territories insurance sales for the quarter were up
        29 per cent over the second quarter of 2007, driven by strong
        bancassurance and agency sales in Singapore and higher sales in China
        stemming from newly opened sales offices.

    -   Manulife Financial continued to expand its operations in China and in
        the second quarter received an additional license, bringing the total
        number of licenses up to 31, the most of any foreign life insurance
        company in China.

    Corporate

    -   In a separate news release, the Company also announced today that the
        Board of Directors approved an increase to the quarterly
        shareholders' dividend to the amount of $0.26 per share on the
        common shares of the Company, payable on and after September 19, 2008
        to shareholders of record at the close of business on August 19,
        2008.

    Awards & Recognition

    -   Manulife Financial received recognition from several organizations in
        the quarter, including the following:

        -  Hong Kong was awarded the Sing Tao 2007 Excellent Services Brand
           Award for the 2nd consecutive year, the East Week 2008 Hong Kong
           Service Award for the 3rd consecutive year, and the Reader's
           Digest Trusted Brands Gold Award for the 5th consecutive year. All
           awards were accolades for consumer trust, service excellence and
           community involvement.

        -  Manulife had the distinction of being the highest ranked Canadian
           company in Brand Finance's Global 500. In both Brand Finance's
           Global 500 and Interbrand's Best Canadian Brand, Manulife
           Financial was recognized for product innovation and cross selling,
           and as a leader in brand value creation among its peer group.

    (2) Based on the most recently available industry data per LIMRA
        International's sales survey results for respective categories.


    MANAGEMENT'S DISCUSSION AND ANALYSIS

    Financial Highlights
    (unaudited)
                                                       Quarterly Results
                                                  2Q08       1Q08       2Q07
                                               ------------------------------
    Shareholders' Net Income (C$ millions)       1,008        869      1,102
    Diluted Earnings per Common Share (C$)        0.66       0.57       0.71
    Return on Common Shareholders' Equity
     (%, annualized)                              17.0       15.1       18.5
    Premiums & Deposits (C$ millions)           17,262     17,778     16,438
    Funds under Management (C$ billions)         400.3      400.1      410.6
    Capital (C$ billions)                         28.3       28.4       28.6
    

    Net Income
    ----------
    The Company's shareholders' net income for the second quarter of 2008 was
$1,008 million, down nine per cent from $1,102 million reported a year
earlier. Growth in earnings from a higher insurance in-force base, improved
claims experience and gains from higher interest rates and credit spreads
along with gains on private equity investments, were more than offset by
increased upfront charges from the growth in insurance sales, less favourable
credit and equity market experience, tax related charges on leveraged lease
investments and the strengthened Canadian dollar. The decline in equity
markets, primarily in the U.S. and Hong Kong, over the last few quarters have
resulted in lower asset driven fee income. Although credit experience remains
satisfactory, this compares to unusually strong results in the second quarter
of 2007. In addition, with approximately 70 per cent of our income denominated
in foreign currencies, primarily the U.S. dollar, the strengthened Canadian
dollar reduced earnings by $41 million. Year-to-date shareholders' net income
was $1,877 million compared to $2,088 million in 2007.

    Diluted Earnings per Share and Return on Common Shareholders' Equity
    --------------------------------------------------------------------
    Second quarter diluted earnings per common share was $0.66, down
seven per cent from $0.71 in 2007. Return on common shareholders' equity was
17.0 per cent for the three months ended June 30, 2008, a decrease of
150 basis points from 18.5 per cent for the three months ended June 30, 2007.
Return on common shareholders' equity is calculated excluding Accumulated
Other Comprehensive Income on available-for-sale securities and cash flow
hedges. (See page 9 for discussion of non-GAAP measures).

    Premiums and Deposits
    ---------------------
    On a constant currency basis, premiums and deposits grew 11 per cent due
to higher sales by the Japan Variable Annuity, John Hancock Mutual Funds and
Canadian Individual Wealth Management businesses along with growth in all the
insurance businesses. Premiums and deposits as reported in Canadian dollars
for the quarter were $17.3 billion, an increase of five per cent from
$16.4 billion reported a year earlier.

    Funds under Management
    ----------------------
    On a constant currency basis, funds under management was unchanged from
last year, as business growth was offset by the effects of unfavourable equity
market performance and scheduled maturities of John Hancock Fixed
institutional products. At current exchange rates, funds under management were
$400.3 billion as at June 30, 2008, $10.3 billion or three per cent lower than
2007.

    Capital
    -------
    Total capital was $28.3 billion as at June 30, 2008, $0.3 billion lower
than $28.6 billion as at June 30, 2007. Of the $4.0 billion of net income
reported over the past twelve months, $2.7 billion was returned to
shareholders through the $1.3 billion repurchase of 32 million shares and the
payment of shareholder dividends in the amount of $1.4 billion. Capital was
further reduced by $1.8 billion as a result of unrealized losses on foreign
exchange and on available-for-sale securities charged to Other Comprehensive
Income.

    PERFORMANCE BY DIVISION

    Effective January 1, 2008 we changed our approach for allocating
investment gains and losses to be more aligned with how we manage the assets
and related risk positions. Investment gains and losses are now accumulated in
two pools - insurance and wealth management, and then allocated to the
business units based on their respective policy liabilities. Prior to 2008,
gains and losses were reported in the business units where the specific assets
giving rise to the gains and losses were located, and credit gains and losses
were reported in the Corporate and Other segment. Investment gains and losses
related to product features, such as segregated fund guarantees and future
fees assumed in variable universal life and equity-linked policy liabilities,
as well as investment gains and losses on full pass through products, such as
par insurance, are not included in the pools. Prior periods have been restated
to conform to this new presentation.

    
    U.S. Insurance

                                                       Quarterly Results
    Canadian dollars                              2Q08       1Q08       2Q07
                                               ------------------------------
    Shareholders' Net Income (millions)            223        209        196
    Premiums & Deposits (millions)               1,647      1,554      1,585
    Funds under Management (billions)             58.5       58.7       58.4
                                               ------------------------------


                                                       Quarterly Results
    U.S. dollars                                  2Q08       1Q08       2Q07
                                               ------------------------------
    Shareholders' Net Income (millions)            221        208        179
    Premiums & Deposits (millions)               1,630      1,548      1,444
    Funds under Management (billions)             57.4       57.1       55.0
                                               ------------------------------
    

    Earnings for the second quarter of 2008 were U.S.$221 million, up 23 per
cent from U.S.$179 million reported a year earlier. Improved claims experience
and solid in-force business growth, drove the increase in earnings over the
prior year. These results were partially offset by higher new business strain.
On a Canadian dollar basis, earnings for the second quarter were $223 million,
up $27 million from $196 million reported a year earlier. Year-to-date
earnings were $432 million compared to $378 million in 2007.
    Premiums and deposits for the quarter were U.S.$1.6 billion, up 13 per
cent from U.S.$1.4 billion reported in the second quarter of 2007. Sales
increases of 22 per cent in John Hancock Life along with growth in renewal
premiums from both John Hancock Life and John Hancock Long Term Care
contributed to the increase. On a Canadian dollar basis, premiums and deposits
for the quarter were $1.6 billion, up four per cent from the second quarter of
2007.
    On a U.S. dollar basis, funds under management grew by four per cent or
U.S.$2.4 billion to U.S.$57.4 billion. The increase from strong business
growth was partially offset by equity market declines on John Hancock Life's
segregated funds. Funds under management on a Canadian dollar basis were
$58.5 billion, consistent with the amount reported as at June 30, 2007, which
reflects the impact of the change in foreign exchange rates offsetting the net
gains noted above.

    
    U.S. Wealth Management

                                                       Quarterly Results
    Canadian dollars                              2Q08       1Q08       2Q07
                                               ------------------------------
    Shareholders' Net Income (millions)            271        149        257
    Premiums & Deposits (millions)               8,648      9,180      8,839
    Funds under Management (billions)            172.7      173.8      190.5
                                               ------------------------------


                                                       Quarterly Results
    U.S. dollars                                  2Q08       1Q08       2Q07
                                               ------------------------------
    Shareholders' Net Income (millions)            268        148        235
    Premiums & Deposits (millions)               8,561      9,142      8,054
    Funds under Management (billions)            169.5      169.1      179.2
                                               ------------------------------
    

    Earnings for the second quarter of 2008 were U.S. $268 million, up 14 per
cent from U.S. $235 million reported a year earlier. The favourable pooled
investment results were partially offset by the non recurrence of gains on
segregated fund guarantee reserves reported in the prior year. On a Canadian
dollar basis, earnings for the second quarter were $271 million, up
$14 million from $257 million reported a year earlier. Year-to-date earnings
were $420 million compared to $592 million in 2007.
    Premiums and deposits for the quarter were U.S. $8.6 billion, up six per
cent from U.S. $8.1 billion reported in the second quarter of 2007. John
Hancock Mutual Funds achieved a 31 per cent growth in sales from improved
investment performance in several key funds and from expanded distribution.
John Hancock Variable Annuities experienced lower sales due to volatile equity
markets and strong product competition in the variable annuities market. On a
Canadian dollar basis, premiums and deposits for the quarter were
$8.6 billion, down two per cent from $8.8 billion reported in the second
quarter of 2007.
    On a U.S. dollar basis, funds under management declined by five per cent,
or U.S. $9.7 billion, to U.S. $169.5 billion as at June 30, 2008. The impact
of unfavourable equity markets and scheduled maturities in John Hancock Fixed
Products over the last twelve months were largely offset by business growth.
Funds under management on a Canadian dollar basis decreased by nine per cent,
or $17.8 billion, to $172.7 billion as at June 30, 2008.

    
    Canadian Division

                                                       Quarterly Results
    Canadian dollars                              2Q08       1Q08       2Q07
                                               ------------------------------
    Shareholders' Net Income (millions)            302        254        297
    Premiums & Deposits (millions)               4,090      3,990      3,569
    Funds under Management (billions)             87.6       85.8       82.6
                                               ------------------------------
    

    Canadian Division's shareholders' net income for the second quarter of
2008 was $302 million, up $5 million from $297 million reported a year
earlier. Earnings reflected favourable investment returns and business growth
dampened by strain from continued strong sales in Individual Insurance.
Year-to-date shareholders' net income was $556 million compared to $535
million in 2007.
    Premiums and deposits for the quarter were $4.1 billion, up 15 per cent
from the second quarter of 2007. Segregated fund deposits rose 27 per cent led
by the sales success of GIF Select/IncomePlus, Individual Wealth Management's
guaranteed withdrawal benefit product. Growth in general fund premiums was
driven by sales in Individual Insurance and competitive positioning of
guaranteed wealth management products.
    Funds under management grew by six per cent, or $5 billion, to
$87.6 billion as at June 30, 2008. The growth was driven by Manulife Bank's
continued success in mortgage lending products, which contributed over half of
the increase, and growth in segregated funds assets from strong net sales
offset by the impact of market volatility over the past twelve months.

    
    Asia and Japan Division

                                                       Quarterly Results
    Canadian dollars                              2Q08       1Q08       2Q07
                                               ------------------------------
    Shareholders' Net Income (millions)            215        186        236
    Premiums & Deposits (millions)               2,590      2,670      2,182
    Funds under Management (billions)             43.7       44.6       39.2
                                               ------------------------------


                                                       Quarterly Results
    U.S. dollars                                  2Q08       1Q08       2Q07
                                               ------------------------------
    Shareholders' Net Income (millions)            212        186        215
    Premiums & Deposits (millions)               2,565      2,658      1,989
    Funds under Management (billions)             42.9       43.4       36.9
                                               ------------------------------
    

    Asia and Japan Division's shareholders' net income for the second quarter
of 2008 was U.S. $212 million, down U.S. $3 million from U.S.$215 million
reported a year earlier. Higher earnings from the 46 per cent growth in the
Japan variable annuity business was more than offset by lower fee income as a
result of declining equity markets in Asia and Hong Kong. On a Canadian dollar
basis, net income for the second quarter was $215 million, $21 million lower
than $236 million reported a year earlier. Year-to-date shareholders' net
income was $401 million compared to $419 million in 2007.
    Premiums and deposits for the quarter were U.S. $2.6 billion, up 29 per
cent from U.S. $2.0 billion reported in the second quarter of 2007 due to
strong variable annuity and insurance sales in Japan and increased pension
sales in Hong Kong. These increases were offset by lower mutual fund sales in
Indonesia and lower wealth management sales in Hong Kong reflecting the
turbulent equity markets. On a Canadian dollar basis, premiums and deposits
for the quarter were $2.6 billion, up 19 per cent from $2.2 billion reported
in the second quarter of 2007.
    On a U.S. dollar basis, funds under management grew by 16 per cent, or
U.S. $6.0 billion, to U.S. $42.9 billion as at June 30, 2008. Growth was
driven by strong net policyholder cash flows, most notably from continued
strong variable annuity sales in Japan. Funds under management on a Canadian
dollar basis increased by 11 per cent, or $4.5 billion, to $43.7 billion as at
June 30, 2008.

    
    Reinsurance Division

                                                       Quarterly Results
    Canadian dollars                              2Q08       1Q08       2Q07
                                               ------------------------------
    Shareholders' Net Income (millions)             46         73         68
    Premiums (millions)                            287        259        262
                                               ------------------------------


                                                       Quarterly Results
    U.S. dollars                                  2Q08       1Q08       2Q07
                                               ------------------------------
    Shareholders' Net Income (millions)             45         73         62
    Premiums (millions)                            284        258        238
                                               ------------------------------
    

    Earnings for the second quarter of 2008 were U.S. $45 million, down U.S.
$17 million from U.S. $62 million reported a year earlier. The decrease in
earnings was mainly due to a few large claims in the Life Reinsurance business
and the non-recurrence of 2007 gains on segregated fund guarantees. Improved
Property and Casualty claims experience partially offset these reductions. On
a Canadian dollar basis, earnings for the second quarter were $46 million,
down $22 million from $68 million reported a year earlier. Year-to-date
earnings were $119 million compared to $137 million in 2007.
    On a U.S. dollar basis, premiums for the quarter were U.S. $284 million,
up 19 per cent from U.S. $238 million reported in the second quarter of 2007.
The increase was largely due to a 21 per cent growth in Life Reinsurance
premiums partially due to lower experience refunds as well as the impact of
the strengthened Euro against the U.S. dollar on International Group Program
premiums. On a Canadian dollar basis, premiums for the quarter were $287
million, up 10 per cent from $262 million reported in the second quarter of
2007.

    
    Corporate and Other

                                                       Quarterly Results
    Canadian dollars                              2Q08       1Q08       2Q07
                                               ------------------------------
    Shareholders' Net Income (Loss) (millions)     (49)        (2)        48
    Funds under Management (billions)             35.3       34.7       37.2
                                               ------------------------------
    

    Corporate and Other is comprised of the Investment Division's external
asset management business, earnings on excess capital (assets backing capital,
net of amount allocated to operating divisions), changes in actuarial methods
and assumptions and other non-operating events. Also included in Corporate and
Other is the John Hancock Accident and Health operation, which consists
primarily of contracts in dispute. Funds under management include externally
managed assets and assets backing the Company's capital.
    Corporate and Other recorded a loss of $49 million for the second quarter
of 2008, a decline of $97 million from net income of $48 million reported a
year earlier. The primary drivers of the decline were lower gains realized on
available-for-sale assets and private equity holdings and a tax related charge
of $33 million on leveraged lease investments. Improved claims experience in
our John Hancock Accident and Health operations partially offset these items.
Year-to-date shareholders' net loss was $51 million compared to net income of
$27 million in 2007.
    Funds under management declined by five per cent, or $1.9 billion, to
$35.3 billion at June 30, 2008. Both the equity market performance over the
last 12 months and the strengthened Canadian dollar contributed to the
decrease in funds managed for third party clients.

    Contingencies
    -------------
    Certain elements of the Company's tax positions are contingent upon the
final resolution of tax authority audits or on the substantial enactment of
tax regulations which have currently only been issued in draft. There are
three significant tax related contingencies as at June 30, 2008.
    The Canadian tax authorities have released draft tax regulations changing
the treatment of unrealized gains and losses and the deductibility of certain
actuarial reserves. If the changes are enacted as announced, the Company will
record an increase to net income of an estimated $169 million.
    In the United States, audits concluded by the tax authorities are at
various stages of the appeals process. Should the Company be successful in
these proceedings, benefits of an estimated $107 million will accrue to the
Company.
    Also in the United States, several court cases related to the tax
treatment of leveraged leases have recently concluded in favour of the tax
authorities. The Company is an investor in leveraged leases and previously
established provisions in the amount of $178 million after tax for possible
disallowance of the tax treatment and for interest on past due taxes. During
the quarter, we increased this provision by $33 million after tax. We continue
to believe that deductions originally claimed in relation to these
arrangements are appropriate. Although not expected to occur, should the tax
attributes of our leveraged leases be fully denied, the maximum after tax
exposure including interest would be an additional estimated $382 million as
at June 30, 2008.

    Performance and Non-GAAP Measures
    ---------------------------------
    We use a number of non-GAAP financial measures to measure overall
performance and to assess each of our businesses. Non-GAAP measures include
return on common shareholders' equity, premiums and deposits and funds under
management. Non-GAAP financial measures are not defined terms under GAAP and,
therefore, are unlikely to be comparable to similar terms used by other
issuers.
    Return on equity is a profitability measure that presents the net income
available to common shareholders as a percentage of the capital deployed to
earn the income. The 2007 implementation of Canadian Institute of Chartered
Accountants ("CICA") Handbook Section 3855 resulted in certain unrealized
gains and losses, which do not have an impact on reported income for the
period, being reflected in a new component of shareholders' equity called
Accumulated Other Comprehensive Income. Accordingly, the Company calculates
return on equity using average common shareholders' equity excluding
Accumulated Other Comprehensive Income on available-for-sale securities and
cash flow hedges.

    About Manulife Financial
    ------------------------
    Manulife Financial is a leading Canadian-based financial services group
serving millions of customers in 19 countries and territories worldwide.
Operating as Manulife Financial in Canada and Asia, and primarily through John
Hancock in the United States, the Company offers clients a diverse range of
financial protection products and wealth management services through its
extensive network of employees, agents and distribution partners. Funds under
management by Manulife Financial and its subsidiaries were Cdn $400 billion
(US$393 billion) as at June 30, 2008. Manulife Financial Corporation trades as
'MFC' on the TSX, NYSE and PSE, and under '0945' on the SEHK. Manulife
Financial can be found on the Internet at www.manulife.com.

    Attachments: Financial Highlights, Consolidated Statements of Operations,
    Consolidated Balance Sheets, Divisional Information.

    Notes:

    Manulife Financial Corporation will host a Second Quarter Earnings
Results Conference Call at 2:00 p.m. ET on August 7, 2008. For local and
international locations, please call (416) 340-2216 and toll free in North
America please call (866) 898-9626. Please call in ten minutes before the call
starts. You will be required to provide your name and organization to the
operator. A playback of this call will be available by 6:00 p.m. ET on
August 7, 2008 until August 14, 2008 by calling (416) 695-5800 (passcode
No.3248036).
    The conference call will also be webcast through Manulife Financial's
website at 2:00 p.m. ET on August 7, 2008. You may access the webcast at:
www.manulife.com/quarterlyreports. An archived version of the webcast will be
available later on the website at the same URL as above.
    The Second Quarter 2008 Financial Statements and Statistical Information
Package are also available on the Manulife website at:
www.manulife.com/quarterlyreports. Each of these documents may be downloaded
before the webcast begins.

    Caution Regarding Forward-Looking Statements
    --------------------------------------------
    This document contains forward-looking statements within the meaning of
the "safe harbour" provisions of Canadian provincial securities laws and the
U.S. Private Securities Litigation Reform Act of 1995. These forward-looking
statements relate to, among other things, our objectives, goals, strategies,
intentions, plans, beliefs, expectations and estimates, and can generally be
identified by the use of words such as "may", "will", "could", "should",
"would", "suspect", "outlook", "expect", "intend", "estimate", "anticipate",
"believe", "plan", "forecast", "objective" and "continue" (or the negative
thereof) and words and expressions of similar import, and include statements
concerning possible or assumed future results. Although we believe that the
expectations reflected in such forward-looking statements are reasonable, such
statements involve risks and uncertainties, and undue reliance should not be
placed on such statements. Certain material factors or assumptions are applied
in making forward-looking statements, and actual results may differ materially
from those expressed or implied in such statements. Important factors that
could cause actual results to differ materially from expectations include but
are not limited to: level of competition and consolidation, changes in laws
and regulations, general business and economic conditions, currency rates and
Company liquidity, accuracy of information received from counterparties and
the ability of counterparties to meet their obligations, accuracy of
accounting policies and actuarial methods used by the Company, ability to
maintain the Company's reputation, legal and regulatory proceedings, the
disruption of or changes to key elements of the Company's or to public
infrastructure systems, the ability to attract and retain key executives,
environmental concerns, the ability to complete acquisitions and execute
strategic plans, and the ability to adapt products and services to the
changing market. Additional information about material factors that could
cause actual result to differ materially from expectations and about material
factors or assumptions applied in making forward-looking statements may be
found in the body of this document as well as under "Risk Factors" in our most
recent Annual Information Form, under "Risk Management" and "Critical
Accounting and Actuarial Policies" in the Management's Discussion and Analysis
in our most recent Annual Report, and elsewhere in our filings with Canadian
and U.S. securities regulators. We do not undertake to update any
forward-looking statements.


    
    Financial Highlights
    (Canadian $ in millions unless otherwise stated and per share
    information, unaudited)

                                                   As at and for the three
                                                     months ended June 30
                                                  2008       2007   % Change
    -------------------------------------------------------------------------

    Net income                               $     998  $   1,099         (9)
      Loss attributed to participating
       policyholders                               (10)        (3)       233
    -------------------------------------------------------------------------
    Net income attributed to shareholders    $   1,008  $   1,102         (9)
      Preferred share dividends                     (8)        (7)         -
    -------------------------------------------------------------------------
    Net income available to common
     shareholders                            $   1,000  $   1,095         (9)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Premiums and deposits
      Life and health insurance premiums     $   3,865  $   3,692          5
      Annuity and pension premiums               1,507      1,140         32
      Segregated fund deposits                   8,472      8,545         (1)
      Mutual fund deposits                       2,664      2,305         16
      ASO premium equivalents                      621        584          6
      Other fund deposits                          133        172        (23)
    -------------------------------------------------------------------------
    Total premiums and deposits              $  17,262  $  16,438          5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Funds under management
      General fund                           $ 164,445  $ 163,675          -
      Segregated funds                         175,746    176,842         (1)
      Mutual funds                              32,094     38,810        (17)
      Other funds                               28,013     31,240        (10)
    -------------------------------------------------------------------------
    Total funds under management             $ 400,298  $ 410,567         (3)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Capital
      Liabilities for preferred shares and
       capital instruments                   $   3,024  $   3,046         (1)
      Non-controlling interest in
       subsidiaries                                167        202        (17)

      Equity
        Participating policyholders' equity         64        153        (58)
        Shareholders' equity
          Preferred shares                         638        638          -
          Common shares                         13,958     14,043         (1)
          Contributed surplus                      152        130         17
          Retained earnings                     15,312     13,632         12
          Accumulated other comprehensive loss
           on AFS securities and translation
           of net foreign operations            (5,025)    (3,224)        56
    -------------------------------------------------------------------------
    Total capital                            $  28,290  $  28,620         (1)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Selected key performance measures
      Basic earnings per common share        $    0.67  $    0.72
      Diluted earnings per common share      $    0.66  $    0.71
      Return on common shareholders'
       equity (annualized)(1)                    17.0%      18.5%
      Book value per common share            $   16.29  $   16.21
      Common shares outstanding (in millions)
        End of period                            1,495      1,519
        Weighted average - basic                 1,497      1,532
        Weighted average - diluted               1,508      1,546

    (1) Return on common shareholders' equity is net income available to
        common shareholders divided by average common shareholders' equity
        excluding accumulated other comprehensive income on AFS securities
        and cash flow hedges.


    Summary Consolidated Financial Statements

    Consolidated Statements of Operations
    (Canadian $ in millions except per share data, unaudited)

                                                             For the three
                                                              months ended
                                                                 June 30
                                                             2008       2007
    -------------------------------------------------------------------------
    Revenue
    Premium income                                      $   5,372  $   4,832
    Investment income
      Investment income                                     2,230      2,408
      Realized/unrealized losses on assets supporting
       policy liabilities and consumer notes               (1,462)    (1,308)
    Other revenue                                           1,418      1,367
    -------------------------------------------------------------------------
    Total revenue                                       $   7,558  $   7,299
    -------------------------------------------------------------------------
    Policy benefits and expenses
    To policyholders and beneficiaries
      Death, disability and other claims                $   1,606  $   1,569
      Maturity and surrender benefits                       1,903      1,857
      Annuity payments                                        723        727
      Policyholder dividends and experience
       rating refunds                                         353        391
      Net transfers to segregated funds                       443        158
      Change in actuarial liabilities(1)                   (1,368)    (1,154)
    General expenses                                          876        842
    Investment expenses                                       233        257
    Commissions                                             1,100        955
    Interest expense                                          273        182
    Premium taxes                                              66         66
    Non-controlling interest in subsidiaries                    5          9
    -------------------------------------------------------------------------
    Total policy benefits and expenses                  $   6,213  $   5,859
    -------------------------------------------------------------------------
    Income before income taxes                          $   1,345  $   1,440
    Income taxes                                             (347)      (341)
    -------------------------------------------------------------------------
    Net income                                          $     998  $   1,099
      Loss attributed to participating policyholders          (10)        (3)
    -------------------------------------------------------------------------
    Net income attributed to shareholders               $   1,008  $   1,102
      Preferred share dividends                                (8)        (7)
    -------------------------------------------------------------------------
    Net income available to common shareholders         $   1,000  $   1,095
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic earnings per common share                     $    0.67  $    0.72
    Diluted earnings per common share                   $    0.66  $    0.71

    (1) Includes impact of net redemptions in John Hancock Fixed Products
        institutional products of $0.5 billion in Q2 2008 and $0.2 billion in
        Q2 2007.


    Consolidated Balance Sheets
    (Canadian $ in millions, unaudited)
                                                              As at June 30
    Assets                                                   2008       2007
    -------------------------------------------------------------------------
    Invested assets
    Cash and short-term securities                      $  12,196  $  10,511
    Securities
      Bonds                                                72,195     74,453
      Stocks                                               11,303     11,930
    Loans
      Mortgages                                            27,637     26,350
      Private placements                                   22,670     22,937
      Policy loans                                          6,133      6,052
      Bank loans                                            2,257      2,106
    Real estate                                             6,029      5,826
    Other investments                                       4,025      3,510
    -------------------------------------------------------------------------
    Total invested assets                               $ 164,445  $ 163,675
    -------------------------------------------------------------------------
    Other assets
    Accrued investment income                           $   1,420  $   1,488
    Outstanding premiums                                      691        670
    Goodwill                                                6,882      6,977
    Intangible assets                                       1,602      1,561
    Derivatives                                             2,227      1,923
    Miscellaneous                                           2,804      3,013
    -------------------------------------------------------------------------
    Total other assets                                  $  15,626  $  15,632
    -------------------------------------------------------------------------
    Total assets                                        $ 180,071  $ 179,307
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Segregated funds net assets                         $ 176,395  $ 177,509
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and equity
    -------------------------------------------------------------------------
    Policy liabilities                                  $ 125,388  $ 128,368
    Deferred realized net gains                               106        115
    Bank deposits                                          10,704      8,107
    Consumer notes                                          1,894      2,382
    Long-term debt                                          2,775      1,867
    Future income tax liability, net                        3,068      2,611
    Derivatives                                             2,053      1,802
    Other liabilities                                       5,844      5,396
    -------------------------------------------------------------------------
                                                        $ 151,832  $ 150,648

    Liabilities for preferred shares and capital
     instruments                                            3,024      3,046
    Non-controlling interest in subsidiaries                  167        202

    Equity
      Participating policyholders' equity                      64        153
      Shareholders' equity
      Preferred shares                                        638        638
      Common shares                                        13,958     14,043
      Contributed surplus                                     152        130
      Retained earnings                                    15,312     13,632
      Accumulated other comprehensive loss                 (5,076)    (3,185)
    -------------------------------------------------------------------------
    Total equity                                        $  25,048  $  25,411
    -------------------------------------------------------------------------
    Total liabilities and equity                        $ 180,071  $ 179,307
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Segregated funds net liabilities                    $ 176,395  $ 177,509
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Notes to Summary Consolidated Financial Statements
    (Canadian $ in millions, unaudited)

    Note 1: Divisional Information

                                       For the quarter ended June 30, 2008
                                  -------------------------------------------
                                               U.S.
                                     U.S.     Wealth                  Asia
    Premiums and deposits         Insurance Management   Canadian  and Japan
    -------------------------------------------------------------------------
    General fund premiums         $   1,339  $   1,315  $   1,668  $     763
    Segregated fund deposits            308      4,799      1,644      1,721
    Mutual fund deposits                  -      2,401        157        106
    ASO premium equivalents               -          -        621          -
    Other fund deposits                   -        133          -          -
    -------------------------------------------------------------------------
    Total                         $   1,647  $   8,648  $   4,090  $   2,590
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income (loss)             $     223  $     271  $     297  $     210
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Funds under management                        As at June 30, 2008
    -------------------------------------------------------------------------
    General fund                  $  47,611  $  34,404  $  51,898  $  16,656
    Segregated funds                 10,869    107,438     32,524     22,294
    Mutual funds                          -     27,198      3,219      1,677
    Other funds                           -      3,642          -      3,083
    -------------------------------------------------------------------------
    Total                         $  58,480  $ 172,682  $  87,641  $  43,710
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                             For the quarter ended June 30, 2008
                             -------------------------------------
                                              Corporate
                                                 and
    Premiums and deposits         Reinsurance   Other      Total
    --------------------------------------------------------------
    General fund premiums         $     287  $       -  $   5,372
    Segregated fund deposits              -          -      8,472
    Mutual fund deposits                  -          -      2,664
    ASO premium equivalents               -          -        621
    Other fund deposits                   -          -        133
    --------------------------------------------------------------
    Total                         $     287  $       -  $  17,262
    --------------------------------------------------------------
    --------------------------------------------------------------

    Net income (loss)             $      46  $     (49) $     998
    --------------------------------------------------------------
    --------------------------------------------------------------

    Funds under management                As at June 30, 2008
    --------------------------------------------------------------
    General fund                  $   2,532  $  11,344  $ 164,445
    Segregated funds                      -      2,621    175,746
    Mutual funds                          -          -     32,094
    Other funds                           -     21,288     28,013
    --------------------------------------------------------------
    Total                         $   2,532  $  35,253  $ 400,298
    --------------------------------------------------------------
    --------------------------------------------------------------


                                       For the quarter ended June 30, 2007
                                  -------------------------------------------
                                               U.S.
                                     U.S.     Wealth                  Asia
    Premiums and deposits         Insurance Management   Canadian  and Japan
    -------------------------------------------------------------------------
    General fund premiums         $   1,300  $     987  $   1,556  $     727
    Segregated fund deposits            285      5,741      1,299      1,219
    Mutual fund deposits                  -      1,939        130        236
    ASO premium equivalents               -          -        584          -
    Other fund deposits                   -        172          -          -
    -------------------------------------------------------------------------
    Total                         $   1,585  $   8,839  $   3,569  $   2,182
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income                    $     196  $     257  $     294  $     236
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Funds under management                     As at June 30, 2007
    -------------------------------------------------------------------------
    General fund                  $  46,266  $  39,401  $  48,496  $  16,335
    Segregated funds                 12,171    113,526     30,692     17,894
    Mutual funds                          -     33,608      3,451      1,751
    Other funds                           -      3,993          -      3,224
    -------------------------------------------------------------------------
    Total                         $  58,437  $ 190,528  $  82,639  $  39,204
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                             For the quarter ended June 30, 2007
                             -------------------------------------
                                              Corporate
                                                 and
    Premiums and deposits         Reinsurance   Other      Total
    --------------------------------------------------------------
    General fund premiums         $     262  $       -  $   4,832
    Segregated fund deposits              -          1      8,545
    Mutual fund deposits                  -          -      2,305
    ASO premium equivalents               -          -        584
    Other fund deposits                   -          -        172
    --------------------------------------------------------------
    Total                         $     262  $       1  $  16,438
    --------------------------------------------------------------
    --------------------------------------------------------------

    Net income                    $      68  $      48  $   1,099
    --------------------------------------------------------------
    --------------------------------------------------------------

    Funds under management              As at June 30, 2007
    --------------------------------------------------------------
    General fund                  $   2,601  $  10,576  $ 163,675
    Segregated funds                      -      2,559    176,842
    Mutual funds                          -          -     38,810
    Other funds                           -     24,023     31,240
    --------------------------------------------------------------
    Total                         $   2,601  $  37,158  $ 410,567
    --------------------------------------------------------------
    --------------------------------------------------------------


    Note 2: Comparatives

    Certain comparative amounts have been reclassified to conform with the
    current period's presentation.
    





For further information:

For further information: Media inquiries: Laurie Lupton, (416) 852-7792,
Laurie_Lupton@manulife.com; Investor Relations: Amir Gorgi, 1-800-795-9767,
investor_relations@manulife.com


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890