Sun Life Financial Services of Canada Inc. is reporting record earnings for the second quarter ending June 30.

Net income for the quarter was $212 million, an increase of 8% over the $197 million earned in the same period in 2000. Earnings per share were 50¢, up 6% from the 47¢ a year ago.

Revenues for the quarter were $3,945 million, compared versus $4,172 million a year ago, a drop of 5%. Assets under management reache $326 billion at quarter end, an increase of 3% compared with the $316 billion at the end of the first quarter of 2001, and a decline of 1% relative to assets under management of $329 billion at June 30, 2000.

Return on equity was 12.3% , up from 12% in the first quarter of 2001.

“Sun Life Financial’s second quarter results demonstrate the corporation’s ability to maintain stable earnings performance in a challenging financial environment,” said Donald A. Stewart, chairman and CEO. “A combination of strong sales in a number of our businesses and prudent attention to costs across all operations helped to produce record net income for the quarter. While Sun Life Financial’s wealth management focus results in an inherent sensitivity to North American capital markets, we are pleased that the diversity of our business model was successful in mitigating the impact of the market on our performance.”

Canadian operations earned $55 million in the second quarter of 2001, an increase of $13 million, or 31%, relative to the $42 million earned in the second quarter of 2000. This increase was primarily the result of an $11 million increase in earnings from Group Life and Health.

Spectrum and other earnings declined to $6 million in the current quarter from $9 million in the second quarter of 2000. The earnings decrease resulted primarily from a $1.2 billion reduction in assets under management as equity markets valuations declined.

In the second quarter of 2001, U.S. Annuity and Insurance Operations earned $27 million compared to $58 million in the second quarter of 2000, a decrease of $31 million, or 53%. This decline was largely as the result of earnings declines in Retirement Products and Services and in the Investment Portfolio. The earnings of the Investment Portfolio were reduced by a more tightly hedged book.

MFS earned $65 million in the second quarter, an increase of $3 million, or 5%, relative to the $62 million earned in the second quarter of 2000. Relative to performance in the first quarter of 2001 earnings in the second quarter increased by $7 million, or 12%. Two factors were responsible for MFS’ ability to report relatively stable earnings performance during this period of steep declines in U.S. equity markets: net funds inflows provided a partial offset to asset valuation declines, and aggressive cost control offset pressure on profit margins.