(February 15 – 09:45 ET) – Sun Life Financial Services of Canada Inc. is reporting improved net income for 2000. For fiscal 2000, net income reached a record $792 million, up 22% from 1999. Revenues were $16.2 billion compared to $14.7 billion in 1999.

Assets under management at year-end 2000 were $329 billion compared to $301 billion in 1999, an increase of 9%. However, during the fourth quarter, assets under management declined by 5% compared to the end of the third quarter.

For the fourth quarter Sun Life managed net income of $211 million, an increase of 37% from 1999. Earnings per share of 50¢ were up 32% from the 38¢ per share earned in the fourth quarter a year ago. Return on equity for the fourth quarter was 12.9%, up from 10.7% for the fourth quarter of 1999.

Sun Life also announced that it has decided to exit the direct sales force distribution business in the U.K. As a result, the company intends to reduce its U.K. workforce from approximately 2,000 employees to approximately 300 employees by the end of 2003, with an interim target of 900 employees by the year end 2001.

A consultation process with employee representatives has been initiated. The phase down of the U.K. business is not expected to have a material effect on Sun Life Financial’s 2001 earnings.

“Sun Life Financial reported record earnings for the year 2000 and finished on a solid note with record quarter earnings in the final quarter,” said Donald Stewart, chairman and CEO. “At the same time we are addressing the strategic challenges we face. Amid an increasingly difficult environment in the U.K., we have decided to reduce our business profile. Our operating strategies in the U.K. over the past two years have focused on simultaneously reducing costs and creating a new approach to driving revenue growth. Our cost reduction efforts have been successful. However, we have been disappointed with the revenue trajectory and have concluded that we will be unable to meet our longer term financial objectives.”

Paul Derksen, executive vice president and CFO, warned about future results, “Going forward, given current trends in the equity markets, achieving consensus analysts estimates of $2.15 per share for 2001 may be a challenge.”
-IE Staff