Sun Life Financial Services of Canada Inc. is reporting higher net income for the first quarter.

Sun Life had net income of $256 million for the quarter ending March 31, an increase of $54 million, or 27%, over the $202 million earned in the first quarter in 2001. Return on equity for the first quarter was 13.2%,.

“I am very pleased to report a solid opening quarter for 2002,” said Donald Stewart, chairman and CEO. “The quarter benefited from a strong performance at Keyport, which continues to achieve results in excess of our initial expectations. The smooth integration of this acquisition reinforces our confidence in achieving attractive results from the Clarica integration later this year.”

At March 31, assets under management were $356.9 billion, an increase of $5.2 billion or 1.5% from December 31, 2001. The Keyport acquisition added $30.6 billion to assets under management. This increase was partially offset by the sales, in the fourth quarter of 2001, of Sun Bank and SLC Asset Management, which had combined assets under management of $8.6 billion.

Total revenue in the first quarter was $5.4 billion, an increase of $1.1 billion, or 25%, compared to the quarter in 2001. Revenues from Keyport added $1.55 billion in 2002. Investment income increased by $219 million, including $317 million from Keyport, which more than offset the reduction occurring from the U.K. companies sold in the fourth quarter of 2001. Annuity premiums increased by $829 million in the first quarter of 2002 relative to the first quarter of 2001. Keyport contributed $1.215 billion in revenues helping to offset a decrease in investment product deposits. Life and health insurance premiums increased by $43 million in the first quarter of 2002 over the first quarter in 2001. Fee revenues dropped $11 million, largely in the wealth management businesses.

Despite a stronger than expected economic rebound, the company’s outlook for its current ongoing operations remains unchanged from that described in the 2001 annual Management’s Discussion and Analysis. It notes that the integration will hit earnings this year. Integration costs are currently expected to be no lower than $240 million after tax.