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Will Manulife Financial's New Lending Suite Redefine Wealth Management?

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Key Takeaways

  • Manulife introduced a redesigned Specialized Lending suite through Manulife Bank.
  • The suite uses insurance or investment assets to provide liquidity without asset sales.
  • Options include Immediate Financing, Access Line of Credit Plus, and investment loans.

Manulife Financial Corporation (MFC - Free Report) , a leading global financial services provider, has introduced a refreshed Specialized Lending suite through Manulife Bank. The redesigned offering simplifies the lending structure and is crafted to help advisors deliver more effective solutions for their high-net-worth clients.

The Specialized Lending offering is designed as a set of customized credit solutions that cater specifically to the financial priorities of high-net-worth clients and business owners. By utilizing insurance assets, investment holdings, or even financing for advisory practices, these structures enable clients to access funds without selling or disrupting their core wealth. This approach also allows them to manage liquidity needs, plan taxes more effectively and remain focused on long-term objectives.

The refreshed suite covers a wide range of lending options, such as the Immediate Financing Arrangement, which allows clients to draw liquidity while keeping their insurance policies in force. It also offers the Access Line of Credit Plus program, secured against insurance or investment assets, with two paths: Quick, designed for fast approvals and funding below $1 million, and Max, created for larger borrowing needs with more detailed underwriting.

Additional offerings include Investment and RRSP Loans to reinforce long-term portfolio and retirement strategies, as well as specialized financing to help managing general agencies and advisors expand their practices, with MGAs encouraged to connect with their Manulife Bank representative to explore approval.

The new Specialized Lending suite can help Manulife Bank grow its lending book and bring in more interest income. Since most of the loans are backed by insurance and investment assets, it also supports better margins and lower risk.

For Manulife as a whole, these products can keep insurance policies active, bring steady premium income, and encourage more investments that add to fee revenues.  These offerings could further solidify the MFC’s presence in the high-net-worth segment and open cross-selling opportunities across banking, insurance, and wealth.

MFC’s Price Performance

In the year-to-date period, Manulife Financial’s shares have gained 3.5% compared with the industry’s growth of 1.4%.

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Zacks Rank & Key Picks

Manulife has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Life Insurance space are Jackson Financial Inc. (JXN - Free Report) ,Primerica, Inc. (PRI - Free Report) and Voya Financial, Inc. (VOYA - Free Report) . Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate forJackson's current-year earnings is pegged at $20.44 per share, implying 8.8% year-over-year growth. Jackson surpassed estimates in two of the last four reported quarters, missed the other two, the average surprise being 1.58%. The consensus estimate for JXN’s current-year revenues is pegged at $7.2 billion.

The Zacks Consensus Estimate for Primerica’s current-year earnings is pegged at $21.45 per share, implying 8.1% year-over-year growth. It surpassed estimates in each of the last four reported quarters, the average surprise being 7.7%. The consensus estimate for PRI’s current-year revenues is pegged at $3.2 billion, implying 6.2% year-over-year growth.

The Zacks Consensus Estimate forVoya 's current-year earnings is pegged at $8.65 per share, implying 40.2% year-over-year growth. Voya surpassed estimates in each of the last four reported quarters, the average surprise being 41.2%. The consensus estimate for Voya’s current-year revenues is pegged at $1.3 billion.

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