Manulife Financial Allays Fears Of Insufficient Capital

Toronto, Ontario (AHN) - Outgoing Manulife Financial Corporation chief executive officer Dominic D'Alesssandro, in a conference call Tuesday, assured investors the company has sufficient capital.

D'Alessandro gave the assurance following the decline of the company's shares the past 48 hours. "When you see your stock drop by 25 percent in two days, it sort of focuses your mind that maybe you ought to pay attention to reassuring and making your investors understand your position... We think that Manulife was sideswiped by the meltdown in the markets in a way that grossly exaggerates any impact that they're going to have on us. We want to put that to rest," D'Alesssandro said.

He added that even if the markets worsen, Manulife is a big, strong firm and it could replenish lost capital at levels considered acceptable threshold. Because of its huge exposure to the global stock market, it has been moving capitals within its divisions to make sure that some of its regulated businesses are well covered. But its exposure to the subprime market is extremely small, less than one-half of one percent, according to firm's website.

Because of the economic slowdown, the variable annuity sales of the company may decrease by 20 to 30 percent. D'Alessandro explained, "It's no big surprise that people are deferring investment decisions given the uncertainty that's confronting them every day."

Manulife said Monday it expects profits to be hit with $250 million credit losses for the third quarter.

Manulife has earlier expressed interest in acquiring some parts of the American International Group.