Credit rating agency Standard & Poor’s downgraded Manulife Financial Corp. MFC-T Monday, citing weaker earnings potential from its U.S. operations and volatile earnings.
The rating agency has cut Manulife’s rating multiple times since the financial crisis, stripping the firm of its coveted triple-A status last year and then lowering it further this past August, from double-A-plus to double-A.
It put the rating on review again in early November, suggesting that another cut could be on the way. On Monday it said Manulife’s rating is now double-A-minus.
“We believe that the prospective earnings profile of Manulife Financial’s U.S. operations will be weaker than we previously expected, given the current economic environment,” the agency stated.
“In addition, we expect the volatility associated with Manulife Financial’s net earnings and capital to remain elevated over the intermediate term, until it makes more progress in reducing and containing its risks more in line with its updated risk tolerances.”
