Ia Financial Corporation (($TSE:IAG)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for iA Financial Corporation unveiled a largely positive outlook, marked by record profitability and significant growth in both Canadian and U.S. markets. The company celebrated its robust capital position, although there were some concerns over provisions for outstanding balances and credit experience losses in the U.S. Despite these lowlights, the sentiment remained optimistic as the company’s strong performance overshadowed the challenges.
Record Profitability Achieved in Q4
The quarter was highlighted by iA Financial’s record profitability, with core earnings per share (EPS) reaching $3.04—a 30% increase year-over-year. The core return on equity (ROE) was reported at 16.9%, showcasing the company’s efficient management and profitable operations.
Strong Sales and Growth in U.S. Operations
In the U.S., iA Financial saw substantial growth, with Individual Insurance sales climbing to US$68 million, a 55% increase from the previous year, and Dealer Services sales rising to US$274 million, marking a 21% increase. This growth underscores the company’s expanding footprint and competitive stance in the U.S. market.
Impressive Growth in Wealth Management
Wealth management was another bright spot, with gross sales of segregated funds hitting a quarterly record of nearly $1.6 billion, an impressive 87% increase year-over-year. Net inflows approached $1 billion, reflecting strong demand and effective asset management strategies.
Robust Capital Position
The company’s solvency ratio was a highlight, standing at 139%, significantly above its operating target. This strong capital position was further supported by organic capital generation of $150 million in the fourth quarter.
Successful Year-End Performance
Overall, iA Financial exceeded expectations with core earnings surpassing $1 billion for 2024. The company reported a 22% increase in premiums and deposits alongside an 18% rise in assets under management, demonstrating effective growth strategies and operational excellence.
Provision for Outstanding Balances in U.S.
A provision of $16 million was made for outstanding balances related to U.S. operations, highlighting the company’s proactive approach in managing risks and ensuring financial stability.
Credit Experience Loss
The company faced a $7 million loss in credit experience due to more downgrades than upgrades in its investment portfolio, as well as increased allowances for credit losses at iA Auto Finance, indicating areas for improvement in credit risk management.
Non-core Adjustments Impacting Net Income
Non-core adjustments led to a lower net income of $220 million, influenced by favorable market variations, year-end assumption reviews, and specific items such as tax adjustments and software write-downs.
Forward-Looking Guidance
Looking ahead, iA Financial expects continued strong performance into 2025, with core EPS projected to maintain its upward trajectory, bolstered by strategic capital deployment. The company anticipates sustained growth in U.S. operations and a steady increase in book value per share, reinforcing its solid financial foundation.
In summary, iA Financial Corporation’s latest earnings call painted a picture of a company on a strong upward trajectory. With record profitability, impressive growth across key markets, and a robust capital position, the overall sentiment was overwhelmingly positive. While challenges in the U.S. operations were acknowledged, the company’s strategic initiatives and forward-looking guidance suggest a promising future.
