Sun Life Financial has reported its fourth quarter and full-year financial results which show growth for its commercial mortgage book.
The lender held $16.4 billion of mortgages at December 31, 2018 compared to $15.5 billion a year earlier with Canadian real estate accounting for $8.557 billion, up from $8,390 billion a year earlier.
Multi-family residential properties accounted for 33% of its total mortgage book while the rest was made up of retail, office, multi-family, industrial and land properties. There were no single-family mortgages.
Most of Sun Life’s Canadian mortgages have an LTV maximum of 75% but CMHC-insured properties may have higher LTV. The estimated weighted average debt service coverage for its uninsured commercial portfolio is 1.75 times.
Of the $3.5 billion of multi-family residential mortgages in its Canadian commercial mortgage portfolio, 93% were insured by the CMHC.
Overall performance was strong
Although Sun Life Financial’s Canadian business unit posted a lower net income in the fourth quarter compared to a year earlier, the group’s global net income was up overall.
"Our fourth quarter capped off a year of strong performance for Sun Life, generating annual underlying net income of $2.9 billion. In 2018, we achieved double-digit growth in earnings and value of new business, we increased underlying return on equity to 14.2% and delivered dividend growth of 9%," said Dean Connor, President & CEO, Sun Life Financial.
"During the quarter, we also announced our plan to merge Bentall Kennedy, our North American real estate and property management firm, with GreenOak Real Estate, and we will acquire a majority stake in the combined entity,” he added.