Interesting DP (data point) - Manulife Bank raised nearly $1 billion in deposits between April 30 and May 31 | Manulife Bank | Discussion forum

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Interesting DP (data point) - Manulife Bank raised nearly $1 billion in deposits between April 30 and May 31
July 26, 2019
12:00 pm
Doug
British Columbia, Canada
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I decided to do a quick analysis of Manulife Bank's reported balance sheet data for the two most recent reporting periods, May 31, 2019, and April 30, 2019. The follow is what the data shows for individual demand deposits. Excluded non-personal (i.e., corporate) deposits. Term deposits dropped, albeit relatively modestly, by $100 million or so, and have also not been summarized below. Nevertheless, had they been summarized, they would show that Manulife indeed did raise close to a billion in deposits in a one month span. Note also this does include deposits generated through brokerage and deposit broker channels, which aren't included in the 3.35%/3.25% (now 3.10%/3.00%) 6-month new money promotion.

Nevertheless (all figures are rounded to the nearest million dollars):

April 30, 2019
(i) Tax sheltered (RRSP, TFSA, and RRIF): $1.012 billion
(ii) Non-registered:
- USD: $0.387 million
- CAD: $8.833 billion

May 31, 2019
(i) Tax sheltered (RRSP, TFSA, and RRIF): $0.989 million
(ii) Non-registered:
- USD: $0.402 million
- CAD: $9.436 billion

Collectively, inclusive of demand and term deposits, to individuals and corporations/organizations/trusts and in tax-sheltered and non-registered plans, Manulife Bank has about $20.5 billion versus about $19.6 billion in deposits as at May 31 and April 30, respectively. For comparison purposes, Tangerine Bank has about $35 billion in deposits, Home Capital Group and Equitable Group have between $10-15 billion in both brokered and direct-to-consumer deposits. Canadian Western Bank's Motive Financial had $502 million as at March 31, 2019, and the Manitoba credit unions' virtual banking divisions average between $100-200 million, though some are less than that.

I suspect their June 30 and July 31 filings will show them raising another $1-2 billion. It'll be interesting to see how many of these deposits stay there this time next, if they do another promo or not. 🙂

Cheers,
Doug

July 26, 2019
12:07 pm
MapleOne
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I think with the shenanigans they have pulled as of late they are going to have trouble maintaining the same momentum. I can only speak for myself when I say I'm pulling out and will not be back to them.

I feel for all the people who entered with 500k at 3.25% and immediately got reduced by .25 when they figured they had enough deposits.

Now I see why the 500k was moved down to 100k, but to immediately hit everyone with a reduction right after advertising the promotion seems a little shady to me.

July 26, 2019
12:15 pm
Doug
British Columbia, Canada
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MapleOne said
I think with the shenanigans they have pulled as of late they are going to have trouble maintaining the same momentum. I can only speak for myself when I say I'm pulling out and will not be back to them.

I feel for all the people who entered with 500k at 3.25% and immediately got reduced by .25 when they figured they had enough deposits.

Now I see why the 500k was moved down to 100k, but to immediately hit everyone with a reduction right after advertising the promotion seems a little shady to me.  

Agree with you on all of that, @MapleOne. I'm not entirely sure whether those that had $500,000 in there saw $400,000 of that not counted in the promotion or whether they were grandfathered. Manulife lowered the promotion cap back in May. I think it's likely that they weren't grandfathered. Nevertheless, agree it's bad form! On $1 billion in deposits, that'd cost them $2.4 million in interest expense. Surely most of those weren't maxing out at $500,000, so the interest savings would likely only be a few hundred thousand at best. I guess, every dollar counts!

Might be better off buying Manulife Financial common or preferred shares, which yield between 4.5-6% per annum. 😉

Not CDIC insured, but they're arguably good value.

Cheers,
Doug

July 27, 2019
8:44 am
canadian.100
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Doug said

Might be better off buying Manulife Financial common or preferred shares, which yield between 4.5-6% per annum. 😉

Not CDIC insured, but they're arguably good value.

Cheers,
Doug  

I think you are absolutely correct - I have procrastinated buying MFC for many years now and regret that. Sun Life, Manulife and Great West Life are all long established solid companies - common and preferred shares. Canada's big financial institutions - banks and insurance have proven to be great (equity) investments. (but not their savings account and GIC interest rates). However, most members here are focussed on Savings Accounts/GICs. Getting more challenging for them each day as interest rates are currently in a downward trajectory.

July 27, 2019
11:06 am
AltaRed
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Actually the common shares of lifecos have not done nearly as good as the broader market since the great financial recession. Low interest rates are killing them. Casualty insurance is doing better.

SLF - 7.34% CAGR 10 year
MFC - 2.29% CAGR 10 year
GWL - 5.59% CAGR 10 year

IAG - 8.84% CAGR 10 year (casualty)
IFC - 15.17% CAGR 10 year (casualty)

MFC has had negative share price growth over that period trying to recover from its severe risk management missteps. Sorry to say, I have owned it for the last 5 years or so assuming it would break out.... Not yet to any degree (5.08% CAGR 5 year).

I normally would not own a stock that doesn't have at least a 8+% CAGR over a 10 year rolling period but we all have some losers.

July 27, 2019
11:28 am
canadian.100
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AltaRed said
Actually the common shares of lifecos have not done nearly as good as the broader market since the great financial recession. Low interest rates are killing them. Casualty insurance is doing better.

SLF - 7.34% CAGR 10 year
MFC - 2.29% CAGR 10 year
GWL - 5.59% CAGR 10 year

IAG - 8.84% CAGR 10 year (casualty)
IFC - 15.17% CAGR 10 year (casualty)

MFC has had negative share price growth over that period trying to recover from its severe risk management missteps. Sorry to say, I have owned it for the last 5 years or so assuming it would break out.... Not yet to any degree (5.08% CAGR 5 year).

I normally would not own a stock that doesn't have at least a 8+% CAGR over a 10 year rolling period but we all have some losers.  

At least you benefited from the dividend tax credit and lower taxes on your dividends than on interest income.

July 27, 2019
12:07 pm
AltaRed
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Indeed. The only taxable interest income I have is in my EQ account(s) and a few brokerage ISAs getting a few dollars on investment income.

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