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The latest results of the RBC CASH (Consumer Attitudes and Spending by Household) Index show that more than half of U.S. consumers believe the economy is on the track to recovery.

“Better-than-expected news about the economy and corporate earnings is helping consumers to recognize that the worst is behind us,” said RBC Capital Markets managing director Larry Miller. “Their growing confidence is seen in the continued improvement of the RBC Jobs Index, which suggests that consumers have less fear of losing their jobs. That may lead to a revival in spending, further driving economic recovery.”

For May 2009, the RBC CASH Index stands at 43.0, up from 38.3 in April and from 1.6 in February, its all-time low.

May’s findings are based on a representative nationwide sample of 1,000 U.S. adults polled between May 1 and May 5, 2009, by survey-based research company Ipsos Public Affairs. The margin of error was +/-3.1% for all respondents.

Highlights of the survey also include

• a slight improvement in consumers’ confidence with investment and major spending, as shown by the RBC Investment Index. The index currently stands at 49.6, up 4.8 points from April’s 44.8.

• a small increase in consumers’ sentiment toward their local economy, as shown by the RBC Current Conditions Index. For May, the index stands at 45.0, up 9.2 points from last month’s 35.8.

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Manulife posts $1.07 billion loss

Canada’s largest insurance company, Manulife, reported a first-quarter loss of $1.068 billion, compared to net income of $869 million in the first quarter of 2008.

Cited as the primary causes for the losses are declines in the equity markets (particularly the U.S.); reserve strengthening for segregated fund guarantees (resulted in charges of $1.146 billion); and credit impairments ($121 million in writedowns).

In view of the recent market volatility and the losses that were incurred, the company has implemented hedging programs in its segregated funds and revised its fee structure.

In the U.S., fees were increased, deferral bonuses were reduced, additional features were withdrawn and equity exposure was reduced in several key funds.

In Canada, the hedging program for new segregated fund business was successfully implemented at the end of March, and $1.5 billion of in-force business was hedged. New business in North America is now hedged on an ongoing basis.

In Canada, the hedging program for new segregated fund business was successfully implemented at the end of March, and $1.5 billion of in-force business was hedged. New business in North America is now hedged on an ongoing basis.

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Disappointing first quarter for Sun Life

For the first quarter of 2009, Sun Life Financial Inc. reported a net operating loss of $186 million, compared with net operating income of $533 million in the same period last year. For the most part, the turbulent equity market is being blamed for the loss.

“During this challenging period, individuals and organizations are increasingly placing their confidence in Sun Life. We are strong, solid and sustainable,” said Donald A. Stewart, CEO. “Strong business fundamentals are reflected in the quarter’s higher premium revenues, exceptional fund performance at MFS [Institutional Advisors] and impressive sales momentum. North American group businesses advanced nicely, including record earnings in our U.S. Employee Benefits Group, as did Asia, where we continue to invest.

“We are managing through the turbulent times by cutting expenses, driving efficiencies, enhancing strategic risk management and maintaining the flexibility to seize opportunities for growth,” he said. “Notwithstanding our disappointing short-term results, we are very well positioned to emerge from the recession as a stronger, more focused and competitive company.”

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Great-West Lifeco ends Q1 on a positive note

Great-West Lifeco has reported net income attributable to common shareholders of $326 million for the three months ended March 31, 2009, compared to $493 million in 2008.

On a per common share basis, this represents $0.345 for the three months ended March 31, 2009, compared to $0.552 for 2008.

Poor global equity and credit markets are cited as the primary cause for a drop in profit, compared to 2008. The company realized lower investment fee income as a result of the lowered market value of assets invested in the company’s segregated and mutual funds.

The company will maintain its quarterly common dividend at $0.3075, payable June 30, 2009. Dividends paid on common shares for the three months ended March 31, 2009, were 5% higher than a year ago.

(05/07/09)