Sun Life Financial posted a loss of C$396 million on writedowns tied to failed U.S. banks including Lehman Brothers, AIG and Washington Mutual.
“Unprecedented events in the global financial sector characterized the third quarter and significantly impacted our results,” said chief executive officer Donald Stewart in a statement on Tuesday.
The loss—Sun Life’s first since going public eight years ago—was reported two weeks earlier than scheduled and was compounded by declining equity values in its Canadian insurance business, which dropped 39% to $C157 million. The company’s U.S. insurance unit lost $C533 million to investment writedowns.
Sun Life’s stock has fallen 39% in 2008.
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Bank of Canada Cuts Interest Rate
The Bank of Canada (BoC) has cut its key overnight rate by 25 basis points to 2.25%. The cut itself comes as no surprise, but some had called for a cut of 50 basis points.
The cut was carried through to the BoC rate as well, which now stands at 2.5%. The BoC left the door open to further rate cuts, saying that “some further monetary policy stimulus will likely be required” to steer clear of inflation.
The BoC pointed to the global credit crisis as one of the key factors in its decision, saying that “severe strains” called for easier credit among financial institutions. Falling commodity prices have also reduced the risk of inflation in Canada.
The BoC also went on the say that the world is likely heading into a recession, and that the U.S. is already there—an assertion that U.S. Federal Reserve chair Ben Bernanke has been careful to avoid.
The Canadian economy should only manage 0.6% growth in real GDP in both 2008 and 2009, according to the BoC, before recovering in 2010 with anticipated growth of 3.4%. Inflation should remain under control, with core CPI below 2% until the end of 2010.
“Consistent with the G7 Plan of Action, major economies have announced extraordinary measures to stabilize their financial systems,” the BoC said in a statement. “These initiatives will be pivotal to resuming the flow of credit to support global economic growth. Canada’s economy and strong financial system will benefit directly from these actions.”
The BoC is not expected to revisit its interest rate decision before Dec. 9, 2008.
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New General Director for the Canadian Practice Firms Network
The Canadian Practice Firms Network (CPFN) has nominated Annie Grenier as its general director.
Grenier has many years of experience in strategic planning and project management at the international level, according to a statement. Prior to this appointment, Grenier was a business development executive at Volta Creations, and director of operations at Moncel Development.
In more than 42 countries, the CPFN offers an excellent recruitment pool for companies looking to increase their labour force. CPFN clients benefit from direct support from various governmental agencies as well as numerous private corporations who offer their business models as examples.