Sun Life Financial Inc. announced on Tuesday record fully diluted operating earnings per share of 96¢ for the quarter ended March 31, up 14.3% over fully diluted operating EPS of 84¢ in Q1 2006. Operating return on equity was 13.5% for the quarter, up from 13.2% in the first quarter of 2006.

“Our diversified earnings platform once again delivered strong earnings growth this quarter as we continued to invest in global distribution and growth opportunities,” said Donald A. Stewart, CEO. “Looking ahead, our strong risk management capabilities will enable us to more effectively manage through changing economic conditions.”

“We remain focused on our financial commitments to shareholders. We continue to deliver EPS growth and operating ROE improvement while executing on key strategic initiatives and strengthening our capital position,” noted Richard P. McKenney, who’s in his first quarter as executive vice president and chief financial officer.

Operating earnings exclude after-tax charges to earnings of $43 million related to the intangible asset write-down for the retirement of the Clarica brand and $18 million for the premium payable to redeem US$600 million of 8.526% Cumulative Capital Securities. Including these charges, fully diluted EPS and ROE for the quarter were $0.86 and 12.0%, respectively.

During Q1, SunLife progressed on a number of its strategic objectives and continued to deliver on its growth and distribution expansion strategies in each of its markets.

For instance, individual life insurance sales in Canada increased by 24% in the Q1 over the same period last year on growth in both Sun Life’s career sales force and wholesale channel sales.

In addition, Sun Life Financial Canada’s individual insurance and investments business unit, in partnership with CI Investments, launched its SunWise Elite Plus Guaranteed Minimum Withdrawal Benefit rider. The new rider builds on the well-established SunWise Elite segregated funds and is directed at Canadians who are focused on the income phase of retirement planning.

Financially, operating ROE increased 30 basis points to 13.5% from operating ROE of 13.2% in Q1 2006. Operating ROE was reduced by 45 bps this quarter as a result of $564 million of opening equity adjustments required by changes to Canadian investment accounting rules that came into effect on Jan. 1. ROE of 12% decreased 110 bps from 13.1% in Q1 2006.

Sun Life Financial declared $183 million in common shareholder dividends during the quarter, representing a payout ratio of 33%.

Sun Life Financial repurchased approximately 2.4 million common shares for $124 million during the first quarter of 2007.

In related news, Sun Life Financial also announced on Tuesday that a quarterly shareholder dividend of $0.32 per common share, payable July 3 to shareholders of record at the close of business on May 23. This is the same amount as paid in the previous quarter.

Sun Life Financial Inc. also announced quarterly dividends of $0.296875 per Class A Non-Cumulative Preferred Share Series 1; $0.30 per Class A Non-Cumulative Preferred Share Series 2; $0.278125 per Class A Non-Cumulative Preferred Share Series 3; $0.278125 per Class A Non-Cumulative Preferred Share Series 4; and $0.28125 per Class A Non-Cumulative Preferred Share Series 5, payable June 29 to shareholders of record at the close of business on May 23.