For the second consecutive quarter, Great-West Lifeco has achieved a base return on equity of 19.3% - meeting its stated medium-term objective of 19% or above and demonstrating that the milestone reached in Q1 2026 was not a one-off. The Winnipeg-headquartered financial services holding company posted base earnings of CA$1.270 billion for Q2 2026, up 11% from CA$1.149 billion a year earlier, with base earnings per share rising 15% to CA$1.42. Both figures beat the average analyst consensus estimate of CA$1.37 for the quarter.
Net earnings attributable to common shareholders were CA$1.039 billion, up 16% from CA$894 million in Q2 2025, producing net EPS of CA$1.16 - below the average analyst estimate of CA$1.28, reflecting unfavourable market experience primarily driven by interest rate movements in the quarter. Net ROE came in at 17.2%. The group's LICAT ratio held at 128% and holding company cash stood at CA$2.5 billion after CA$336 million of share repurchases in the quarter.
David Harney, President and CEO of Great West, said the results reflected sustained momentum in the group's core growth businesses.
"Great West delivered another quarter of strong results, with double-digit growth in base earnings, reflecting continued momentum across our Retirement and Wealth businesses," he said. "We achieved our 19%+ base ROE objective, while deploying capital strategically through the acquisition of a retirement business in the US and share repurchases. Supported by a strong balance sheet and robust capital generation, we remain well positioned to continue creating long-term value for our shareholders."
The US segment was the standout performer. Base earnings rose 34% year on year in constant currency to US$332 million (CA$458 million), driven by higher fee income from strong markets, positive plan and wealth net inflows, lower credit-related impacts, and operating leverage across both Retirement and Wealth. Base ROE in the US improved to 22.2%, up from 20.8% in the preceding quarter.
Empower's Retirement business generated US$4.9 billion in net plan flows in Q2 2026, partially offsetting net participant outflows. Empower Wealth saw net inflows of US$1.8 billion driven by rollover sales. Empower's platform generated record pre-tax base operating margins of 34.7% in Retirement - up 660 basis points from a year ago - and 40.4% in Wealth, up 970 basis points year on year.
Capital and Risk Solutions was the other major driver, with base earnings rising 35% to CA$310 million, primarily due to continued strength in Capital Solutions new business growth.
Canada posted base earnings of CA$341 million, down 9% from CA$375 million a year earlier. The decline was primarily driven by moderated Group Benefits insurance experience - meaning claims came in less favourably than expected relative to pricing assumptions - partially offset by strong Retirement and Wealth results supported by higher client assets from strong markets. The softness in Group Benefits reflects the experience variability that can arise in a single quarter and does not, in itself, indicate a structural shift in the Canadian book, though it will be watched closely in Q3.
Europe contributed CA$266 million in base earnings, up 2% year on year, with favourable Group Benefits experience and currency movements partially offset by lower trading activity.
Alongside its quarterly results, Great West announced on June 30, 2026 that Empower had agreed to acquire Milliman's retirement plan and benefits administration business for US$340 million. The transaction is expected to add approximately US$130 billion in client assets and 1.5 million participants at closing, while extending Empower's defined benefit administration and health and welfare capabilities.
The deal is expected to be accretive to base earnings in year one, generate a mid-teens internal rate of return, deliver US$20 million in cost synergies within three years, and incur approximately US$50 million in integration costs. It will be funded through Empower's existing cash resources and is expected to have no pro forma impact on Great West's cash balance or leverage ratio. The transaction remains subject to customary closing conditions and regulatory approvals, with closing expected in the second half of 2026.
Total client assets reached CA$3.7 trillion as at June 30, 2026, up 12% from CA$3.3 trillion at the end of 2025, with assets under management or advisement rising 12% to CA$1.278 trillion. Average client asset growth in the quarter was 18% in Retirement and 17% in Wealth. Book value per share of CA$29.85 grew 9% year on year.
Great West's NCIB programme was amended to double the maximum number of common shares that may be repurchased from 20 million to 40 million, with the change expected to take effect on or about July 31, 2026. That doubling of buyback capacity, while subject to market conditions and regulatory requirements, signals management's confidence in the group's ongoing free cash flow generation - Great West noted that free cash flow continued to exceed 80% of base earnings through the quarter. As at July 23, 2026, 13.4 million shares had been repurchased under the current NCIB.
The board approved a quarterly common share dividend of CA$0.67 per share, payable September 29, 2026, to shareholders of record at the close of business on September 1, 2026 - a 10% increase from the CA$0.61 per share paid in the same quarter a year earlier.
