##### 



Sun Life Financial reports
record quarterly earnings of $477 million
 ROE hits 13.0%
 Toronto
 July 28, 2005 
   Financial Highlights
 
    
    ROE increased 100 basis points to 13.0% from 12.0% in the
second quarter of 2004, at the high end of the Companys goal
to increase its ROE by 75 to 100 basis points for the year.
    
    EPS for the quarter increased 11% compared to the second
quarter of 2004. Excluding the negative impact of the
strengthening of the Canadian dollar against foreign
currencies, EPS would have been up 16% for the quarter. This
exceeded the Companys 2005 target of 10% constant currency
earnings growth.
    
    On July 28, 2005, the Board of Directors approved an increase
in the quarterly common share dividend to 25.5 cents per
share, up 6% from 24 cents per share paid previously,
bringing the total increase this year to 16%.
    
    In the second quarter of 2005, Sun Life Financial Inc.
repurchased approximately 6 million common shares at an
average price of $39.79 under its share repurchase program.
Year-to-date 9.6 million shares have been repurchased for
$379 million, on track to achieve the stated objective of
$500 million for the year.
    
    Sun Life Financial Inc. issued $325 million of Non-Cumulative
Preferred Shares, Series 2 priced at $25 per share and paying
non-cumulative quarterly dividends of $0.30 per share,
yielding 4.8% annually. The offering closed on July 15, 2005
and provides Sun Life Financial with attractive, low-cost
capital.




---



##### 




    
    Sun Life Assurance Company of Canada redeemed its
Non-Cumulative Redeemable Class E Preferred Shares, yielding
6.5%, at $25 per share.
 Business Highlights
 Corporate Developments
 
    
    Sun Life Financial released its 2004 Public Accountability
Statement, Investing in the Future,highlighting its
charitable contributions in the community, the principles
guiding its relations with key stakeholders and its broad
economic impact in areas of financing, employment, taxes and
the environment. The Public Accountability Statement is
available in the Publications section of Sun Life Financials
website, www.sunlife.com.
    
    Sun Life Financial was ranked first among North American
insurance companies in an independent assessment of
value drivers and intangible risk factors; the study,
completed by Innovest Strategic Value Advisors, rated the
relative performance of the insurance sector on over 120
aspects of corporate governance, stakeholder capital, human
capital and emerging markets strategy, products and services.
 Sun Life Financial Canada (SLF Canada)
 
    
    Supporting the Companys expansion into the wholesale
channel, the Individual Insurance & Investments business unit
launched Sun Limited Pay Life, a universal life product that
provides a series of guarantees, including guarantees with
respect to payment periods, cost of insurance, death benefits
and cash values.
    
    Individual Insurance & Investments introduced a unique
e-signature feature that allows advisors to capture a
customers signature at the point of sale, improving service
to customers and advisors.
    
    Group Benefits entered into a strategic alliance with
WarrenShepell, one of North Americas leading Employee
Assistance Program (EAP) providers. WarrenShepell becomes SLF
Canadas preferred provider for its new EAP offering to Group
Benefits plan sponsors.
    
    After an extensive review of the marketplace, Sun Life
Financial was selected as the Ontario Hospital Association
(OHA) Sponsored Group Benefit Plans provider, covering 62,000
employees for life, optional life, accidental death and
dismemberment, and long- term disability, creating a new,
dynamic partnership with Sun Life Financial that will meet
the needs of the OHA and participating employers today and in
the future.
    
    Group Retirement Services continued to enhance its asset
retention program through a series of pre-retirement seminars
designed to help its clients employees prepare for the time
when they will receive income from their accumulated
retirement accounts.
 Sun Life Financial U.S. (SLF U.S.)
 
    
    SLF U.S. achieved its objective to strengthen its annuities
wholesaling sales force to 75 by the end of the second
quarter.
    
    The Annuities business unit, in conjunction with a
third-party vendor, launched an identity theft monitoring
service offered to customers who purchase variable or select
equity-indexed annuities; a first in the life insurance
industry.




---



##### 




    
    Gross sales in the second quarter of 2005 in Group Life &
Health were up 30%, in U.S. dollars, compared to the second
quarter of 2004.
    
    SLF U.S. issued a US$600 million funding agreement on June
10, 2005 and a US$300 million funding agreement on July 5,
2005 in connection with a medium-term note program.
 MFS Investment Management (MFS)
 
    
    MFS continued to produce positive net sales with US$3.5
billion of net inflows for the three-month period ended June
30, 2005. MFSs assets under management (AUM) reached US$150
billion at the end of June 2005.
    
    A floating rate high-grade asset-backed security (ABS)
collateralized debt obligation (CDO) issued during the
quarter added US$1 billion in AUM, representing MFSs seventh
CDO under management.
    
    MFS has been recognized as a leader in addressing sponsor and
participant concerns by providing greater transparency of its
recordkeeping and fund expenses. For its leadership in this
area, MFS was named Bundled Provider of the Year by
Defined Contribution Newsas part of the magazines 2005
Impact Player of the Year awards.
 Sun Life Financial Asia (SLF Asia)
 
    
    The Company entered into an agreement to purchase the Hong
Kong insurance and pension operations of the Commonwealth
Bank of Australia, for $560 million. The transaction, which
is subject to regulatory approval, is expected to close late
in the third quarter of this year.
 Use of Non-GAAP Financial Measures
  Analysts Conference Call




---



##### 



Sun Life Financial
   Note to Editors: All figures shown in Canadian dollars unless otherwise noted.
 Media Relations Contact:
Susan Jantzi
Manager, Media Relations
Tel: 519-888-3160
susan.jantzi@sunlife.com
    
    Investor Relations Contact:
Tom Reid
Vice-President, Investor Relations
Tel: 416-204-8163
investor.relations@sunlife.com




---



##### 



Managements Discussion & Analysis
 Earnings and Profitability
  FINANCIAL SUMMARY  Unaudited
 Quarterly Results
    
    
    Year to DateQ2/05
    
    
    
    Q1/05
    
    
    
    Q4/04
    
    
    
    Q3/04
    
    
    
    Q2/04
    
    
    
    
    2005
    
    
    
    2004Revenues ($mm)
    
    
    6,026
    
    
    
    5,119
    
    
    
    5,269
    
    
    
    5,390
    
    
    
    5,551
    
    
    
    
    11,145
    
    
    
    11,089Common Shareholders Net Income ($mm)
    
    
    477
    
    
    
    458
    
    
    
    438
    
    
    
    439
    
    
    
    438
    
    
    
    
    935
    
    
    
    803Operating Earnings1($mm)
    
    
    477
    
    
    
    458
    
    
    
    438
    
    
    
    439
    
    
    
    438
    
    
    
    
    935
    
    
    
    862Earnings Per Common Share (EPS) ($)
    
    
    0.81
    
    
    
    0.77
    
    
    
    0.74
    
    
    
    0.73
    
    
    
    0.73
    
    
    
    
    1.58
    
    
    
    1.34Operating EPS1($)
    
    
    0.81
    
    
    
    0.77
    
    
    
    0.74
    
    
    
    0.73
    
    
    
    0.73
    
    
    
    
    1.58
    
    
    
    1.44Fully diluted operating EPS1($)
    
    
    0.81
    
    
    
    0.77
    
    
    
    0.73
    
    
    
    0.73
    
    
    
    0.72
    
    
    
    
    1.57
    
    
    
    1.42Return on Common Equity (ROE) (%)
    
    
    13.0
    
    
    
    12.6
    
    
    
    12.1
    
    
    
    11.9
    
    
    
    12.0
    
    
    
    
    12.8
    
    
    
    11.2Operating ROE1(%)
    
    
    13.0
    
    
    
    12.6
    
    
    
    12.1
    
    
    
    11.9
    
    
    
    12.0
    
    
    
    
    12.8
    
    
    
    12.0Average Common Shares Outstanding (mm)
    
    
    587.4
    
    
    
    591.8
    
    
    
    595.2
    
    
    
    598.7
    
    
    
    600.7
    
    
    
    
    589.6
    
    
    
    600.4S&P 500 Index (daily average)
    
    
    1,181
    
    
    
    1,192
    
    
    
    1,162
    
    
    
    1,104
    
    
    
    1,123
    
    
    
    
    1,187
    
    
    
    1,128S&P 500 Index (close)
    
    
    1,191
    
    
    
    1,181
    
    
    
    1,212
    
    
    
    1,115
    
    
    
    1,141
    
    
    
    
    1,191
    
    
    
    1,141
 2
   
 1
    
    See Use of Non-GAAP Financial Measures. As previously disclosed,
common shareholders net income in the first
quarter of 2004 included regulatory charges
against MFS.2
    
    Or together with its subsidiaries and joint ventures the Company or Sun Life Financial.




---



##### 



Performance by Business Group
  SLF Canada
  Quarterly Results
    
    
    Year to DateQ2/05
    
    
    
    Q1/05
    
    
    
    Q4/04
    
    
    
    Q3/04
    
    
    
    Q2/04
    
    
    
    
    2005
    
    
    
    2004Revenues ($mm)
    
    
    2,104
    
    
    
    2,146
    
    
    
    2,029
    
    
    
    1,960
    
    
    
    2,032
    
    
    
    
    4,250
    
    
    
    4,173Premiums & Deposits ($mm)
    
    
    3,800
    
    
    
    5,412
    
    
    
    3,900
    
    
    
    3,942
    
    
    
    4,350
    
    
    
    
    9,212
    
    
    
    8,914Common Shareholders Net Income ($mm)Individual Insurance & Investments
    
    
    145
    
    
    
    168
    
    
    
    126
    
    
    
    121
    
    
    
    139
    
    
    
    
    313
    
    
    
    264Group Benefits
    
    
    54
    
    
    
    38
    
    
    
    63
    
    
    
    66
    
    
    
    47
    
    
    
    
    92
    
    
    
    123Group Retirement Services &
Institutional Investments
    
    
    37
    
    
    
    39
    
    
    
    35
    
    
    
    34
    
    
    
    34
    
    
    
    
    76
    
    
    
    63Total
    
    
    236
    
    
    
    245
    
    
    
    224
    
    
    
    221
    
    
    
    220
    
    
    
    
    481
    
    
    
    450ROE (%)
    
    
    14.2
    
    
    
    14.8
    
    
    
    13.7
    
    
    
    13.4
    
    
    
    13.2
    
    
    
    
    14.5
    
    
    
    13.5
   
    
    Individual Insurance & Investments earnings increased 4% over
the second quarter of 2004 due to favourable mortality
experience, favourable credit experience and increased
earnings from the investment in CI Financial Inc.
    
    Improved mortality and morbidity experience contributed to
the 15% earnings growth in Group Benefits over the second
quarter of 2004.
    
    The 9% increase in Group Retirement Services & Institutional
Investments earnings over the second quarter of 2004 was
driven by higher AUM, higher fee income and favourable credit
experience.




---



##### 



SLF U.S.
  Quarterly Results
    
    
    Year to DateQ2/05
    
    
    
    Q1/05
    
    
    
    Q4/04
    
    
    
    Q3/04
    
    
    
    Q2/04
    
    
    
    
    2005
    
    
    
    2004Revenues (US$mm)
    
    
    2,281
    
    
    
    1,539
    
    
    
    1,825
    
    
    
    1,832
    
    
    
    1,807
    
    
    
    
    3,820
    
    
    
    3,588Revenues (C$mm)
    
    
    2,835
    
    
    
    1,889
    
    
    
    2,228
    
    
    
    2,399
    
    
    
    2,453
    
    
    
    
    4,724
    
    
    
    4,802Common Shareholders Net Income (US$mm)Annuities
    
    
    72
    
    
    
    34
    
    
    
    45
    
    
    
    44
    
    
    
    33
    
    
    
    
    106
    
    
    
    95Individual Life
    
    
    20
    
    
    
    25
    
    
    
    19
    
    
    
    19
    
    
    
    33
    
    
    
    
    45
    
    
    
    43Group Life & Health
    
    
    15
    
    
    
    6
    
    
    
    12
    
    
    
    7
    
    
    
    14
    
    
    
    
    21
    
    
    
    16Total (US$mm)
    
    
    107
    
    
    
    65
    
    
    
    76
    
    
    
    70
    
    
    
    80
    
    
    
    
    172
    
    
    
    154Total (C$mm)
    
    
    132
    
    
    
    81
    
    
    
    93
    
    
    
    92
    
    
    
    109
    
    
    
    
    213
    
    
    
    206ROE (%)
    
    
    13.8
    
    
    
    8.6
    
    
    
    10.5
    
    
    
    9.9
    
    
    
    11.2
    
    
    
    
    11.2
    
    
    
    10.6
    
    
    Annuities earnings increased US$39 million compared to the second
quarter of 2004, primarily as a result of stronger equity markets,
improved spreads, the impact of the variable annuity economic
hedging program in the second quarter of 2005, and reserve
strengthening which negatively affected the second quarter of
2004. The earnings increase of US$38 million compared to the first
quarter of 2005 resulted from stronger equity markets, improved
spreads and the impact of the variable annuity economic hedging
program.
    
    Individual Life earnings were US$13 million lower in the second
quarter of 2005 compared to the second quarter of 2004, primarily
due to increased reserves due to lower interest rates in the
second quarter of 2005, which was partially offset by improved
mortality. In addition, the second quarter of 2004 benefited from
the implementation of a hedging program for universal life
products.
    
    Group Life & Health earnings increased US$9 million compared to
the first quarter of 2005 primarily due to improved claims
experience.




---



##### 



MFS Investment Management
  Quarterly Results
    
    
    Year to DateQ2/05
    
    
    
    Q1/05
    
    
    
    Q4/04
    
    
    
    Q3/04
    
    
    
    Q2/04
    
    
    
    
    2005
    
    
    
    2004Revenues (US$mm)
    
    
    332
    
    
    
    332
    
    
    
    330
    
    
    
    316
    
    
    
    319
    
    
    
    
    664
    
    
    
    660Revenues (C$mm)
    
    
    413
    
    
    
    407
    
    
    
    402
    
    
    
    414
    
    
    
    434
    
    
    
    
    820
    
    
    
    884Common Shareholders Net Income/(Loss) (US$mm)
    
    
    34
    
    
    
    37
    
    
    
    36
    
    
    
    32
    
    
    
    30
    
    
    
    
    71
    
    
    
    20Operating Earnings (US$mm)
    
    
    34
    
    
    
    37
    
    
    
    36
    
    
    
    32
    
    
    
    30
    
    
    
    
    71
    
    
    
    65Common Shareholders Net Income/(Loss) (C$mm)
    
    
    42
    
    
    
    46
    
    
    
    44
    
    
    
    42
    
    
    
    41
    
    
    
    
    88
    
    
    
    28Operating Earnings (C$mm)
    
    
    42
    
    
    
    46
    
    
    
    44
    
    
    
    42
    
    
    
    41
    
    
    
    
    88
    
    
    
    87Average Net Assets (US$B)
    
    
    147
    
    
    
    145
    
    
    
    140
    
    
    
    132
    
    
    
    138
    
    
    
    
    146
    
    
    
    141Assets Under Management (US$B)
    
    
    150
    
    
    
    145
    
    
    
    146
    
    
    
    134
    
    
    
    137
    
    
    
    
    150
    
    
    
    137Net New Sales/(Redemptions) (US$B)
    
    
    3.5
    
    
    
    0.7
    
    
    
    0.1
    
    
    
    (2.5
    )
    
    
    (5.3
    )
    
    
    
    4.2
    
    
    
    (6.5
    )Market Movement (US$B)
    
    
    1.8
    
    
    
    (2.4
    )
    
    
    12.1
    
    
    
    (0.9
    )
    
    
    0.5
    
    
    
    
    (0.6
    )
    
    
    3.6S&P500 Index (daily average)
    
    
    1,181
    
    
    
    1,192
    
    
    
    1,162
    
    
    
    1,104
    
    
    
    1,123
    
    
    
    
    1,187
    
    
    
    1,128




---



##### 



SLF Asia
  Quarterly Results
    
    
    Year to DateQ2/05
    
    
    
    Q1/05
    
    
    
    Q4/04
    
    
    
    Q3/04
    
    
    
    Q2/04
    
    
    
    
    2005
    
    
    
    2004Revenues ($mm)
    
    
    205
    
    
    
    214
    
    
    
    239
    
    
    
    189
    
    
    
    182
    
    
    
    
    419
    
    
    
    340Common Shareholders Net Income ($mm)
    
    
    19
    
    
    
    6
    
    
    
    18
    
    
    
    10
    
    
    
    10
    
    
    
    
    25
    
    
    
    17ROE (%)
    
    
    17.6
    
    
    
    5.4
    
    
    
    16.8
    
    
    
    9.3
    
    
    
    9.0
    
    
    
    
    11.4
    
    
    
    7.6
    Corporate
   Quarterly Results
    
    
    Year to DateQ2/05
    
    
    
    Q1/05
    
    
    
    Q4/04
    
    
    
    Q3/04
    
    
    
    Q2/04
    
    
    
    
    2005
    
    
    
    2004Revenues ($mm)
    
    
    538
    
    
    
    530
    
    
    
    477
    
    
    
    534
    
    
    
    576
    
    
    
    
    1,068
    
    
    
    1,126Common Shareholders Net Income/(Loss) ($mm)SLF U.K.
    
    
    39
    
    
    
    47
    
    
    
    45
    
    
    
    39
    
    
    
    42
    
    
    
    
    86
    
    
    
    89Reinsurance
    
    
    15
    
    
    
    14
    
    
    
    26
    
    
    
    21
    
    
    
    10
    
    
    
    
    29
    
    
    
    25Other
    
    
    (6
    )
    
    
    19
    
    
    
    (12
    )
    
    
    14
    
    
    
    6
    
    
    
    
    13
    
    
    
    (12
    )Total
    
    
    48
    
    
    
    80
    
    
    
    59
    
    
    
    74
    
    
    
    58
    
    
    
    
    128
    
    
    
    102




---



##### 



Additional Financial Disclosure
 Revenue
       Assets Under Management
  (i)
    
    an increase of $4.5 billion from market movements,(ii)
    
    net sales of mutual, managed and segregated funds of $4.5 billion, and(iii)
    
    an increase of $1.4 billion due to fluctuation in currency exchange rates.




---



##### 



(i)
    
    an increase of $19.6 billion from increases in capital markets, and(ii)
    
    $4.9 billion of net sales of mutual, managed and segregated funds, partially offset by(iii)
    
    $23.9 billion from the strengthening of the Canadian dollar against foreign currencies.
 Changes in the Balance Sheet and Shareholders Equity




---



##### 



Cash Flows
  Quarterly Results
    
    
    Year to Date($mm)
    
    
    Q2/05
    
    
    
    Q2/04
    
    
    
    
    2005
    
    
    
    2004Cash and cash equivalents, beginning of period
    
    
    3,961
    
    
    
    3,386
    
    
    
    
    3,748
    
    
    
    3,175Cash flows provided by (used in):Operating activities
    
    
    1,109
    
    
    
    1,447
    
    
    
    
    1,900
    
    
    
    1,501Financing activities
    
    
    (425
    )
    
    
    (290
    )
    
    
    
    (277
    )
    
    
    (280
    )Investing activities
    
    
    (282
    )
    
    
    (971
    )
    
    
    
    (992
    )
    
    
    (833
    )Changes due to fluctuations in exchange rates
    
    
    (20
    )
    
    
    56
    
    
    
    
    (36
    )
    
    
    65Increase in cash and cash equivalents
    
    
    382
    
    
    
    242
    
    
    
    
    595
    
    
    
    453Cash and cash equivalents, end of period
    
    
    4,343
    
    
    
    3,628
    
    
    
    
    4,343
    
    
    
    3,628Short-term securities, end of period
    
    
    1,892
    
    
    
    2,791
    
    
    
    
    1,892
    
    
    
    2,791Total cash, cash equivalents and short-term
securities
    
    
    6,235
    
    
    
    6,419
    
    
    
    
    6,235
    
    
    
    6,419
 Certain comparative figures have been restated to conform with the presentation adopted in the first quarter of 2005.
    Risk Management




---



##### 



Outlook
  Regulatory Matters
 www.sedar.com
 Use of Non-GAAP Financial Measures




---



##### 



Forward-Looking Statements