By Suzanne Barlyn
NEW YORK (Reuters) – MetLife Inc <MET.N> expects higher U.S. interest rates to add $300 million to operating profits through 2019, the insurer said in a filing on Thursday.
The New York-based company, which provides life insurance, annuities and employee benefits, detailed anticipated benefits from higher U.S. interest rates in an 8-K filing with the U.S. Securities and Exchange Commission.
At the same time, MetLife said it would face challenges in some foreign businesses and expenses for a cost-cutting program.
MetLife forecast an earnings bump of $45 million next year, followed by $105 million in 2018 and $150 million in 2019, because of interest rate hikes.
The U.S. Federal Reserve raised rates a quarter point on Wednesday and signaled a faster pace of increases in 2017 as the Trump administration takes over with promises to boost growth through tax cuts, spending and deregulation.
Additionally, MetLife disclosed it would incur $300 million in pretax expenses in 2017 for a cost-cutting program announced earlier this year.
The company’s baseline operating earnings in its Latin American business would be about 10 percent lower in 2017, mostly due to Mexico’s declining peso, MetLife said.
Uncertainty about potential changes to MetLife’s pension business in Chile could adversely impact operating earnings in Latin America by up to 5 percent, the company said.
(Reporting by Suzanne Barlyn)