iA Financial Group reported a 17% decline in fourth-quarter net income to CA$182 million as the Toronto Stock Exchange-listed insurer deployed CA$300 million on acquisitions and share buybacks, part of a strategic shift that saw the company beat its 2027 profitability target two quarters ahead of schedule and raise capital generation goals.
Net income attributed to common shareholders fell to CA$182 million for the quarter ended Dec. 31, 2025, from CA$220 million in Q4 2024. Diluted earnings per share reached CA$1.97, compared to CA$2.33 in the prior-year period.
Capital available for deployment dropped to CA$1.4 billion at Dec. 31, 2025 on a pro forma basis, down from CA$1.7 billion at Sept. 30, 2025. The decrease was primarily due to capital deployment activities, including the acquisition of RF Capital Group and share buybacks under the Normal Course Issuer Bid.
Despite the net income decline, iA Financial posted core diluted earnings per common share of CA$3.10 for the quarter, up 2% from the same period in 2024, with core earnings remaining flat at CA$287 million.
The company achieved a core return on common shareholders' equity of 17.1% for the trailing 12 months, surpassing its original 2027 target of at least 17%.
For the full year 2025, the company recorded net income attributed to common shareholders of CA$1.05 billion, up 12% from CA$942 million in 2024. Full-year core earnings reached CA$1.21 billion, up 13% from CA$1.07 billion in 2024, with diluted earnings per share increasing to CA$11.29 from CA$9.77.
Following strong operating and financial performance achieved in 2025, iA Financial Group moved forward the timeline for its core return on common shareholders' equity target from 2027 to 2026. The company reached 17.2% core ROE in the third quarter of 2025, aligning with its original 2027 target two quarters ahead of schedule.
Management expressed confidence in achieving a core ROE of 17% or more again in 2026, while reconfirming its medium-term target for annual core EPS growth above 10%.
The insurer increased its target for organic capital generation, net of dividends, to more than CA$700 million in 2026, up from the CA$650 million target achieved in 2025. The company organically generated CA$170 million in additional capital during the fourth quarter, reaching CA$665 million for the full year and surpassing the annual target.
Read more: iA Financial Group delivers strong Q3
The core dividend payout ratio was 32% in the fourth quarter, near the upper end of the target range of 25% to 35%.
The weighted average number of common shares on a diluted basis declined to 92.7 million in the fourth quarter from 94.4 million a year earlier. For the full year, diluted shares averaged 93.3 million, down from 96.4 million in 2024.
Book value per common share rose to CA$79.24 at Dec. 31, 2025, from CA$73.44 a year earlier. Assets under management and assets under administration totaled CA$341.1 billion at quarter-end, up from CA$261.3 billion at Dec. 31, 2024.
The solvency ratio stood at 133% at quarter-end.
