1st Quarter Results

Sun Life Fin.Services of Canada Inc
11 May 2000

     
 
SUN LIFE FINANCIAL OF CANADA REPORTS FIRST QUARTER EARNINGS OF $197 MILLION

First Quarter Highlights 

- Net income in the first quarter was $197 million, up 55% from the same   
period in 1999
- On a stock company basis EPS was $0.45, or $181 million, up 76% from the
first quarter of 1999 on the same basis 
- Total assets under management were $321 billion, up 26% from the first
quarter in 1999
- Revenue for the period was $3.7 billion, up 5% over 1999
- Return on Equity of 12.6% in the first quarter compared favourably to the
7.1% reported in 1999's first quarter 

(TORONTO - May 10, 2000)  Sun Life Financial Services of Canada Inc. (the
Company) today released its financial results for the quarter ending March 31,
2000, reporting significantly improved net income of $197 million, an increase
of 55% from the $127 million reported over the same period in 1999. Results
for the first quarter of 1999 were impacted by charges in two areas: 
provisions for pension sales in the Company's U.K. operations and losses in
reinsurance operations.  There were no similar charges in the first quarter of
2000.

'This quarter shows solid performance trends across our major North American
operating units,' said Donald A. Stewart, Chairman and Chief Executive
Officer. 'The restructuring of our U.K. operations is on track to meet its
performance targets as originally scheduled. As part of our preparations over
the past two years for becoming a public company, we took a fresh look at our
entire franchise and identified a number of action steps to improve our
performance. On the basis of that review, we restructured a number of
operations, made numerous senior management changes and began to transform our
corporate culture to that of a publicly traded company. We are now starting to
see the results of our efforts.' 

Assets under management rose to $321 billion at March 31, 2000, an increase of
$20 billion or 7% from the $301 billion recorded on December 31, 1999 and $67
billion, or 26%, from the $254 billion recorded at March 31, 1999. This
increase was due to rising valuations in equity markets over the relevant time
periods as well as strong sales growth from MFS Investment Management (MFS),
the Company's U.S. mutual fund and investment management subsidiary.

Total revenue in the first quarter was $3.7 billion, 5% higher than the $3.6
billion recorded in the first quarter of 1999.  This performance was primarily
driven by continued strong growth in fee income from the Company's wealth
management businesses.  Fee income increased 30% to $782 million from $602
million for the same period last year.

Since the Company's conversion to a publicly held structure took place only 10
days prior to the end of the quarter, the results for the first quarter
include earnings as a mutual company.  The results for the period as a mutual
company are greater, by $16 million, than would have been reported as a stock
company.

Pro forma adjusted earnings reflect the impact of the demutualization for the
full reporting periods. Adjustments to the Company's 1999 results reflect the
exclusion of unusual items including provisions for pension sales in the
Company's U.K. operations and losses in reinsurance operations. Per share
calculations are based on the number of shares outstanding as of March 31,
2000.  Using this definition for pro forma adjusted results, earnings for the
first quarter of 2000 were $181 million and earnings per share were $0.45. 
Both measures were similar to the adjusted pro forma results for the first
quarter of 1999 of $182 million, or $0.45, but showed a significant 15%
improvement from the $154 million, or $0.39, reported in the fourth quarter of
1999. Return on equity for the first quarter of 2000 was 12.6%, up modestly
from the 12.5% recorded for the first quarter of 1999, but showing a more
significant improvement from the 10.7% recorded in the fourth quarter of 1999.

Strong Growth in Assets - Performance by Country

'Sun Life Financial of Canada's North American operations contributed solid
top line growth in the first quarter,' said C. James Prieur, President and
Chief Operating Officer.  'In other parts of the Company's international
operations, earnings were adversely impacted by various factors  including
unfavourable mortality experience in the U.K. as well as lower Philippine
equity markets and new business development costs which reduced our returns in
Asia.'  

'Our investments in new markets are beginning to show results.  While our
operations in India remain a very small part of our organization, our
explosive growth in the asset management industry in India is evidence of our
ability to compete in global markets.  Seven months into the Company's joint
venture with the Aditya Birla Group, Birla Sun Life Asset Management Company
overtook the State Bank of India Mutual Fund to become the second largest
player in the business and accounts for about 18% of the private sector mutual
funds,' added Mr. Prieur.

Canada:  In Canada, pro forma adjusted earnings were $35 million compared to
$27 million in the first quarter of 1999, an improvement of $8 million, or
30%. Canadian protection businesses reported higher earnings as stronger
pricing in our Group businesses, as well as favourable mortality and morbidity
experience contributed to improved returns.  Earnings growth also included
strong performance in our Canadian wealth management business, with both
Spectrum United and McLean Budden reporting solid results for the quarter. 

These combined gains were more than sufficient to offset the charge of $6
million which arose from the change in the corporate tax rate.

United States: Pro forma adjusted earnings rose by 71% in the U.S. operations
(excluding MFS) to $65 million from $38 million in the first quarter of 1999,
an increase of $27 million. Strong gains in venture capital were partially
offset by increased asset provisions for a net contribution of $25 million. In
addition, first quarter results in 1999 included a $5 million after-tax gain
related to the sale of MCIC.  Product sales in the Company's wealth management
businesses enjoyed strong market reception with sales of annuity products up
20%, or $183 million, from $935 million in the first quarter of 1999 to $1,118
million in 2000.  In the Company's protection business, earnings rose by 40%
to $21 million as improvements in mortality enhanced profitability. 

MFS Investment Management:   MFS reported net income of $62 million for the
quarter ended March 31, 2000, an increase of $24 million, or 63%, from the $38
million reported in the same period last year.  This earnings growth resulted
from the impact of strong growth in assets under management on fee revenues. 
Sales of mutual and managed funds were up $2.6 billion from $13.7 billion in
1999 to $16.3 billion in the first quarter of 2000. 

United Kingdom: Pro forma adjusted earnings in the Company's U.K. operations
were $17 million for the first quarter of 2000 compared with $55 million for
the same period in 1999, a decline of $38 million. The major components of
this decline included: (1) a non-recurring tax adjustment in 1999; (2) adverse
claims experience in the Group Life business; and (3) the impact of lost
investment income on capital consumed by losses in 1999. Also contributing to
this decline was the highly volatile nature of quarterly results in 1999.  The
$55 million adjusted earnings reported in 1999's first quarter represented
more than half the full year's adjusted earnings of $101 million, or $30
million higher than the average quarter's returns. The Company has fully
achieved each of the interim milestones in the restructuring plan for its U.K.
operations and continues to demonstrate commendable progress relative to
objectives for future performance improvements.

Asia:  Asian operations recorded pro forma adjusted earnings of $7 million, a
decline of $8 million from the $15 million earned in the first quarter of
1999. This reduction in income reflected the impact of three factors: (1)
lower yields on investments resulting from the decline in Philippine equity
markets; (2) a return to normal mortality experience in Hong Kong operations;
and (3) additional investment of $2 million relating to our growth strategy to
develop markets for protection products in China as well as investments in
mutual funds in India and the Philippines. 


Demutualization and Initial Public Offering

Commenting on the conversion to a stock company, Mr. Stewart said, 'The
successful initial public offering of the Company's shares in late March
marked the culmination of the demutualization process.  

The listing of our shares on major international stock exchanges provides the
Company with greater financial flexibility and supports our plans for growth
in the business.' 

'Our shares were priced during a period of considerable volatility in the
financial markets,' remarked Mr. Stewart. 'The favourable movement in the
price of our stock following the IPO indicates a gratifying level of
shareholder confidence in the future of the Company.' 

Common shares of the Company were listed on March 23, 2000 on the Toronto, New
York and London stock exchanges and on March 24, 2000 on the Philippine Stock
Exchange. 

Completing Divestitures allows Focus on Core Competencies

In the first quarter of 2000, a number of previously announced divestitures
were completed and further progress was made in resolving the Company's
involvement in the Unicover matter.   

The sale of the Sun Life Reinsurance Group's life retrocession operations to
Clarica Life Insurance Company for proceeds of approximately $171 million
closed on April 10, 2000. The gain on the sale of $79 million was reflected in
fiscal 1999.  

On March 1, 2000, the sale of a portion of Sun Life Trust, including the
deposit liabilities and mortgage assets, was completed. This disposition
resulted in a $2 billion reduction in general funds assets, which declined
$1.9 billion in the first quarter. 

In addition, the Company completed settlements on March 30, 2000 that resolve
another portion of the Unicover reinsurance matter.  Financial provisions
related to this and other settlements were made in the fourth quarter of 1999
and do not affect the results in 2000. 

Implementing Strategic Initiatives

'Our solid and balanced business profile provides a basis for continued
growth,' said Mr. Stewart. 'A number of initiatives were undertaken during the
first quarter designed to advance the Company's commitment to improving
performance and building shareholder value.' 

- Concurrent with its listing on major international stock exchanges, the
Company launched the Sun Life Financial of Canada brand.  The new brand
provides a unifying identity for our diversified group of companies and
differentiates the member group companies in an increasingly competitive
marketplace. 

- The U.S. operation received a Key Honors award from DALBAR, the U.S. mutual
fund industry measurement agency, relating to the high quality of customer
service the company consistently provided to its annuity investors in 1999.

- The Canadian operation entered into an agreement in principle to form a
product distribution alliance with CNA Life Insurance Company of Canada. Under
the agreement, Sun Life Financial of Canada's distribution system in Canada
will be able to offer CNA Life's term insurance products in addition to Sun
Life Financial of Canada's current term portfolio. This arrangement builds on
the Intercorporate Alliance that was forged in 1999 with Great-West Life,
London Life and Investors Group and allows clients to access a complete
portfolio of high quality products in the easiest, most convenient manner. 


- The sale of several real estate holdings in Canada including the Merrill
Lynch Tower of the Sun Life Centre in Toronto and one-half interest in the Sun
Life Building in Montreal were completed during the quarter. These
transactions were a part of the Company's strategy to bring additional balance
to its investment portfolio.

Sun Life Financial

Sun Life Financial Services of Canada Inc. is the newly formed, publicly held
parent company of Sun Life Assurance Company of Canada.  Tracing its roots
back to 1871, Sun Life Financial of Canada has grown to become a leading
international provider of financial services with total assets under
management of $321 billion (as at March 31, 2000).    

The Sun Life Financial of Canada group of companies provides a wide range of
savings, retirement, pension and life and health insurance products and
services to individuals and corporate customers in Canada, the United States,
the United Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India,
Bermuda and Chile.   Sun Life Financial Services of Canada Inc. trades on the
Toronto (TSE), New York (NYSE) and Philippine (PSE) stock exchanges under the
ticker symbol 'SLC', and on the London Stock Exchange (LSE) under the ticker
symbol 'SFC'.


NOTE TO EDITORS: All figures shown in Canadian dollars. 

Media contacts:
Audrey Gouskos              
 [phone]       

Investor Relations contact:
Thomas Rice
[phone]

Web site:       www.sunlife.com


SUN LIFE FINANCIAL SERVICES OF CANADA INC.
COMPARATIVE HGHLIGHTS - 2000 vs. 1999
(in millions of Canadian dollars)

                                       At and for three months ended March 31
                                        2000              1999         Change
                                          $                 $            %

Revenue
  Premium Income                       1,992             1,923           4
  Net Investment Income                  963             1,038          (7)
  Fee Income                             782               602          30
  Total Revenue                        3,737             3,563           5

Net Income from Continuing Operations    197               159          24
Discontinued Operations, net of 
  income taxes                             -               (32)
Net Income                               197               127          55

Gross Sales and Deposits              
  Mutual Funds                        12,410            11,881           4
  Managed Funds                        5,687             3,756          51
  Segregated Funds                     1,207             1,088          11

Assets under Management
  General Funds                       52,838            54,117          (2)
  Segregated Funds                    48,055            38,811          24
  Other Assets under Management
     Mutual Funds                    166,543           124,472          34
     Managed Funds and Other          53,978            37,103          45
  Total Assets under Management      321,414           254,503          26

Equity
  Participating Policyholders' Equity     84                 -
  Shareholders' Equity                 5,814                 -
  Policyholders' Surplus                   -             6,025
                                       5,898             6,025

MCCSR (%)                                266               270


SUN LIFE FINANCIAL SERVICES OF CANADA INC.
COMPARATIVE HIGHLIGHTS - 2000 vs. 1999
(in millions of Canadian dollars)

                                                        
                                        At and for three months ended March 31
                                           2000          1999        Change
                                   Note     $             $           %

Pro Forma Results 
    (adjusted in 1999)             (1)       
      
  Pro Forma Net Income Attributable 
    to Shareholders                         181          182
  Pro Forma Earnings Per Share     (2)     0.45         0.45
  Pro Forma Return on Equity       (3)     12.6%        12.5%


  Segmented Pro Forma Net Income   (4)
    Canada                                   35           27           30
    US (excl. MFS)                           65           38           71
    MFS                                      62           38           63
    UK                                       17           55          (69)
    Asia                                      7           15          (53)    
    Corporate & Other                        (5)           9     
                                            181          182
                                                                              
   ============== 
(1) Reflects Pro forma results attributable to shareholders assuming the
Company had become public on January 1, 1999.  1999 pro forma net income has
also been adjusted for $62 million provisions for U.K. pensions sales and $32
million of losses from discontinued operations, less $15 million gain on sales
of MFS shares.
(2) Pro forma earnings per share in Canadian dollars, have been calculated
using pro forma net income for the period and 400.1 million shares outstanding
as at March 31, 2000.
(3) Pro forma return on equity has been calculated using pro forma net income
and average equity for the period.
(4) 1999 amounts have been restated to reflect changes in the Company's
internal segmented reporting.