noted.

TORONTO, Aug. 6 /PRNewswire-FirstCall/ - Sun Life Financial Inc. (TSX/NYSE: SLF) reported net income of $591 million for the second quarter of 2009, compared with net income of $519 million in the same period last year. Fully diluted earnings per share was $1.05 compared to fully diluted earnings per share of $0.91 in the second quarter of 2008, an increase of $0.14. Return on equity was 14.9% for the quarter, up from 12.9% reported in the same quarter last year.

Results in the second quarter of 2009 were favourably impacted by reserve releases as a result of higher equity markets, increased interest rates and the positive impact of narrowing credit spreads. Strong results from improvements in capital markets in the second quarter were partially offset by increased reserves for downgrades on the Company's investment portfolio, changes in asset default assumptions in anticipation of future credit-related losses, as well as credit impairments incurred during the quarter.

The Company's capital levels remain strong and well balanced to support the risks associated with the business while optimizing shareholder return. As at June 30, 2009, the Company reported a Minimum Continuing Capital Surplus Requirement (MCCSR) ratio of 231% for Sun Life Assurance Company of Canada.

"Equity markets showed substantial improvement in the second quarter resulting in strong earnings gains," said Donald A. Stewart, Chief Executive Officer, Sun Life Financial. "Equally impressive was the strength and momentum in our businesses. In Canada, strong brand and distribution remain critical during volatile market conditions. In our U.S. insurance business sales benefited from a flight to quality, while at MFS continued excellence in investment performance resulted in positive net flows."

He went on to say "Recent equity market gains are encouraging, however a full, broad-based economic recovery will take time and credit conditions remain a headwind in the current environment. Earnings continue to be heavily influenced by external economic factors and will again be a factor in the third quarter as we update our equity and interest rate related assumptions in accordance with professional guidance for reserving and capital. We remain focused on maintaining a healthy capital base, well in excess of minimum regulatory levels. While market turbulence can result in quarterly earnings volatility it does not diminish the underlying strength of our businesses."

MANAGEMENT'S DISCUSSION & ANALYSIS

For the period ended June 30, 2009

Dated August 6, 2009

Earnings and Profitability

The financial results presented in this document are unaudited.

FINANCIAL SUMMARY

Quarterly Results__ Year to date

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Q2'09__ Q1'09__ Q4'08__ Q3'08__ Q2'08__ 2009__ 2008

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Common shareholders'

net income (loss)

($ millions)__ 591__ (213)__ 129__ (396)__ 519__ 378__ 1,052

Operating earnings

(loss)(1)

($ millions)__ 591__ (186)__ (696)__ (396)__ 519__ 405__ 1,052

Basic earnings

(loss) per common

share (EPS) ($)__ 1.06__ (0.38)__ 0.23__ (0.71)__ 0.92__ 0.68__ 1.87

Fully diluted

EPS ($)__ 1.05__ (0.38)__ 0.23__ (0.71)__ 0.91__ 0.67__ 1.85

Fully diluted

operating

EPS(1) ($)__ 1.05__ (0.33)__ (1.25)__ (0.71)__ 0.91__ 0.72__ 1.85

Return on common

equity (ROE) (%)__ 14.9__ (5.5)__ 3.3__ (10.2)__ 12.9__ 4.7__ 13.2

Operating ROE(1)__ 14.9__ (4.7)__ (17.9)__ (10.2)__ 12.9__ 5.1__ 13.2

Average common

shares

outstanding

(millions)__ 559.8__ 559.7__ 559.7__ 559.7__ 561.6__ 559.7__ 562.7

Closing common

shares

outstanding

(millions)__ 560.7__ 559.7__ 559.7__ 559.7__ 559.9__ 559.8__ 559.9

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Sun Life Financial Inc.(2) reported net income attributable to common shareholders of $591 million for the quarter ended June 30, 2009, compared with net income of $519 million in the second quarter of 2008. Net income in the second quarter of 2009 was impacted by reserve releases of $432 million as a result of favourable equity markets, $104 million from increased interest rates and $117 million from the favourable impact of narrowing credit spreads. This was partially offset by $217 million in reserve increases for downgrades on the Company's investment portfolio, $97 million in reserve increases related to changes in asset default assumptions in anticipation of future credit-related losses and $121 million in net credit impairments incurred during the quarter. Results in the second quarter of 2008 included earnings of $26 million or $0.05 per share from the Company's 37% ownership interest in CI Financial, which the Company sold in the fourth quarter of 2008.

Return on equity (ROE) for the second quarter of 2009 was 14.9% compared with 12.9% for the second quarter of 2008. The increase in ROE resulted from earnings per share (EPS) of $1.05, which was higher than EPS of $0.91 reported in the prior year.

Common shareholders' net income for the first six months of 2009 was $378 million, compared to $1,052 million in the same period in 2008. Net income in the first six months of 2009 was adversely affected by reserve increases for downgrades on the Company's investment portfolio, changes in asset default assumptions in anticipation of future credit-related losses and net credit impairments. This was partially offset by favourable equity markets and increased interest rates in the second quarter of 2009. Results for the first six months of 2008 included earnings of $69 million from the Company's 37% ownership interest in CI Financial.

Operating net income for the first six months of 2009 was $405 million, compared to $1,052 million in the first six months of 2008. Operating net income for the first six months of 2009 included after- tax charges of $27 million for restructuring costs taken as part of the Company's efforts to reduce expense levels and improve operational efficiency.

Impact of Currency

In general, the Company's net income benefits from a weakening Canadian dollar as net income from the Company's international operations is translated back to Canadian dollars. The relative impact of currency in any given quarter is driven by the movement in currency rates as well as the proportion of earnings generated in the Company's foreign operations. The Company generally expresses the impact of currency on net income on a year-over-year basis. During the second quarter of 2009 the Canadian dollar appreciated relative to the U.S. dollar, however, year-over-year the value of the Canadian dollar weakened. In the second quarter of 2009, the Company's overall net income was increased by $72 million from the weakening of the Canadian dollar relative to the second quarter of 2008.

Future Impact of Certain Prospective Actuarial Assumption Changes

As a result of pronounced market volatility over the past year and in accordance with professional guidance for reserving and capital, the Company expects to update the equity and interest rate related assumptions used to value variable annuity, segregated fund, certain fixed annuity and individual life liabilities in the third quarter of 2009. While the precise impact is not yet determinable, the Company estimates that there will be an unfavourable impact to net income as a result of these updates in the range of $450 million to $550 million after-tax, including management actions. In addition, the Company expects that these updates will reduce its regulatory capital ratios. However, the Company expects to remain strongly capitalized after these updates are in effect. The estimated impact of these changes is forward-looking information. Additional information on these changes can be found in the "Outlook" section of this document.

Performance by Business Group

The Company manages its operations and reports its results in five business segments: Sun Life Financial Canada (SLF Canada), Sun Life Financial U.S. (SLF U.S.), MFS Investment Management (MFS), Sun Life Financial Asia (SLF Asia) and Corporate. Additional detail concerning the segments is outlined in Note 5 to Sun Life Financial Inc.'s Interim Consolidated Financial Statements, which are prepared in accordance with Canadian generally accepted accounting principles (GAAP). Where appropriate, information on a business segment is presented both in Canadian dollars and the segment's local currency to facilitate the analysis of underlying business trends.

SLF Canada

Quarterly results__ Year to date

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Q2'09__ Q1'09__ Q4'08__ Q3'08__ Q2'08__ 2009__ 2008

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Common shareholders'

net income (loss)

($ millions)

Individual

Insurance &

Investments__ 136__ 77__ (130)__ 28__ 177__ 213__ 326

Group Benefits__ 53__ 65__ 74__ 81__ 80__ 118__ 129

Group Wealth__ 28__ 52__ 1__ 48__ 39__ 80__ 88

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Total__ 217__ 194__ (55)__ 157__ 296__ 411__ 543

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SLF Canada had net income of $217 million in the second quarter of 2009 compared to net income of $194 million in the first quarter of 2009 and earnings of $296 million in the second quarter of 2008. The decrease in earnings from the second quarter of 2008 was mainly attributable to unfavourable interest rate related hedge impacts, changes in asset default assumptions in anticipation of future credit-related losses, lower morbidity gains and increased tax provisions. This decline in earnings was partially offset by the impact of increasing equity markets during the second quarter of 2009. Results in the second quarter of 2008 included earnings from the Company's 37% ownership interest in CI Financial, which the Company sold in the fourth quarter of 2008.

-__ Individual Insurance & Investments earnings were $136 million for the

second quarter of 2009 compared to earnings of $177 million in the

second quarter of 2008. Earnings in the second quarter of 2009 were

lower due to unfavourable interest rate related hedge impacts,

changes in asset default assumptions, lower earnings due to the sale

of the Company's ownership interest in CI Financial and increased tax

provisions. This decline in earnings was partially offset by the

impact of increasing equity markets.

-__ Group Benefits earnings were $53 million for the second quarter of

2009 compared to $80 million for the same quarter of 2008 due

primarily to lower morbidity gains and changes in asset default

assumptions.

-__ Group Wealth earnings were $28 million for the second quarter of 2009

compared to $39 million for the same quarter one year ago due

primarily to changes in asset default assumptions.

Earnings for the first six months of 2009 were $411 million compared to $543 million for the same period last year. Net income decreased primarily from lower earnings due to the sale of the Company's holdings in CI Financial, unfavourable interest rate related hedge impacts and changes in asset default assumptions in anticipation of future credit-related losses.

Despite the challenging economic environment in the second quarter of 2009, SLF Canada maintained sales momentum. Sales of Individual fixed interest products, including accumulation annuities, GICs and payout annuities, increased 119% from the same period a year ago to $248 million. In Group Benefits, sales increased by 68% to $69 million in the second quarter of 2009 compared with the same period last year. In Group Wealth, Group Retirement Services (GRS) sales included $193 million of retained assets from members leaving plans, representing a 46% retention ratio. GRS continued to build on its leadership position in the Defined Contribution (DC) industry in the first quarter of 2009 capturing 57% of total DC market activity, as recently reported by LIMRA.

SLF U.S.

Quarterly results__ Year to date

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Q2'09__ Q1'09__ Q4'08__ Q3'08__ Q2'08__ 2009__ 2008

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Common shareholders'

net income (loss)

(US$ millions)

Annuities__ 212__ (324)__ (672)__ (456)__ 22__ (112)__ 97

Individual

Insurance__ 95__ (57)__ 95__ (76)__ 35__ 38__ 54

Employee Benefits

Group__ 30__ 48__ 1__ 30__ 25__ 78__ 44

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Total

(US$ millions)__ 337__ (333)__ (576)__ (502)__ 82__ 4__ 195

Total

(C$ millions)__ 422__ (407)__ (679)__ (533)__ 83__ 15__ 196

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SLF U.S. had net income of C$422 million in the second quarter of 2009 compared to a net loss of C$407 million in the first quarter of 2009 and earnings of C$83 million in the second quarter of 2008. The depreciation of the Canadian dollar against the U.S. dollar increased the reported income in SLF U.S. by C$57 million in the second quarter of 2009 compared to the second quarter of 2008.

In U.S. dollars, earnings were US$337 million compared to earnings of US$82 million in the second quarter of 2008. Results were higher primarily from the favourable impact of equity markets, the narrowing of credit spreads and increasing interest rates. The favourable impacts on earnings were partially offset by reserve increases related to changes in asset default assumptions in anticipation of future credit-related losses and downgrades on the investment portfolio, as well as net credit impairments incurred during the quarter.

-__ Annuities earnings were US$212 million compared to earnings of

US$22 million in the second quarter of 2008. Earnings were higher

primarily due to improved equity markets and the favourable impact of

narrowing credit spreads on fixed annuities resulting in a decrease

in reserves. This was partially offset by hedge impacts, reserve

increases for changes in asset default assumptions and downgrades on

the investment portfolio, as well as net credit impairments incurred

during the quarter.

-__ Individual Insurance earnings for the second quarter of 2009 were

US$95 million compared to earnings of US$35 million in the second

quarter of 2008. Earnings increased primarily as a result of

favourable interest rate movements and the impact of additional

hedging activity, partially offset by reserve increases in

anticipation of higher funding costs for universal life products with

secondary guarantees.

-__ Employee Benefits Group (EBG) earnings were US$30 million compared to

US$25 million in the second quarter of 2008. Earnings were higher as

a result of increased interest rates during the quarter and the

impact of favourable claims experience.

Earnings for the first six months of 2009 were US$4 million compared to US$195 million for the same period last year. Earnings were lower primarily due to the impact of credit-related allowances and credit-related losses in Annuities, and the unfavourable impact from the implementation of an internal reinsurance transaction in Individual Insurance for capital efficiency. These decreases were partially offset by favourable interest rate movements and favourable EBG claims experience. EBG earnings for the first six months of 2009 were US$34 million higher than the same period last year.

Despite challenging financial markets, domestic variable and fixed annuity sales in the second quarter of 2009 were US$1.3 billion and EBG sales were US$126 million, an increase of 76%, and 3%, respectively, compared to the second quarter of 2008. Although Individual Life second quarter 2009 sales of US$60 million were down 39% compared to the second quarter of 2008, sales of Individual Life core products were up 33% compared to the same period a year ago.

MFS Investment Management

Quarterly Results__ Year to date

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Q2'09__ Q1'09__ Q4'08__ Q3'08__ Q2'08__ 2009__ 2008

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Common shareholders'

net income

(US$ millions)__ 27__ 23__ 25__ 47__ 55__ 50__ 114

Common shareholders'

net income

(C$ millions)__ 32__ 28__ 30__ 49__ 56__ 60__ 115

Pre-tax operating

profit margin

ratio(3)__ 23%__ 21%__ 21%__ 29%__ 34%__ 22%__ 34%

Average net assets

(US$ billions)__ 140__ 125__ 133__ 176__ 191__ 133__ 189

Assets under

management

(US$ billions)__ 147__ 124__ 134__ 162__ 183__ 147__ 183

Net sales

(redemptions)

(US$ billions)__ 4.9__ 0.2__ (2.1)__ (2.0)__ 1.0__ 5.1__ (1.7)

Asset appreciation

/ (depreciation)

(US$ billions)__ 17.9__ (10.7)__ (25.5)__ (19.4)__ (2.0)__ 7.2__ (14.5)

S&P 500 Index

(daily average)__ 893__ 811__ 910__ 1,255__ 1,371__ 852__ 1,360

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MFS had net income of C$32 million in the second quarter of 2009 compared to earnings of C$28 million in the first quarter of 2009 and earnings of $56 million in the second quarter of 2008. The movement of the Canadian dollar against the U.S. dollar increased earnings for MFS by C$4 million in the second quarter of 2009 compared to the second quarter of 2008.

In U.S. dollars, second quarter earnings were US$27 million compared to US$55 million in the second quarter of 2008. The decrease in earnings from the second quarter of 2008 was primarily due to lower average net assets as a result of the decline in global financial markets.

Six-month earnings were US$50 million compared to US$114 million in the same period last year. The decrease is primarily due to lower average net assets as a result of the decline in global financial markets.

Total assets under management at June 30, 2009 were US$147 billion, an increase of US$13 billion compared to December 31, 2008, driven by asset appreciation of US$7.2 billion and net inflows of US$5.1 billion.

Net flows in the second quarter of 2009 were US$4.9 billion, including retail net flows of US$1.2 billion. MFS' retail fund performance remains strong with 92% of fund assets ranked in the top half of their respective Lipper categories based on three-year performance. Performance in the U.S. equity and global/ international equity categories has been especially strong, with 93% and 97% of fund assets, respectively, ranking in the top half of their respective three-year Lipper averages as of June 30, 2009.

SLF Asia

Quarterly results__ Year to date

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Q2'09__ Q1'09__ Q4'08__ Q3'08__ Q2'08__ 2009__ 2008

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Common shareholders'

net income (loss)

($ millions)__ 20__ 17__ 16__ (8)__ 12__ 37__ 25

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Second quarter earnings for SLF Asia were $20 million compared to earnings of $17 million in the first quarter of 2009 and $12 million in the second quarter of 2008. The increase in earnings from the second quarter of 2008 was primarily due to increased net income in Hong Kong as a result of improved economic conditions including favourable equity and interest rate movements.

Earnings for the first six months of 2009 were $37 million compared to $25 million for the same period last year. Earnings were higher primarily from increased net income in Hong Kong as a result of improved economic conditions. Results for the first six months of 2008 were unfavourably impacted by the widening of credit spreads in Hong Kong.

Sales in SLF Asia for the first six months were down 1.5% compared to the first six months of 2008 with continued growth in India offset by a slow down in sales in other markets. Reduced preference for investment-linked products created by volatile economic conditions has been mostly offset by increased demand for traditional insurance products. In India, Birla Sun Life Asset Management Company, the Company's mutual fund joint venture was awarded Mutual Fund House of the Year for 2008 by CNBC-CRISIL. The award, which recognizes outstanding mutual fund performance, has been awarded to Birla Sun Life Asset Management two years in a row, a first in the Indian Mutual Fund industry. On July 15, 2009, the new joint venture between Sun Life Financial and Commerce International Merchant Bankers Group received regulatory approval. The joint venture will enable Sun Life Financial's life, accident and health insurance products to be distributed through the 600- plus branches of PT Bank CIMB__ Niaga in Indonesia.

Corporate

Corporate includes the results of Sun Life Financial U.K. (SLF U.K.) and Corporate Support, which includes the Company's reinsurance businesses as well as investment income, expenses, capital and other items not allocated to Sun Life Financial's other business segments.