Interim Results - Part 1

Sun Life Fin.Services of Canada Inc
25 July 2001


PART 1

                           SUN LIFE FINANCIAL REPORTS 
                         RECORD SHAREHOLDER'S NET INCOME OF
                        $212 MILLION FOR THE SECOND QUARTER, 
                             AN INCREASE OF 8 PER CENT

HIGHLIGHTS:
- Earnings per share increased 6 per cent to $.50
- Assets under management up 3 per cent from first quarter
- Continued net fund inflows at MFS grow market share
- Reduced costs by $24 million relative to first quarter

(TORONTO - July 25, 2001) Sun Life Financial Services of Canada Inc. (NYSE/TSE:
'SLC') today reported record shareholder net income of $212 ($US 139) million
for the quarter ending June 30, 2001, an increase of 8 per cent over the $197
($US 130) million earned in the same period in 2000. Earnings per share of $0.50
($US 0.33) were up 6 per cent from the $0.47 ($US 0.31) per share earned in the
second quarter, a year ago. Revenues for the quarter were $3.945 ($US 2,595)
million, compared with $4,172 ($US 2,745) million in the second quarter of 2000,
a decrease of 5 per cent. Assets under management were $326 ($US 214) billion at
quarter end, an increase of 3 per cent compared with the $316 ($US 208) billion
at the end of the first quarter of 2001, and a decline of 1 per cent relative to
assets under management of $329 ($US 216) billion at June 30, 2000. Return on
equity was 12.3 per cent in the second quarter, up from 12.0 per cent in the
first quarter of 2001. All U.S. currency amounts were converted from Canadian
dollars at the June 30, 2001 exchange rate of $1.52.


                                     Summary

                                     Quarterly Results       Six Month Results
                                
                                  2Q'01     1Q'01     2Q'00      2001     2000

Shareholder Net Income ($)          212       202       197       414      378*
Earnings Per Share                  .50       .48       .47       .98      .92*
Revenues                          3,945     4,333     4,172     8,278    7,921
Return on Equity (per cent)        12.3      12.0      12.9      12.3     12.7* 
Average Shares Outstanding        420.7     421.4     421.0     421.0    410.5

* Pro forma
(in millions, except per share amounts and Return on Equity)


'Sun Life Financial's second quarter results demonstrate the Corporation's
ability to maintain stable earnings performance in a challenging financial
environment,' said Donald A. Stewart, Chairman and Chief Executive Officer. 'A
combination of strong sales in a number of our businesses and prudent attention
to costs across all operations helped to produce record net income for the
quarter. While Sun Life Financial's wealth management focus results in an
inherent sensitivity to North American capital markets, we are pleased that the
diversity of our business model was successful in mitigating the impact of the
market on our performance.'

C. James Prieur, President and Chief Operating Officer observed, 'The strategic
positions of the Corporation's major operating units continue to advance. This
was especially true in our Canadian operations and at MFS Investment Management
as both units achieved strong growth relative to the first quarter. We were
particularly pleased with the increase in assets under management which
recovered nicely from the first quarter providing the foundation for continued
profitability enhancements going forward. In addition, we are progressing with
our plans to close on the Keyport/IFMG acquisition in the third quarter.'

Paul Derksen, Executive Vice-President and Chief Financial Officer said, 'The
capital which will be used to fund the Keyport/IFMG acquisition was kept in
liquid form during the second quarter, and this liquidity had a restraining
impact on the quarter's profitability and return on equity which was 12.3 per
cent. Nevertheless, we are pleased with the progress made, particularly by
lowering expenses by $24 million relative to expense levels in the first
quarter.'

FINANCIAL REVIEW

At June 30, 2001, assets under management were $326 billion, a decrease of $3
billion or 1 per cent relative to the $329 billion at June 30, 2000. The
year-over-year decrease was attributable to the downturn in North American
equity markets over the past year. Relative to assets under management of $316
billion as at March 31, 2001, assets under management produced an increase of
$10 billion, or 3 per cent. This rebound was largely attributable to strong net
sales of mutual funds and managed funds totalling $8.1 billion in the second
quarter.

Total revenue in the second quarter was $3.9 billion, a decrease of $388
million, or 9 per cent, compared to the $4.3 billion recorded in the quarter
ending March 31, 2001. Contributing to this decline, were decreased sales of
European Medium Term Notes and annuities in the U.S. in addition, Group Life
premiums in Canada were lower.

Shareholder earnings for the first six months of 2001 were $414 million, up 
9 per cent over the earnings of $378 million for the first six months of 2000.

Shareholders' net income for the second quarter was $212 million, up $15
million, or 8 per cent from the $197 million earned in the second quarter of
2000. Net income, which includes earnings attributable to policyholders, was
$211 million, an increase of $18 million, or 9 per cent, as compared to the $193
million earned in the second quarter of 2000.

Net cash flows in the second quarter of 2001 were $20 million compared to net
cash flows of $76 million in the second quarter of 2000. Net cash flows in the
first six months of 2001 were $55 million compared to negative cash flows of $77
million in the first six months of 2000. At June 30, 2001 cash, cash equivalents
and short-term investments were $4.3 billion compared to $3.1 billion a year
earlier and $4.0 billion at December 31, 2000.



PERFORMANCE BY COUNTRY

CANADA

                                      Quarterly Results        Six Month Results
                                
                                  2Q'01     1Q'01     2Q'00      2001     2000

Individual Life                       8        10         4        18        3
Group Life and Health                23        12        12        35       23
Group Retirement Services            12        11         8        23       21
Spectrum and Other                    6        10         9        16       24
Investment Portfolio                  6         6         9        12        6

                Total                55        49        42       104       77


Canadian net income for the first six months of 2001 was $104 million, an
increase of $27 million or 35 per cent, over the $77 million earned in the first
half of 2000. Favourable morbidity experience in the Group Health operation
added $12 million to first half earnings. Reserve strengthening depressed
Individual Life earnings in the first six months of 2000.

Canadian Operations earned $55 million in the second quarter of 2001, an
increase of $13 million, or 31 per cent relative to the $42 million earned in
the second quarter of 2000. This increase was primarily the result of an $11
million increase in earnings from Group Life and Health.

- Individual Life reported earnings of $8 million for the current quarter, an
increase of $4 million relative to the $4 million earned in the second quarter
of 2000. The earnings increase resulted from enhanced cost efficiencies.

- Group Life and Health earned $23 million in the quarter, an increase of $11
million or 92 per cent, relative to the $12 million earned in the second quarter
of 2000. Improved mortality and morbidity experience and reduced expenses added
to earnings in the second quarter.

- Group Retirement Services earned $12 million in the second quarter of 2001, an
increase of $4 million, or 50 per cent, relative to the second quarter of 2000.
Reduced new business strain and lower expenses contributed to the increase in
earnings.

- Spectrum and Other earnings declined to $6 million in the current quarter from
$9 million in the second quarter of 2000. The earnings decrease resulted
primarily from a $1.2 billion reduction in assets under management as equity
markets valuations declined.


United States Annuity and Insurance Operations


                                     Quarterly Results         Six Month Results
                                
                                  2Q'01     1Q'01     2Q'00      2001     2000

Retirement Products and Services     1        13        14        14       29
Individual Life                     25        23        20        48       41
Group Life and Health               10         6         6        16        6
Investment Portfolio                (9)        8        18        (1)      47

                   Total            27        50        58        77      123

U.S. Annuity and Insurance Operations earned $77 million for the first six
months of 2001, a decrease of $46 million or 37 per cent from earnings of $123
million reported for the first six months of 2000. Declining assets under
management in the Retirement Product & Services line contributed to a $15
million reduction in earnings. In the first six months of 2000, the U.S.
operations included a $20 million gain from venture capital. There were no such
gains in the first six months of 2001.

In the second quarter of 2001, U.S. Annuity and Insurance Operations earned $27
million compared to $58 million in the second quarter of 2000, a decrease of $31
million, or 53 per cent. This decline was largely as the result of earnings
declines in Retirement Products and Services and in the Investment Portfolio.
The earnings of the Investment Portfolio were reduced by a more tightly hedged
book.

-  Retirement Products and Services reported earnings of $1 million, a decline
of $13 million or 93 per cent relative to the $14 million earned in the second
quarter of 2000. Margins were lower due to declining market valuations.

- Individual Life had a solid quarter earning $25 million, an increase of $5
million, or 25 per cent, relative to the $20 million earned in the second
quarter of 2000. Contributing to the increase in earnings were favourable
experience gains.

- Group Life and Health earned $10 million in the second quarter, a $4 million
increase relative to the $6 million reported in the second quarter of 2000. The
profitability growth reflects premium growth in the stop loss line and
favourable claims experience in the Long Term Disability business.


MFS Investment Management


                                      Quarterly Results        Six Month Results
                                
                                     2Q'01    1Q'01    2Q'00      2001     2000
                                    
MFS Net Income (C$mm)                   65       58       62       123      124
Assets Under Management (C$Billions)   220      209      225       220      225
Net New Sales (C$Billions)             7.8     12.4      8.4      20.2     14.7
Market Movement/Currency (C$Billions)  3.7    (24.8)    (2.5)    (21.1)    11.5


Net income earned by MFS for the first six months of 2001 was $123 million
compared to $124 million for the first six months of 2000, a decrease of only $1
million, despite a decline in assets under management of $5 billion.

MFS earned $65 million in the second quarter, an increase of $3 million, or 5
per cent, relative to the $62 million earned in the second quarter of 2000.
Relative to performance in the first quarter of 2001 earnings in the second
quarter increased by $7 million, or 12 per cent. Two factors were responsible
for MFS' ability to report relatively stable earnings performance during this
period of steep declines in U.S. equity markets: (1) net funds inflows provided
a partial offset to asset valuation declines, and (2) aggressive cost control
offset pressure on profit margins.
 
- Net new sales for the quarter were $7.8 billion.

- £2 ranking for net new retail mutual fund flows in the non-proprietary channel
  with new flows of US$4,576 million (Year-to-date May 31, 2001).

- Captured 16 per cent of retail mutual fund industry's net funds flows through 
  the non-proprietary channel.

- £4 ranking for overall mutual fund net new flows (Year-to-date May 31, 2001).

- £9 ranking by size among U.S. mutual fund companies with US$90 billion in long
  term mutual fund assets under management (May 31, 2001).

- 52 per cent of domestic retail mutual fund assets reside in one of MFS' 25    
  funds with a 4 or 5 Star Overall Morningstar Rating (May 31, 2001).


United Kingdom

                                    Quarterly Results         Six Month Results
                                
                                  2Q'01     1Q'01     2Q'00      2001     2000

UK Net Income                       50        39        33        89        50 
     

U.K. net income was $89 million in the first half of 2001, compared to $50
million in the first six months of 2000, an increase of $39 million or 78 per
cent for the period. The reduction in recurring costs associated with exiting
the direct sales force distribution business led to stronger earnings in the
first half of 2001.

On February 15, 2001, Sun Life Financial announced its decision to exit the
direct sales force distribution business in the U.K. The sales force was
terminated on March 30, 2001.

Earnings for the U.K. were $50 million in the second quarter of 2001, an
increase of $17 million, or 51.5 per cent, relative to earnings of $33 million
in the second quarter of 2000. The beneficial impact of closing the block to new
business contributed to the increase in U.K. earnings.

Asia

                                    Quarterly Results         Six Month Results
                                
                                  2Q'01     1Q'01     2Q'00      2001     2000

Asia Net Income                     10         8         5        18        12


The Asian Operations earned $18 million in the first half of 2001, an increase
of $6 million, or 50 per cent, relative to the $12 million earned in the first
half of 2000. Improved performance in the Philippines, Hong Kong and Indonesia
all contributed to the earnings increase.

Earnings for Asia in the second quarter were $10 million, an increase of $5
million, or 100 per cent relative to earnings in the second quarter of 2000,
largely due to increased net income in the Philippines. Current period earnings
include the impact of continuing investments in the Asian market in pursuit of
longer-term growth prospects.


SUN LIFE FINANCIAL

Sun Life Financial is a leading international financial services organization
providing a diverse range of wealth accumulation and protection products and
services to individuals and corporate customers. Tracing its roots back to 1871,
Sun Life Financial and its partners today have operations in key markets
worldwide, including Canada, the United States, the United Kingdom, Hong Kong,
the Philippines, Japan, Indonesia, India, and Bermuda. As of June 30, 2001 the
Sun Life Financial group of companies has total assets under management of CDN
$326 billion.

Sun Life Financial Services of Canada Inc. trades on the Toronto (TSE), New York
(NYSE) and Philippine (PSE) stock exchanges under ticker symbol 'SLC', and on
the London Stock Exchange under ticker symbol 'SFC'.


NOTE TO EDITORS:    All figures shown in Canadian dollars. Exchange rates used
by the Company for balance sheet purposes, as at June 30, 2001 were as follows:

1 USD = $1.52 
1 GBP = $2.14

Media contacts:

John Vincic              Francine Cleroux            
[phone]           [phone]

Investor Relations contact:

Thomas Rice
[phone]

Web site: www.sunlife.com


                SUN LIFE FINANCIAL SERVICES OF CANADA INC. 
                  COMPARATIVE HIGHLIGHTS - 2001 vs. 2000
                    (in millions of Canadian dollars)

                 For three months ended June 30    For six months ended June 30
                  2001       2000      Change       2001      2000     Change
 
                    $          $           %          $         $         %
Shareholders' 
Net Income (1)     212        197          8         414       378       10

Earnings Per 
Share(1)           
 
- Basic           0.50        0.47         6         0.98     0.92        7
- Fully Diluted   0.50        0.47         6         0.98     0.92        7

Weighted
Average
Number of
Shares
Outstanding

- Basic          420.7       421.0                   421.0    410.5
- Fully 
  Diluted        420.7       421.0                   421.0    410.5

Return on
Shareholders'
Equity (1)        12.3        12.9                    12.3     12.7

Gross Sales 
and Deposits

Mutual Funds    10,337      11,484                   22,668   23,894
Managed Funds    7,353       5,959                   18,052   11,646
Segregated Funds 1,479       2,180                    3,425    3,387

Revenue

Premium
Income           2,201       2,380        (8)         4,762    4,372      9
Net Investment
Income             925         980        (6)         1,866    1,955     (5)
Free Income        819         812         1          1,650    1,594      4

Total Revenue    3,945       4,172        (5)         8,278    7,921      5


                      As at June 30                        As at Dec. 31
                  2001        2000      Change                  2000

                    $           $         %                       $

Assets Under
Management

General Funds    56,475      53,521        5                    55,802
Segregated Funds 45,863      48,479       (5)                   48,741

Other Assets
Under
Management

Mutual Funds    157,523     169,820       (7)                  163,160
Managed Funds
and Other        66,587      57,882       15                    60,830

Total Assets
Under
Management      326,448     329,702       (1)                  328,533


Total Equity
Participating
Policyholders'
Account              77          80                                 79
Shareholders'
Equity            6,829       6,265                               6618

Total Equity      6,906       6,345                              6,697

MCCSR (%)           299         291                                 295


Notes:

(1) Amounts for six months ended June 30, 2000 are on a pro forma basis assuming
the Company had become public on January 1, 2000.




MORE TO FOLLOW