(Reuters) - CI Financial Corp (CIX.TO) said on Thursday that its profit fell in the second quarter, despite efforts to cut costs, as gloomy global markets and net redemptions sideswiped assets under management.
Canada’s No. 3 investment fund company, which is 36 percent owned by Bank of Nova Scotia (BNS.TO), said it earned C$71.3 million ($72 million), or 25 Canadian cents a share, in the quarter, down sharply from C$98.3 million, or 34 Canadian cents a share, a year earlier.
The results included a future income tax expense related to the Ontario government’s decision to delay tax cuts.
Excluding the impact of that, earnings per share would have been 32 Canadian cents, down 6 percent from the same quarter a year earlier and in line with the average expectation of analysts, according to Thomson Reuters I/B/E/S.
Declines in global financial markets have hit asset managers hard, shrinking assets under management and discouraging new sales of funds.
“CI has performed very well in an incredibly challenging environment,” Chief Executive Stephen MacPhail said in a statement. “Debt and slowing growth continue to impact the world’s largest economies, leading to volatility for the major equity markets.”
In its quarterly results, the company noted its total assets — which include mutual, segregated, and hedge funds, separately managed accounts, structured products, pooled assets, and assets under administration — grew 3 percent in the first six months of 2012, even as the Toronto Stock Exchange’s benchmark S&P/TSX composite index .GSPTSE declined 2 percent.
But the fund company said earlier this week assets under management as of July 31 were C$71.7 billion, down 1.7 percent from C$72.9 billion a year earlier.
Reporting By Andrea Hopkins; Editing by Peter Galloway