February 13, 2014 / 9:29 PM / 5 years ago

CI Financial profit rises 22 percent as assets climb

TORONTO (Reuters) - Canadian asset manager CI Financial Corp reported a 22 percent rise in quarterly profit on Thursday, matching expectations, as surging equity markets boosted assets under management.

While CI did not increase its dividend again as some had predicted, shares were up 0.2 percent at C$35.68 in late afternoon trade on the Toronto Stock Exchange and analysts said they expected more strength from the Toronto-based CI in 2014.

For the fourth quarter, net income rose to C$116.2 million ($105.75 million), or 41 Canadian cents a share, from C$95 million, or 34 Canadian cents a share, in the same period a year ago.

Assets under management reached a record high C$91.1 billion at December 31, up 20 percent from a year earlier, as net sales rose to C$707 million during the quarter .

CI, 37 percent owned by Bank of Nova Scotia (BNS.TO), is expected to continue to benefit from equity market gains as Canadians enter the peak investment season in the company’s first quarter of 2014.

“CI is well positioned for a very good 2014 (assuming markets remain stable), in our view. The company’s strong sales and low-cost operations suggest good leverage to rising AUM. This should support the premium valuation on the shares,” BMO Nesbitt Burns analyst John Reucassel said in a research note.

Shares of the asset manager have soared 62 percent since Scotiabank bought its stake from Sun Life at C$22 a share in October 2008, and analysts have said the price gains make it increasingly unlikely Scotia will make a move in the near term to buy the rest of the franchise.

While CI did not increase its dividend this quarter after boosting it 5.6 percent in the third quarter, for a 3.2 percent yield, Canaccord Genuity analyst Scott Chan said he could see a dividend increase next quarter based on an estimated payout ratio of 64 percent in 2014.

($1 = 1.10 Canadian dollars)

Reporting by Andrea Hopkins and Cameron French; Editing by Jeffrey Benkoe, Bernard Orr

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