March 14, 2012 / 3:29 PM / 6 years ago

UPDATE 1-Power Financial profit rises on insurance gain

* Profit boosted by release of litigation reserve

* Shares up 3.3 pct

TORONTO, March 14 (Reuters) - Power Financial’s quarterly profit rose 37 percent, helped by the release of a litigation provision at its Great-West Lifeco subsidiary, the company said on Wednesday.

The Montreal-based company earned C$533 million ($538 million), or 75 Canadian cents a share, in the fourth quarter, up from C$389 million, or 55 Canadian cents a share, in the year-before period.

Excluding items, operating profit was 60 Canadian cents a share. Analysts had expected, on average, a profit of 59 Canadian cents per share, according to Thomson Reuters I/B/E/S.

Power Financial, which is controlled by Montreal’s Desmarais family through its Power Corp holding company, also owns a majority interest in Canadian mutual fund company IGM Financial and a major stake in Swiss-based Pargesa Holding SA.

Profit was boosted by a C$88 million gain related to a reduction in litigation provisions originally taken by Great-West in 2010.

On an operating basis, Great-West contributed C$342 million to Power Financial’s profit, up from C$319 million, while IGM contributed C$113 million, down from C$119 million.

Shares of the company were up 3.3 percent at C$29.26 on the Toronto Stock Exchange, making most of the gain prior to the mid-morning earnings release.

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