February 13, 2009 / 6:14 PM / in 9 years

UPDATE 1-IGM profit drops as falling markets hit fund sales

* Profit sinks as mutual fund sales, AUM slide

* Takes C$60.3 million charge on stake in Great-West

* Shares weaker after results

TORONTO, Feb 13 (Reuters) - IGM Financial Inc IGM.TO reported a 66 percent drop in quarterly profit on Friday as global financial turmoil hurt sales of its mutual funds and shrunk its assets under management, cutting fee income.

IGM, Canada’s No. 2 mutual fund manager, said net income fell to C$79.8 million ($64.4 million), or 30 Canadian cents a share, in the three months ended Dec. 31, from C$234.3 million, or 88 Canadian cents a share, a year earlier.

Total assets under management at the end of 2008 fell 17.3 percent from a year earlier to C$101.7 billion.

The fund manager took a C$60.3 million charge representing its share of a goodwill and asset impairment charge at Great-West Lifeco Inc GWO.TO, in which it has an equity stake.

The company said adjusted earnings per share in the quarter were 53 Canadian cents. Analysts had expected a profit of 68 Canadian cents a share before items, according to Reuters Estimates.

IGM Financial shares, already weak ahead of the results, declined further and were down C$1.02 at C$32.60 at midday on the Toronto Stock Exchange.

The Winnipeg, Manitoba-based fund manager said fee and net investment income fell to C$584 million in the quarter from C$721.6 million a year earlier.

$1=$1.24 Canadian Reporting by Jeffrey Hodgson; editing by Peter Galloway

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