February 21, 2008 / 10:40 PM / 10 years ago

UPDATE 1-Fairfax Financial profit jumps on credit swaps

(Adds details. In U.S. dollars)

VANCOUVER, British Columbia, Feb 21 (Reuters) - Fairfax Financial Holdings (FFH.TO) said on Thursday that fourth-quarter profit rose as the insurance holding company continued to post gains on credit default swaps.

Fairfax, which owns stakes in property and casualty insurance companies in North America and Asia, said it earned $563.6 million, or $30.15 a share, in the three months ended Dec. 31. That was up from $159.1 million, or $8.45 a share, a year earlier.

Fairfax said its revenue was $2.4 billion, up from $1.6 billion in the same quarter a year earlier. The fourth quarter saw net gains of $705.2 million related to credit default swaps.

Fairfax, which owns a majority of Canada’s Northbridge Financial Corp (NB.TO) among other companies, raised its annual dividend by 82 percent in January.

Its stock is up 9 percent so far in 2008, after a 24 percent gain in 2007, largely on the back of its credit default swap portfolio. The credit default investments profit from a deteriorating U.S. subprime mortgage market.

The stock closed at C$313.01 on the Toronto Stock Exchange on Thursday, down 50 Canadian cents. Fairfax released its results after the market close.

$1=$1.01 Canadian Reporting Allan Dowd, Lynne Olver, Editing by Peter Galloway

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