Great-West Lifeco profit rises on Irish unit

TORONTO Thu May 8, 2014 12:53pm EDT

TORONTO May 8 (Reuters) - Great-West Lifeco, Canada's second-largest life insurer, said on Thursday its first-quarter profit rose 13.5 percent, helped by the acquisition of Irish Life last year, but squeezed by the company's U.S. Putnam Investments unit.

Winnipeg, Manitoba-based Great-West, which is 71-percent owned by Canadian holding company Power Financial Corp, earned a net C$587 million ($540.24 million) in the quarter, or 59 Canadian cents a share, up from a year-ago profit of C$517 million, or 54 Canadian cents a share.

Analysts had expected a profit of 60 Canadian cents a share, according to Thomson Reuters I/B/E/S.

Great-West owns insurance subsidiaries including London Life and Canada Life, as well as Putnam Investments. Last year, the company acquired Irish Life, Ireland's largest life and pensions company.

Premiums and deposits rose 41 percent to C$23.9 billion, with C$2.9 billion of that coming from Irish Life. In total, Irish Life contributed C$52 million to the company's bottom line, Great-West said.

However, the results were pinched by the Putnam unit, which posted a net loss of C$53 million in the quarter, compared with a loss of C$14 million a year ago, and despite assets under management that rose 14 percent to US$153.4 billion.

The Putnam result "will likely be a lightning rod for negative sentiment," Barclays Capital analyst John Aiken said in a note, calling the lack of improving profitability despite rising assets "inexplicable".

The company's shares were down 2 Canadian cents at C$30.46. ($1 = 1.0866 Canadian Dollars) (Reporting by Cameron French; Editing by Marguerita Choy)