Industrial Alliance reports record net income

The fourth quarter results in 2005 for Industrial Alliance Insurance and Financial Services Inc.’s shareholder net income increased slightly to $46.7 million from $34.3 million for the same period in 2004.However, when excluding the Company’s restructuring charges related to the integration of its National Life subsidiary, Q4 shareholder net income in 2005 would be $48.2 million, compared with $40.4 million in the fourth quarter of 2004 a 19% increase. This adjusted net income translates into diluted earnings per share of $0.60, which is $0.10 higher than the Q4 of 2004. It also represents a 14.1% return on equity for the quarter annualized, which hit middle ground in the Company’s 13% to 15% target range (13.4% in the fourth quarter of 2004).Industrial Alliance reports that regarding business growth, the year ended with $872.5 million in premiums and deposits in the Q4, which represents solid growth of 19% compared to the same period in 2004. The growth is primarily a result of the individual wealth management sector, which Industrial Alliance says stems from sustained mutual and segregated fund sales.Strategically, the highlight for the quarter was the acquisition of Clarington Corporation, a mutual fund company that is now fully-owned by Industrial Alliance. Industrial Alliance says that this acquisition makes them a scale player in the investment fund market. “The fourth quarter was profitable on all fronts,” Yvon Charest, president and CEO, says. “From a financial standpoint, we reached our return target; in terms of business growth, we continued our momentum in all lines of business, both inside and outside Quebec.”Charest reiterates a few of the Company’s main objectives targeted for 2006:* Issuance of preferred shares the Company plans to issue $125 million in preferred shares. The proceeds will be used for general corporate purposes. * Buy-back of common shares the Company intends, through its normal course issuer bid, to buy back some 1.8 million Industrial Alliance common shares, equivalent to the number of shares issued when Clarington was acquired.* Reimbursement of the Clarington subordinated debenture the Company also intends to reimburse the $62.9 million Clarington subordinated debenture, assumed when Clarington was acquired.* Rate of Return the Company is maintaining its objective to obtain a return between 13% and 15%.* Earnings per Share the Company’s return objective translates into growth of earnings per share of some 10% for 2006.* Business Growth the Company is reiterating its objective to grow sales by five percentage points higher than the industry average.* Dividend the Company is targeting a dividend payout ratio of 25%, which is in the middle of its target range of 20% to 30% of sustainable earnings. * Solvency Ratio the Company continues to target a solvency ratio in the 175% to 200% range.* Tax Rate the expected tax rate for 2006 should be about 32.5%, taking into account the 3% increase in the corporate tax rate adopted by the Quebec government at the end of 2005.