Great-West Lifeco Inc. today reported a 9% increase in net income for the fourth quarter ended Dec. 31, 2007.

The life insurer said net income for the quarter was $537 million, compared to net income of $491 million reported a year ago.

This represents 60.1¢ per common share for the quarter, compared to 55¢ a common share for the year ago period.

“The trend is pretty clear,” said Ray McFeetors, president and CEO of Great-West, during a conference call today. “We feel good about our institutional business. The money market business is doing well because we kept people out of trouble last year and we know we’ve got some good products in our retail area.”

Great-West said the strength of the Canadian dollar reduced net income reported by the company in the quarter by approximately 4.3¢ per common share, or $38 million. On a constant currency basis, net income attributable to common shareholders increased 17% over 2006.

For the 12 months ended Dec. 31, 2007 adjusted net income was $2,153 million compared to $1,875 million reported a year ago. This equals $2.413 per common share for the quarter, up 15% from 2006.

Adjusted net income excludes a $97 million after-tax provision for certain Canadian retirement plans that was recorded in the third quarter of 2007. Net income after this provision was $2,056 million. On a constant currency basis, adjusted net income increased 16% from 2006.

Great-West said results for the year were strong across all three of business segments, Canada, United States and Europe.

In terms of subprime markets, McFeetors said the company has $1.5 billion exposure to sub prime fixed-rate home equity loans, mainly in the U.S. He said they have no concentration and most of the assets are triple-A rated. “A number of institutions have taken serious write downs,” he said. “That is not the case at Great-West. We have a very pristine asset portfolio. It’s very strong in all our geographies.”

The acquisition of Putnam Investments closed in August last year and the new addition has contributed about $0.029 per common share to Q4 net income.

Canadian operations posted net income of $246 million for the fourth quarter, compared to $223 million in 2006, an increase of 10%.

At Great-West’s U.S. operations, net income for the quarter increased 10% to $141 million from $128 million for the fourth quarter of
2006.

In Euope, Great-West’s net income was $150 million was comparable to $150 million for the fourth quarter of 2006.

The company raised its quarterly dividend by 6.4% to 29.25¢ per common share.