Manulife Financial Corp. today reported record earnings for the fourth quarter ended Dec. 31, 2007.

Net income at the Toronto-based life insurer climbed 4% in the fourth quarter on higher fee income and strong investment performance.

Manulife said net income was $1.14 billion ($1.14 billion), or 75¢ a share, in the three months ended Dec. 31. That compares with earnings of $1.1 billion, or 70¢ a share, a year earlier.

Manulife, which has operations in Canada, the United States, Japan and other Asian countries, said the strength of the Canadian currency reduced its earnings by $163 million in the quarter. Excluding the effects of foreign exchange, profit was 19% higher than a year earlier, it said.

Almost all of its businesses hit record sales levels for the quarter and the full year, Dominic D’Alessandro, Manulife’s president and chief executive, said in a statement.

“This positive sales momentum together with our exceptional asset quality and strong capital position will allow us to deal with the unsettled markets that are likely to continue to prevail for some months yet,” D’Alessandro, said.

Fourth-quarter U.S. life and variable annuity sales at its John Hancock unit, as well as Canadian individual life and wealth-management sales, were particularly strong, the company said.

Annualized return on equity, a measure of profitability, was 20.5% in the fourth quarter, up from 18.0% in the same period a year earlier.

Premiums and deposits rose 10% to $17.4 billion.