IGM Financial Inc. reports second quarter earnings increases dividend

Winnipeg -- August 2, 2006: IGM Financial Inc. (IGM or the Company) (TSX:IGM) today announced earnings results for the second quarter of 2006.

Net income for the three months ended June 30, 2006, excluding a non-cash income tax benefit described below, was $186.7 million compared to net income of $167.9 million in 2005, an increase of 11.2%. Earnings per share on the same basis were 70 cents compared to earnings per share of 63 cents in 2005. A non-cash income tax benefit of $13.7 million (5 cents per share) resulted from decreases in the federal corporate income tax rates and their effect on the future income tax liability related to indefinite life intangible assets arising from the acquisition of Mackenzie Financial Corporation in 2001. There is no expectation that the future tax liability will become payable as the Company has no intention of disposing of these assets. Net income for the three months ended June 30, 2006, including the non-cash income tax benefit described above, totalled $200.4 million and earnings per share on the same basis were 75 cents.

Net income for the six months ended June 30, 2006, excluding the non-cash income tax benefit described above, was $372.0 million compared to net income of $328.6 million in 2005, an increase of 13.2%. Earnings per share on the same basis were $1.39 compared to earnings per share of $1.23 in 2005. Net income for the six months ended June 30, 2006, including the non-cash income tax benefit totalled $385.7 million and earnings per share on the same basis were $1.44.

Gross revenues for the three months ended June 30, 2006 were $636.6 million, compared to $579.2 million in the prior year. Gross revenues for the six months ended June 30, 2006 were $1.28 billion, compared to $1.15 billion in the prior year. Operating expenses were $369.7 million for the quarter and $743.5 million for the six months, compared to $336.1 million and $676.9 million, respectively, in 2005.

Mutual fund assets under management at June 30, 2006 totalled $96.2 billion, compared to $87.5 billion at June 30, 2005, an increase of 9.9%. Total assets under management at June 30, 2006 totalled $103.7 billion, compared to $92.5 billion at June 30, 2005, an increase of 12.1%.

Shareholders' equity at June 30, 2006 was $3.64 billion, compared to $3.45 billion at December 31, 2005. Return on average common equity for the six months ended June 30, 2006, excluding a noncash income tax benefit, was 20.4% compared with return on average common equity of 19.7% for the same period in 2005.

INVESTORS GROUP OPERATIONS

Mutual fund sales for the second quarter of 2006 were $1.5 billion compared to $1.3 billion in the prior year and mutual fund net sales were $165 million compared to $40 million a year ago. Net sales of long-term funds were $106 million compared to net redemptions of $17 million in the prior year.

Year-to-date mutual fund sales were $3.4 billion compared to $2.9 billion in the prior year and mutual fund net sales were $883 million compared to $468 million a year ago. Net sales of long-term funds were $727 million compared to $351 million in the prior year.

“An increase of 89% in net sales over last year's first six months arises from continued growth of our Consultant network, a broad investment fund array and an appreciation by our clients of our approach to long-term financial planning,” said Murray J. Taylor, President and Chief Executive Officer of Investors Group Inc.

Investors Group's twelve month trailing redemption rate (excluding money market funds) was 8.4% at June 30, 2006 , down from 9.1% at the same time last year. The corresponding average rate at June 30, 2006 for all other members of the Investment Funds Institute of Canada (IFIC) was approximately 16.0%.

Investors Group's mutual fund assets under management at June 30, 2006 were $51.8 billion, an increase of 10.5%, compared to $46.9 billion at June 30, 2005 .

The number of Investors Group Consultants was 3,766 at June 30, 2006 . Investors Group has experienced eight consecutive quarters of growth resulting in an increase of more than 17% in the Consultant network since June 30, 2004 .

MACKENZIE OPERATIONS

Mackenzie recorded mutual fund sales of $2.0 billion for the second quarter of 2006 compared to $1.9 billion in the prior year. Mutual fund net sales were $32 million compared to $207 million in the prior year. Net sales of long-term funds (excluding money market and managed yield funds) were $51 million for the period compared to $231 million in 2005.

Year-to-date mutual fund sales were $4.8 billion compared to $4.2 billion in the prior year. Mutual fund net sales were $644 million compared to $553 million in the prior year. Net sales of long-term funds (excluding money market and managed yield funds) were $642 million for the period compared to $599 million in 2005.

“The launch of the Mackenzie Charitable Giving Fund and the U.S. Dividend Income Fund continue to place Mackenzie in the forefront of innovative product development,” said Charles R. Sims, President and Chief Executive Officer of Mackenzie Financial Corporation.

Mackenzie's twelve month trailing redemption rate for long-term funds was 15.3% at the end of June 2006, compared to 14.7% at the end of June 2005. The corresponding average rate at June 30, 2006 for all other members of IFIC was approximately 15.3%.

Mackenzie's mutual fund assets under management at June 30, 2006 were $42.4 billion, an increase of 8.9%, compared to $38.9 billion one year ago. Total assets under management at June 30, 2006 totalled $52.2 billion compared to $45.9 billion at June 30, 2005 , an increase of 13.8%.

DIVIDENDS

The Board of Directors has declared a quarterly dividend of $0.359375 per share on the Company's 5.75% Non-Cumulative First Preferred Shares, Series “A” payable on September 30, 2006 to shareholders of record on August 30, 2006 and has declared an increase of 2.75 cents per share in the quarterly dividend from 37.0 cents to 39.75 cents per share on the Company's common shares payable on October 27, 2006 to shareholders of record on September 25, 2006.

FORWARD -LOOKING INFORMATION AND NON -GAAP FINANCIAL MEASURES

This Release may contain forward-looking statements about the Company, including its business operations, strategy and expected financial performance and condition. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates” or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future financial performance (including revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future Company action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company, economic factors and the financial services industry generally. They are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward-looking statements made by the Company due to, but not limited to, important factors such as general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, changes in tax laws, unexpected judicial or regulatory proceedings, catastrophic events, and the Company's ability to complete strategic transactions and integrate acquisitions. The reader is cautioned that the foregoing list of important factors is not exhaustive. The reader is also cautioned to consider these and other factors carefully and not place undue reliance on forward-looking statements.

This release may also contain non-GAAP financial measures. Terms by which non-GAAP financial measures are identified include but are not limited to “net income excluding a non-cash income tax benefit”, “earnings per share excluding a non-cash income tax benefit” and other similar expressions. Non-GAAP financial measures are used to provide management and investors with additional measures of performance. However, non-GAAP financial measures do not have standard meanings prescribed by GAAP and are not directly comparable to similar measures used by other companies. Please refer to the attached Financial Highlights for the appropriate reconciliations of these non-GAAP financial measures to measures prescribed by GAAP.

A review of activities and performance for IGM Financial Inc., together with financial details and a management discussion, will be published in the Company's 2006 Second Quarter Report to Shareholders which should be mailed to shareholders on or about August 11, 2006.

FINANCIAL STATEMENTS AND NOTES

Financial Statements and Notes [ PDF: 86 K / 2 pages ]

IGM Financial Inc. is one of Canada's premier personal financial services companies, and the country's largest manager and distributor of mutual funds and other managed asset products, with over $105 billion in total assets under management. Its activities are carried out principally through Investors Group, Mackenzie Financial and Investment Planning Counsel. IGM Financial Inc. is a member of the Power Financial Corporation group of companies.

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Media Note: A live webcast of IGM's Analyst conference call for the Second Quarter 2006 will be held Thursday, August 3, 2006 , at 9:30 A.M. (ET) at www.igmfinancial.com. Media and interested parties may alternatively choose to listen to the live analyst teleconference call by dialing 1-888-789-0089 or (416) 695-5261 .