UPDATE 2-Power Financial profit rises despite C$ strength

(Adds board changes, updates stock price)

TORONTO, May 8 (Reuters) - Power Financial Corp (PWF.TO: Quote, Profile, Research) said on Thursday first-quarter earnings rose more than 20 percent, even as the strong Canadian dollar ate into results.

The financial services company, which owns Canada's second biggest life insurer and its largest independent mutual fund company, reported net income of C$586 million ($580.2 million), or 80 Canadian cents a diluted share, for the three months ended March 31.

That compared with C$482 million, or 65 Canadian cents a share, in the same 2007 period.

The company also said that Executive Chairman Robert Gratton has retired as chairman, but would remain a director.

Andre Desmarais and Paul Desmarais Jr. have been appointed co-chairmen of the board.

Power Financial said its operating earnings rose 1.8 percent on a per-share basis to 67 Canadian cents, hurt by the rise in the value of the Canadian dollar against the major operating currencies of insurance unit Great-West Lifeco (GWO.TO: Quote, Profile, Research).

"Based upon Lifeco's growth in earnings on a constant currency basis, Power Financial's operating earnings on a per share basis for the quarter would have increased by 9.0 percent," the company said.

Analysts had expected Power Financial, which owns majority stakes in insurer Great-West and mutual fund firm IGM Financial (IGM.TO: Quote, Profile, Research), to earn 69 Canadian cents a share in the quarter.