Speech by Gérard Guilbault, President and Chief Operating Officer Desjardins

Palais des congrès de Montréal, March 31, 2007

Mr. President of Desjardins Group,
Mr. Chairman of the Board,
Dear partners,
Ladies and gentlemen,

It is with a sense of satisfaction that I address you this afternoon, since we enjoyed another good year in 2006. Faithful to our mission and our commitments, we have been able to create value for our Desjardins partners.

More often than not, given the nature of our activities, we tend to work in the background.

Today, I would like to shine the spotlight on some of our results and some of our accomplishments to show you that even though we may not be very visible in your everyday life, we nonetheless make a definite contribution to Desjardins Group's success.

I am especially pleased with the more than 30% growth in our assets under management compared to 2005, because it is a sure sign of the confidence our partners and Desjardins Group have in us.

From 26.3 billion dollars in 2004, assets under management rose to 35.7 billion in 2005 and totalled 46.7 billion dollars as at December 31, 2006.

This increase is due, among other things, to the good performance of the markets, internal asset growth and Desjardins Asset Management's appointment as securities advisor for the Desjardins Funds.

Net income was 17.4 million dollars in 2006, compared to 21.1 million in 2005.

I can see the questioning looks on your faces. But you can relax. In fact, our net income would have been 28.5 million if we had not set up a commissioning arrangement with the Fédération under which we paid out 15 million dollars in the form of allocations to Quebec and Ontario caisses. The purpose of this allocation is to provide concrete support for your commitment to the Desjardins Alternative Term Savings and Perspectives Plus Term Savings products.

This uniquely cooperative formula for sharing our profits is the result of a strategic orientation we adopted at the end of 2005. Together with the Fédération, we both agreed to pay the caisses part of our surplus earnings on a recurring basis. In 2006, Desjardins Asset Management's anticipated share represented 32,000 dollars per 10 million dollars of DATS and PPTS products outstanding.

Now, let's focus in on results and accomplishments in our three main investment areas: mortgage investments, real estate investments and securities investments.

Let's start with mortgage investments, which once again reached a record volume of 587 million dollars in new business in 2006, in spite of continuing fierce competition on the market.

With 70% of this new business recruited outside Quebec, this sector again contributed to Desjardins Group's Canada-wide development efforts.

Furthermore, the mortgage investments team continued to strengthen its relationship with the network of Desjardins Business Centres, which paid off for both parties in the form of almost 600 million dollars' worth of referrals, and close to 125 million dollars of new business.

In addition, this collaboration with the Business Centres, and more recently, with Caisse centrale, enabled us to contribute to Desjardins Group's strategic orientation of increasing our market shares in Greater Montreal in the French-speaking, English-speaking and allophone communities.

Now let us turn to our real estate investment activities. The year ended on a positive note in this area as well, with the completion of phase one of Desjardins Group's real estate synergies project.

As you know, Complexe Desjardins was sold to Desjardins Financial Security in a transaction finalized at the beginning of 2007. The work is continuing smoothly and on schedule with the properties of the Lévis campus and the former regional federations.

This win-win partnership between the different components involved will generate positive spinoffs for Desjardins Group as a whole.

We are very pleased with leading role we were assigned in realizing the real estate synergies since it demonstrates the Group's confidence in our expertise, an expertise which helped us to earn a real estate portfolio yield of 18.4% for the benefit of DFS, up from last year's yield of 15.1%.

With respect to securities investments and financial engineering, the year was marked by the launch of six new institutional multi-management funds, bringing the total number of funds launched since May 2005 to 13.

I'd like to point out that multi-management is a special tool that allows us to structure portfolios and then select some of the world's best managers to handle them, while enabling us to strictly monitor their management.

The securities investments and financial engineering team also reviewed the Desjardins Alternative Term Savings product distributed by the caisse network, and the Strategic Index Plus product sold by Desjardins Financial Security in order to enhance their potential yields while maintaining their level of risk. A similar exercise is underway for the Perspectives Plus Term Savings and Tactical Index Plus products.

As stipulated in our Strategic Plan, in 2007, we will be emphasizing new product development.

A number of projects are underway and the object is to respond efficiently to the broader spectrum of members' and clients' needs.

Other activities in this investment sector also experienced their share of success in 2006, with very good results in bond management, a record business volume in securities lending, and a fund of hedge funds portfolio that now totals more than 5 billion dollars.

This brings our overview of the year's results to a close. Although we were able to take advantage of favourable markets, the cornerstone of our good performance in 2006 remains the expertise of our employees.

Our good performance was the work of people and their efforts to achieve objectives.

They include, among others:

• Pascale Nadeau, of the Securities Investments and Financial Engineering team.
• Derek Fish, of the Real Estate Investments team in Toronto.
• Ahmed Hassen, of the Market Risk Management team.
• Carole Rouleau, of the Finance team.
• Don Straughan, of the Mortgage Investments team in Vancouver.

In fact, we have more than 170 motivated employees who are committed, day in and day out, to satisfying our partners and clients.

I want to sincerely thank each and every one of them for the quality of their work in 2006.

But reaching our objectives takes more than motivated and committed employees: it also takes highly-skilled employees.

At Desjardins Asset Management, we value skill and we place great importance on education. That's why we encourage the acquisition of knowledge, both by making donations to educational institutions and by offering internships and work/study programs.

For instance, in order to maintain our Canadian leadership in funds of hedge funds, we made a 250,000 dollar donation to HEC Montréal to set up a five-year research partnership.

This partnership, which will enable our management teams to increase their expertise by drawing on unique leading-edge research in an expanding sector, is sure to make an important contribution to the development of new investment products.

But in 2007, we want to go one step further. Beyond our commitment to the universities, we also want to be active at the other end of the education continuum, with primary schools in places where the need is greatest.

Starting small, using all the means at our disposal and thanks to the support of several business partners, we have developed an agreement with the YMCA of Greater Montreal Foundation to provide financial sponsorship for two primary schools located in a couple of Montreal's most underprivileged neighbourhoods.

Above and beyond offering material resources, our five-year commitment is to support the pupils at these schools and provide them with long-term support in their academic careers.

We want to make this new, more micro business model as flexible as possible in order to mould it to the specific needs of the schools. We hope that this type of support, on a more human scale, will someday have offspring of its own that will be adopted by other organizations.

Is this a utopian vision? A drop of water in the ocean? Maybe. But I am confident that this initiative will be a catalyst for developing a new model of social commitment.

In closing, I wish to thank Mr. Alban D'Amours, the President and Chief Executive Officer of Desjardins Group, as well as each of our partners and clients for their confidence and support.

I also express my thanks to Mr. André Gagné, Chairman of the Board, and all the directors of Desjardins Asset Management for their assistance in carrying out our mission, in the service of Desjardins.

Thank you for your attention.