Money working for people
Copyright © 1996-2008, Fédération des caisses Desjardins du Québec. All rights reserved.
Quebec City Centre des congrès, March 29, 2008
(Actual speech may differ from this text)
Mr. President,
Cooperators,
Good morning!
When I first began to prepare this morning's message, one word came to my mind—maturity. Why maturity?
Because the results obtained in 2007 are the culmination of sustained efforts that have evolved in pace with our members' needs. Because maturity is something we see in the vision of the officers who choose our orientations to fulfill our common objectives. Because maturity is also reflected in the desire of the various actors in Desjardins Group to work in sync with those orientations. And because maturity is the tangible evidence of the skill and professionalism exhibited by our teams out in the field who accompany the members in a continuing quest for excellence.
This maturity, acquired over the years, contributed to reaching and even to surpassing the objectives that enable us, every day, to develop as an integrated cooperative financial group. It is, therefore, with great pleasure that I will talk to you today about the results of the caisse network, your excellent results.
Yesterday, you heard Mr. D'Amours talk about the highlights of Desjardins Group. Desjardins recorded excellent results in 2007, the best in our history. The caisse network has greatly contributed to those results. You have every reason to be proud, as the builders of our success.
First of all, here are the results for the consumer market:
Network results for the consumer market are indeed very eloquent. The same can be said for the business market, which reached new heights in 2007.
Apart from these excellent business development results, on both the consumer and business markets, financial performance was also on the agenda. Here are a few of the excellent financial results from the caisse network as at December 31, 2007.
I will conclude my comments on financial results by recalling the exceptional surplus earnings achieved by Desjardins totalling $1.1 billion. Note that these surplus earnings before member dividends include the share of the subsidiaries. I also would like to highlight the provision for member dividends, which, at $592 million, is an increase of $109.0 million or 22.6%. The $72 million paid out as sponsorships, donations and scholarships is a good illustration of our desire to participate actively in the development of individuals and communities.
These results are even more impressive since they were achieved at a time when the markets were severely shaken by the liquidity crunch. The caisse network, the Fédération and the subsidiaries all put their shoulders to the wheel to improve the productivity ratio and thus ensure increased stability for Desjardins Group.
In the wake of steps taken in 2005, new synergies were created to enable us to continue to advance with respect to productivity. There was, for example, the joining of forces in the area of Human Resources, and the creation of two shared service centres that was carried out in two phases. The first phase was on the optimization of the management of financial resources and operational functions. The second included specialized savings back-office services, thereby promoting a sharing of knowledge and best practices. Added to that was the implementation under Desjardins Asset Management of Desjardins Property Management, responsible for managing the real estate assets whose ownership had been transferred to Desjardins Financial Security. Here I'm referring to Complexe Desjardins in Montréal and the buildings on the Lévis campus.
Still on the subject of productivity, the Fédération also stayed the course in managing its costs. The adoption of the 2008 budget confirms that the objective to improve productivity by 15% for the 2006 to 2008 period would be reached if not exceeded. To reach this objective, efforts were made by all sectors of the Fédération, including business units. Reaching this objective represents an annual recurring gain of $96.7 million. The business units increased their surplus earnings by $103.0 million with respect to the three-year financial plan.
To contribute to diversifying our sources of income and support the development of the Canadian cooperative model, we continued our offers of service to the credit unions in terms of technological solutions. The creation of the new Ontario Executive Division in 2007 made it possible to ensure continuity in the quality of services offered to the caisses in this province while supporting Desjardins Credit Union, thereby marking a new stage in our Canadian development.
Note that this quest for productivity was carried out with a deep respect for the rules involving integrated risk management. The application for certification from the Autorité des marchés financiers brings us closer each day to the 2009 deadline when the Basel II Accord will formally ratify mandatory practices to be observed by all financial institutions, including Desjardins.
In terms of efficiencies, the Fédération set up a tool that makes it possible to optimize the transmission of information to the network. Here, I am referring to Portail D, which was rolled out in November 2007. As an example, this new network succeeded in reducing the volume of pages dealing with savings and investment from 12,000 to 1,200 without losing any of the basic information, according to the main users. I'm convinced that rapid access to accurate and relevant information is a sure way of achieving various tasks more efficiently.
So much effort was put forth to achieve these remarkable results. To one and all I say bravo!
Beyond those results, there are people. Members are supported by teams throughout every financial stage of their personal life or that of their business. To do so, the Fédération proposes strategies and means to the caisse network to support business development among individuals and businesses. The key markets, support units and regions, which make up your centre of expertise, all make it a point of honour to guide the caisses and the business centres in elaborating and presenting the best offer of services to our members.
Let's now look at some of the Fédération's achievements in 2007.
First of all, let us look at the activities related to the consumer market. In light of results obtained, the objective to become the preferred financial institution to manage the financial wealth of our members is closer than ever to being within reach.
I said it at the outset. Maturity is the mark of our success in 2007. Apart from the expertise of the teams in place, Desjardins' offer, which is different from any other, is a sizeable asset that has significantly evolved over the years. We need to target these strengths to reach our ambitious objectives in terms of savings. It is in this perspective that we created, among other things, the Chorus and Diapason portfolios, which are entirely made up of Desjardins Funds.
Members also were able to benefit from this distinct advantage offered by our capital-protected structured products. Desjardins has the largest range of products in North America that enables us to offer, at all times, the largest choice of portfolio diversification, with a total guarantee of the capital invested by our members. With the recent turbulence on the stock markets, these products are an interesting alternative to traditional-type savings.
We should also target the net sympathy capital of members who are mixed with respect to Desjardins. Since 2001, this index jumped by 17 points, according to the most recent Desjardins image study. The opportunity is ripe to make an offer to these members who have a better appreciation than ever of our financial institution.
After the shift we made to increase our presence on the savings market, similar efforts were made for financing. We also chose to target our strengths in the mortgage financing area in order to consolidate our business relationship with our members.
Optimizing the available financing services will also enable us to reach our objectives. Here, I'm thinking of the use of the Desjardins credit and debit cards that members appreciate for their flexibility. Desjardins Card Services achieved earnings of $143.0 million as at December 31, 2007, which is an eloquent example of that. This amount of $143.0 million includes an after-tax gain of $64.0 million related to the worldwide restructuring of VISA. When you think that Accord D was created just ten years ago, you can easily understand how much territory has been covered.
Another major achievement is the implementation of Carrefour Desjardins, a real extension of the network in downtown Montréal. It actively supports business development downtown, reaching out to workers, residents and students there, as well as providing a gateway for cultural communities and new arrivals who are just discovering Desjardins. For its first year in operation, total sales of $75.9 million for and on behalf of the caisses shows how relevant it is.
Let's now see about the business side. The strategy deployed in downtown Montréal for the consumer market also was deployed for business with the creation of the Desjardins Mid-Market Business Centre in the same district. Less than one year after it opened, the Centre achieved financing contracts worth $54.0 million, showing just how appropriate it was to have established such a centre. In collaboration with Desjardins Venture Capital and Caisse centrale Desjardins, the Centre positions us as a major player on the medium-sized business field.
Apart from this promising initiative, the Fédération continues to create tools that help boost business development for the caisses and business centres. A more exact reading of the overall performance of their business clientele, pricing based on risk, developing the expertise of the account managers with an emphasis on sales culture, the proposal of new position profiles, the offer to accompany very small business as well as the software to process financing over $350,000 are among the tools available to you.
In addition, the business centres have a solution that enables them to take charge of all of the business members' finances, including opportunities in terms of personal savings for the entrepreneur. In addition to contributing to reaching our savings objectives, this solution promotes improved quality of services to our members.
Online services are also appreciated by the business clientele, which now benefits from the new AccèsD and AccèsD Affaires functions. Cheque imaging has now become a reality for business members, since the summer of 2007. These functions reach a dual objective: to facilitate electronic exchange of items while reducing the paper necessary for printing statements. This is an initiative that is completely in line with our sustainable development orientations.
Finally, the business forums and symposiums organized in collaboration with SECOR-Les Affaires or HEC Montréal have been excellent occasions for useful discussions among entrepreneurs.
Before closing this chapter on businesses, I would like to mention the work of the specialists who, day after day, accompany businesses. It is thanks to them that we have reached new heights. They are even more deserving of our consideration, since these results were achieved in a context of intense delivery of business solutions developed to respond to the needs of the members. I thank them on your behalf.
Member satisfaction results are now, and always have been, a telling barometer to verify the fit between member needs and our service offering. And the results for 2007 are very revealing.
For individuals, the overall average satisfaction index shows 60% of members saying they are "very satisfied", a 6-point increase. Note that Desjardins has a better score than the banks for each aspect of service.
The owners of small and medium-sized businesses also show their very great satisfaction with an overall average index of 64%, for an increase of 3 points. The very small businesses now are joining the average of members with an increase of 8 points in two years. Remember that this is one of the strategic priorities of the business sector. A survey carried out by the Canadian Federation of Independent Business has corroborated these very interesting results. Another significant fact arising from this recent survey is that overall, Desjardins' performance was higher than that achieved by all the major Canadian banks.
The member satisfaction increase with respect to accessibility constitutes, no doubt, another result of this survey that is worthy of mention. In 2006, the banks were ahead of Desjardins with a gap of 7 points. Desjardins has now surpassed them with a result that is 6 points higher to reach 60%, or a gain of 13 points in one year!
Thanks to an Action Plan that includes, among other things, a vast advertising campaign, Desjardins was able to prove that accessibility is not only about the physical limits of the caisses. As an example, 2 million users of AccèsD made no less than 672 million transactions in 2007, for a jump of 14% with respect to 2006. This shows, beyond any doubt, that our online services are very appreciated by our members.
I would like to take this opportunity to also mention the quest for excellence by AccèsD Services. They received the highest distinction attributed in Quebec: the Grand Prix québécois de la qualité. This prestigious honour demonstrates the excellent quality of the account access services available to our members.
Another result of the survey that I particularly like is the aspect that evaluates the services of the Fédération, your evaluation of our services. I am very proud to note that our offer of services is being received very positively among the caisses as well as the business centres. In both cases, a 5-point increase in the proportion of people saying they are very satisfied shows, with no doubt, that our efforts are taking us in the right direction.
The last measure, which is very significant in my eyes, is the cooperative difference. Note that this measure includes questions about the specific mission of Desjardins as a financial services cooperative. It's interesting to note that individuals and companies saw respective gains of 3 and 7 points. This is a very important and very significant result.
This brings me to talk to you about the work carried out in 2007, in terms of the cooperative difference that is more visible and in the forefront than ever. The actions taken in 2007 have given it new life.
Thus, the Councils of Representatives have been asked to carry out some wide-scale projects. The basic communities of interest will, from now on, be central to the analysis of any project to amalgamate caisses. This new framework for reflection will make it possible to retain our democratic vitality and our proximity to the members and their communities.
The Councils have also agreed on a framework that will enable a more accurate measure of their achievements and an emulation among caisses of the same category to facilitate their overall performance management. In addition, a governance policy will enable the elected officers to have better information about their business centre and to have an influence on their decisions.
As another tangible sign of our desire to respect our mission and our cooperative values, members who are not eligible for conventional financing had access to the Desjardins Mutual Assistance Fund, to Microcredit to Businesses and to the Créavenir program. In this way, Desjardins has proven that everyone, regardless of their situation, is treated with consideration. That is where the theme "Money Working for People" takes on all its meaning, because Desjardins knows the importance of human capital.
We also finally have the new framework to manage the relationship between the members and their caisse. Following changes to the Act respecting Financial Services Cooperatives, a member leaving a caisse territory or group can keep their political rights, while a member that has left Desjardins remains eligible for the member dividend in the year of their departure. The increase in the number of members required to call a special meeting also is among the changes that were made.
Human Resources are the cornerstone of any company. That is well known. At Desjardins we want to make a difference, and we can make this difference.
Our actions must be coherent with our business ambitions, and in line with having a body of employees, members and elected officers who are representative of a diverse society. That is quite a challenge. The Desjardins approach to diversity and the integrated strategy for diversity were presented and shared at the Presidents' and General Managers' Rendez-vous in November 2007 and will certainly help us to remain on course in that regard.
Young people, women, cultural communities, and people whose first language is not French were also given priority. Among the actions taken, we should cite the numerous initiatives that were part of the Youth Focus program, the support measures promoting access by women to higher positions, as well as meetings with people from Native and cultural communities.
Since they represent the future of Desjardins, we will continue to try to get young people interested in our organization. There are, among other things, the 14 youth representatives who were hired to ensure an increased presence in schools. There was also the Desjardins Student Loan Management Centre which, apart from its primary mission to grant loans, also offers relevant advice to young people, especially on the pitfalls of credit. Finally, in another age group, the School Caisse program initiates children to the importance of saving.
The workforce is an issue we must pay particular attention to. We need to do everything possible to attract and retain talent. We must also meet the stimulating challenge of managing that talent. The right person in the right place is the key that opens all the doors for increased efficiency in our organization.
At the beginning of my speech, I was talking about how we are, today, reaping what we have sown in the course of the last century. Just like a grape vine that takes time and energy to develop its full potential, Desjardins has been able to take every opportunity to evolve and adapt to a changing environment.
And what a great wine we have today! And what fertile soil we have! A full range of products and services adapted to the needs of our members who trust us, an accessible distribution network at the leading edge of technology and especially committed people who are devoted to bringing Desjardins to higher summits.
I would like to take the opportunity today to thank the people who, for me, are a source of inspiration on a daily basis:
To all of you, enjoy your meetings!
Money working for people
Copyright © 1996-2008, Fédération des caisses Desjardins du Québec. All rights reserved.