Desjardins Financial Security starts 2008 off with a solid financial performance

2008 First Quarter Results

Insurance premiums up 11.7%
Group and business insurance premiums up 15.9%
Individual savings sales up 10.6%
Net income of $36.3 million
Return on shareholder equity of 21.5%

Lévis (Québec), May 27, 2008 – Desjardins Financial Security, a subsidiary of Desjardins Group specializing in life insurance, health insurance and retirement savings, announced net income of $36.3 million for the quarter ending March 31, 2008. Income from insurance premiums continued to grow and stood at $618.1 million for an 11.7% increase over the same period in 2007, when the Company reported net income of $553.4 million. Insurance sales totalled $51.1 million.

In the first quarter of 2008, the share of Desjardins Financial Security's net income attributable to the Company's ultimate shareholders, the Desjardins caisses, totalled $35.0 million. Shareholder equity was 21.5%, which remains one of the best results in the financial services industry. Assets under management and administration stood at $22.5 billion.

Like many other financial institutions across Canada, Desjardins Financial Security's results were affected by the turbulence and uncertainty on the financial markets. Investments in asset-backed commercial paper (ABCP) were written down to reflect the situation evolving on the markets. The resulting deterioration in net income for the first quarter of 2008 totalled $13.6 million. Excluding the impact of this deterioration, net income in the first quarter of 2008 would have been identical to the Company's results for the first three months of 2007.

Ms. Monique F. Leroux, Chair of the Board, President and CEO, Desjardins Group and CEO of Desjardins Financial Security, spoke highly of the contribution the Company makes to Desjardins Group. "With its consistent performance in Quebec and its impressive inroads in the other Canadian provinces right through the first quarter of 2008, Desjardins Financial Security stands as one of the pillars of the Canadian industry and contributes in a very tangible way to the reputation of Desjardins Group."

Mr. Richard Fortier, President and COO of Desjardins Financial Security, said that these positive results are directly related to Desjardins Group's strategic development activities. "Currently, we have several corporate projects aimed at accelerating Desjardins Financial Security's growth in the Canadian market. These projects will help us reach our development objectives in 2008, contributing in a significant way to the mid-term growth and profitability of the Desjardins Group."

Sector results

In group insurance, the volume of group and business insurance premiums stood at $392.8 million for the first three months of 2008, an improvement of $53.9 million over last year's results. Group and business insurance sales totalled $41.3 million.

In individual insurance, sales through the financial centre network of SFL Partner of Desjardins Financial Security, Desjardins Financial Security Independent Network and the Company's caisse-dedicated financial security advisors amounted to $9.8 million, up $0.5 million over the March 31, 2007 results, for a 5.4% improvement. Gross premiums were $120.2 million, an increase of $3.8 million over the same period last year.

In savings, overall sales totalled $312.1 million. Sales of individual savings products amounted to $93.7 million, for a $9 million increase over the first three months of 2007, while group retirement savings sales stood at $55.4 million.

About Desjardins Financial Security

Desjardins Financial Security, a subsidiary of Desjardins Group, the largest integrated cooperative financial group in Canada, specializes in providing life insurance, health insurance and retirement savings products and services to individuals and groups. Every day, over 5 million Canadians rely on Desjardins Financial Security to ensure their financial security. Desjardins Financial Security employs over 3,900 people and administers over $22.0 billion in assets from offices in several cities across the country including Vancouver, Calgary, Winnipeg, Toronto, Ottawa, Montréal, Québec, Lévis, Halifax and St. John's.

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Source:
Sarah Twomey
Communications Advisor
Tel.: 416-926-2700, extension 2015
Toll free: 1-877-906-5551, extension 2015