Lévis, November 10, 2022 – For the third quarter ended September 30, 2022, Desjardins Group, North America’s leading financial cooperative group, recorded surplus earnings before member dividends of $478 million, down $338 million from the same quarter of 2021. This decrease in surplus earnings was mostly due to a rise in the cost of claims in the Property and Casualty Insurance segment, reflecting among other things the impact of inflation and the increased frequency in claims. The third quarter of 2022 was also marked by two major events: heavy rainfalls in Québec and Hurricane Fiona in the Atlantic provinces and Québec. In addition, surplus earnings fell due to the increase in the provision for credit losses, mainly as a result of the deteriorating macroeconomic outlook, accelerated investments, particularly in projects provided in the strategic orientations, and a rise in spending on personnel. This reduction in surplus earnings was partially offset by an increase in net interest income and other operating income1.
For the third quarter of 2022, the provision for member dividends was $106 million, up $16 million or 17.8% from the same period in 2021. Sponsorships, donations and scholarships come to $22 million, including $9 million from caisse Community Development Funds. This amounted to a total of $128 million returned to members and the community1, up $18 million or 16.4% from the same period in 2021.
“Member dividends and operating income1 remained on the rise in the third quarter, while Desjardins Group continued to demonstrate strong financial strength," said Desjardins Group President and CEO Guy Cormier. "Furthermore, we are actively supporting our members and clients to help them cope with the increased pressures of the current inflationary environment through efforts such as personalized assistance tailored to their individual needs. We also continue to support young people by creating the right conditions for them to be able to reach their full potential. A good example of our commitment is our regional tour to discuss today’s issues with young people in partnership with the Regroupement des jeunes chambres de commerce du Québec."
At the end of the first nine months of 2022, Desjardins Group recorded surplus earnings before member dividends of $1 474 million, down $1 075 million from the same period of 2021. This decrease in surplus earnings was mostly due to a rise in the cost of claims in the Property and Casualty Insurance segment, reflecting in particular the impact of inflation, and an increase in road traffic, which had fallen considerably in the comparative period as a result of the pandemic. In addition, the first nine months of 2022 were marked by one catastrophe, a rare weather phenomenon known as a derecho, in Québec and Ontario, and by four major events (windstorm, flooding, heavy rainfall and Hurricane Fiona), while the corresponding period in 2021 was affected by one catastrophe, namely a hailstorm in Alberta. Surplus earnings also fell as a result of accelerated investments, particularly in projects provided in the strategic orientations, and a rise in spending on personnel. This reduction in surplus earnings was partially offset by an increase in net interest income and other operating income1.
Supporting a green economic and social recovery
Desjardins is contributing to regional development and the economy through the GoodSpark Fund, which has set aside $250 million to stimulate social and economic activity in communities, and the Momentum Fund to support businesses.
Since the creation of the GoodSpark Fund, Desjardins has committed a total of $153 million to 700 projects. Meanwhile, the Momentum Fund has also supported 1,405 businesses for a total outlay of more than $9 million.
Desjardins is also working to help members and clients transition to a low-carbon economy. Desjardins was the first financial institution in Canada to exclusively offer individual savings responsible annuities. All new annuities will automatically go into investments that meet strict environmental, social and governance (ESG) criteria.
Connecting with young people
Desjardins Group and the Regroupement des jeunes chambres de commerce du Québec joined forces and leveraged their networks to create a unique youth forum (in French only). At a time when the current economic situation is profoundly influencing crucial issues such as employment, entrepreneurship, housing and education, this initiative seeks to create a space for productive discussions with young professionals and entrepreneurs from several regions of Québec.
Guy Cormier, President and CEO of Desjardins Group, is hosting six regional meetings with an average of 125 participants. The first meeting took place in September 2022, and the last meeting will be held in January 2023.
Giving back to the community
Desjardins has been more involved than ever in people's lives and continues to support initiatives on diversity, inclusion, cooperation, financial literacy and healthy lifestyle habits. Here are some ways that Desjardins has been making a positive difference in people's lives in the third quarter of 2022:
- Launch of a new group insurance product for people engaged in gender affirmation processes, in partnership with Fondation Émergence, an organization that advocates for the rights of LGBTQ+ people.
- First cross-Canada economic web conference for the general public with Desjardins Chief Economist on economic and financial forecasts to help Canadian investors make more informed decisions.
- Tailored support for our members and clients affected by Hurricane Fiona. Desjardins has also teamed up with the Canadian Red Cross, making a $75,000 donation to its Relief Fund.
- Launch of the Project Factory: an innovative fundraising platform for school and extracurricular projects in Québec and Ontario elementary and secondary schools. It’s an educational initiative by Desjardins, in partnership with La Ruche and La grande journée des petits entrepreneurs.
Desjardins is constantly innovating to meet the needs of its members and clients. Here are just a few examples of innovations for which Desjardins was recognized in the third quarter of 2022.
- For the third year in a row, Desjardins was named Best House, Canada, the highest distinction awarded by UK-based firm Structured Retail Products (SRP), for its range of structured products. In choosing the winner, SRP recognizes sales volumes, yields paid and client satisfaction.
- The range of Desjardins Alternative Exchange Traded Funds (ETFs) is growing to meet the needs of our members and clients with the addition of a new Desjardins Alt Long/Short Global Equity Markets ETF and a new US$ Desjardins Alt Long/Short Equity Market Neutral ETF.
- Partnership with the investors of the Société de financement et d'accompagnement en performance énergétique (SOFIAC) to support energy transition and building decarbonization projects across Canada.
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