Results for the third quarter of 2024
Desjardins Foundation Prizes: Help create positive experiences that help get kids excited about school.
Desjardins Group posts strong performancefor the third quarter of 2024
LÉVIS, QC, Nov. 8, 2024 /CNW/ - For the third quarter ended September 30, 2024, Desjardins Group, North America's largest financial cooperative group, recorded surplus earnings before member dividends of $757 million, up $143 million from the same quarter of 2023. This increase was mainly driven by improved net interest income in the Personal and Business Services segment, mainly as a result of business growth. The increase in surplus earnings was partially offset by the results of the Property and Casualty Insurance segment, which were affected by higher claims expenses due to two catastrophes: namely torrential rains in Québec and hail in Alberta, as well as a major event in Ontario. We should also note that the increase in non-interest expense was limited by measures deployed across the organization to improve efficiency and effectiveness.
For the third quarter of 2024, the provision for member dividends totalled $110 million, up $4 million from the corresponding period of 2023. Sponsorships, donations and scholarships amounted to $24 million, of which $15 million came from the caisses' Community Development Fund.
"At the end of the first nine months of 2024, Desjardins Group recorded surplus earnings of $2.5 billion and our assets now stand at $464.7 billion," said Guy Cormier, President and Chief Executive Officer of Desjardins Group. "So we continue to grow on the strength of all our business segments. I'm very proud of the effort invested by our teams to get here. These results, in combination with our financial strength, make it possible for us to provide high-quality services to our members and clients at every stage of their lives."
At the end of the first nine months of 2024, Desjardins Group recorded surplus earnings before member dividends of $2,530 million, up $1,021 million from the same period of 2023. All business segments contributed to these excellent results. One example of this was improved earnings in the Personal and Business Services segment due to higher net interest income, mainly as a result of business growth. In addition, there was an increase in insurance revenue, mainly in automobile and property insurance, and changes in prior-year claims were more favorable than those recorded in the comparative period of 2023 for the Property and Casualty Insurance segment. The net insurance finance result for both life and health insurance and property and casualty insurance also went up. Furthermore, we should note that the increase in non-interest expense was limited by rigorous expenditure management.
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. Since 2017, Desjardins Group has committed a total of $204 million to 897 projects related to the GoodSpark Fund.
In particular, Desjardins is still working to implement the climate goal announced in 2021. The goal is to achieve, by 2040, net zero emissions in its operations, its supply chain, and its lending activities and investments in three key carbon-intensive sectors: energy, transportation and real estate.
Doing what's best for members and clients
Desjardins is involved in people's lives, whether by supporting community initiatives related to diversity, inclusion, cooperation, financial literacy and healthy living, or by offering innovative financial solutions to meet their needs. Here are some ways that Desjardins made a positive difference in people's lives in the second quarter of 2024.
Giving back to the community
The GoodSpark Fund (in French only) made a contribution toward the construction of a sports complex for the Collège de Lévis. The purpose of this financial support is to help enhance the quality of life of young people and citizens by encouraging them to adopt healthy lifestyles.
The Desjardins Foundation Prizes have enabled more than 3,000 people who work in a school or community organization to carry out initiatives that make kids want to go to school. To date, 500,000 young people have benefited from these initiatives.
The President and CEO of Desjardins Group, Guy Cormier, continued the series of visits he began last fall to Canadian chambers of commerce. He visited Toronto and Drummondville (in French only) in October to discuss leadership and productivity with entrepreneurs.
Innovating
Launch of the DGAM Canadian Private Real Estate Fund, intended for Canadian institutional investors. This fund provides institutional investors access to Canadian commercial real estate through high-quality buildings and has more than $300 million in assets in various sectors: multi-residential, industrial and shopping centres.
Presentation of an economic Web conference (in French only) on September 24, featuring Jimmy Jean, Vice-President and Chief Economist of Desjardins Group, and Emna Braham, Executive Director of the Institut du Québec, to demystify the economy and understand the impact of the U.S. elections on the Canadian economy.
Desjardins has won awards from two different organizations for its Capital Protected Products:
"Best House, Capital Protection manufacturer award" in the Americas for a second consecutive year, according to Structured Retail Products organization.
"Best Principal Protected Issuer award for Canada" at the SPi Canada 2024 Awards for Excellence. This honours the best Canadian issuer of principal-protected structured products in terms of innovation, sales achieved, range of products offered and product performance.
Financial highlights
Comparison of third quarter 2024 with third quarter 2023:
Surplus earnings before member dividends of $757 million, up $143 million.
Total net revenue of $3,385 million, up $252 million or 8.0%:
Net interest income of $1,915 million, up $199 million or 11.6%, due to growth in average business loans and residential mortgages outstanding.
Insurance service result of $270 million, down $121 million, mainly due to an increase in catastrophe and major event claims expenses compared to the corresponding quarter of 2023.
Net insurance finance result of $154 million, up $103 million, due in particular to favourable trends in financial markets.
Other income of $1,046 million, up $71 million.
Provision for credit losses of $105 million, down $22 million from the corresponding period of 2023.
Gross non-interest expense of $2,524 million, up $81 million compared to the third quarter of 2023. This increase was limited by measures taken to improve efficiency and effectiveness, including reduced spending on personnel.
$134 million returned to members and the community,(1) including a provision for member dividends of $110 million and sponsorships, donations and scholarships of $24 million, up $3 million or 2.3%, compared to the corresponding period of 2023.
Other highlights:
Tier 1A capital ratio(2) of 21.9%, compared to 20.4% as at December 31, 2023.
Total capital ratio(2) of 24.0%, compared to 21.9% as at December 31, 2023.
Total assets grew 9.9% since December 31, 2023, to $464.7 billion as at September 30, 2024.
Multi-currency medium-term note program subject to the bail-in regime:
Issuance of €500 million on September 5, 2024, in compliance with the Desjardins Sustainable Bond Framework;
Issuance of 230 million Swiss francs on September 11, 2024.
Canadian medium-term note program subject to the bail-in regime:
Issuance of CAD$1,250 million on September 24, 2024.
Comparison of first nine months of 2024 with first nine months of 2023:
Surplus earnings before member dividends of $2,530 million, up $1,021 million.
Total net revenue of $10,702 million, up $1,663 million or 18.4%:
Net interest income of $5,509 million, up $586 million or 11.9%, due to growth in the average outstanding loan portfolio.
Insurance service result of $1,299 million, up $511 million, mainly due to the increase in automobile and property insurance income in the Property and Casualty Insurance segment.
Net insurance finance result of $701 million, up $350 million, due to favourable trends in financial markets.
Other income of $3,193 million, up $216 million, or 7.3%, due in particular to the $78 million increase in revenues related to the activities acquired from Worldsource(1) and higher income stemming from growth in assets under management and assets under administration.
Provision for credit losses of $325 million, up $27 million compared to the corresponding period of 2023.
Gross non-interest expense of $7,777 million, up $309 million, compared to the first nine months of 2023, of which $77 million was due to expenses related to the activities acquired from Worldsource.(1) Despite wage indexation, the measures taken to improve efficiency and effectiveness made it possible to limit the increase in other items included under this heading to $232 million, or 3.2%.
$414 million returned to members and the community,(2) up $5 million compared to the first nine months of 2023.
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(11)
For additional information on supplementary financial measures, see "Non-GAAP Financial Measures and Other Financial Measures" on page 5.
(2)2
In accordance with the Capital Adequacy Guideline for financial services cooperatives issued by the Autorité des marchés financiers (AMF).
(1)4
On March 1, 2023, through Worldsource Group of Companies Inc. (formerly 9479-5176 Québec Inc.), a wholly-owned indirect subsidiary of the Federation, Desjardins Group acquired, among others, all the outstanding shares of IDC Worldsource Insurance Network Inc., Worldsource Financial Management Inc. and Worldsource Securities Inc. (collectively designated as "Worldsource").
(2)
For additional information on supplementary financial measures, see "Non-GAAP Financial Measures and Other Financial Measures" on page 5.
Non-GAAP financial measures and other financial measures
To measure its performance, Desjardins Group uses different GAAP (International Financial Reporting Standards (IFRS)) financial measures and various other financial measures, some of which are non-GAAP financial measures. Regulation 52-112 respecting Non-GAAP and Other Financial Measures Disclosure (Regulation 52-112) provides guidance to issuers disclosing specified financial measures, including the following measures used by Desjardins Group:
A non-GAAP financial measure;
Supplementary financial measures.
Non-GAAP financial measure
The non-GAAP financial measure, used by Desjardins Group in this press release and which does not have a standardized definition, is not directly comparable to similar measures used by other companies, and may not be directly comparable to any GAAP measure. It is defined as follows:
Return to members and the community
As a cooperative financial group contributing to the development of communities, Desjardins Group gives its members and clients the support they need to be financially empowered. The amounts returned to members and the community, a non-GAAP financial measure, are used to present the overall amount returned to the community and are composed of member dividends, as well as sponsorships, donations and scholarships.
More detailed information about the amounts returned to members and the community may be found in the "Financial Highlights" table on the following page.
Supplementary financial measures
In accordance with Regulation 52-112, supplementary financial measures are used to show historical or expected future financial performance, financial position or cash flows. In addition, these measures are not disclosed in the financial statements. Desjardins Group uses certain supplementary financial measures, and their composition is presented ...