AN ACTIVE AND INVOLVED GROUP. In October 2020 Desjardins paid member dividends after holding 212 online special general meetings of the caisses, which allowed members to vote on dividend payments while limiting the spread of the virus.
Desjardins posts solid financial results for the third quarter
Lévis, November 13, 2020 - For the third quarter ended September 30, 2020, Desjardins Group, Canada's leading financial cooperative group, recorded surplus earnings before member dividends of $729 million, up $159 million or 27.9% from the corresponding quarter of 2019. These results were driven by good performance from the caisse network, Desjardins Securities Inc. as well as the Property and Casualty Insurance segment. The growth in surplus earnings was also due to a decline in the provision for credit losses caused by the migration of exposures to higher risk ratings in the third quarter of 2019. This increase was offset by a decrease in business volumes from payment and financing activities at Desjardins Card Services in light of the COVID-19 pandemic.
Despite the pandemic, Desjardins Group continues to be a very strong financial institution that can support its members and clients.
The amount returned to members and the community in the third quarter of 2020 totalled $104 million, including an $80 million provision for member dividends, $14 million in sponsorships, donations and scholarships, and $10 million in Desjardins Member Advantages, which is comparable to the corresponding period of 2019. In the third quarter of 2020, Desjardins also announced $7 million in commitments related to the GoodSpark Fund to stimulate social and economic activity throughout Québec and Ontario.
At the end of the first nine months ended September 30, 2020, Desjardins Group recorded surplus earnings before member dividends of $1,543 million, down $120 million or 7.2% from the same period in 2019. The results were affected by the financial consequences of the COVID-19 pandemic. This included a $442 million increase in the provision for credit losses, mainly in response to the significant deterioration in the economic outlook and the increase in costs related to travel insurance of $49 million. Good performance from the caisse network, Desjardins Securities Inc., as well as the Property and Casualty Insurance segment partly offset the decrease in surplus earnings. The $155 million in auto insurance premiums refunded to more than 2.1 million policyholders as a relief measure were offset by lower auto insurance claims due to changes in driving habits during the COVID-19 pandemic.
"Desjardins posts solid financial results for the third-quarter, in particular due to higher surplus earnings and exceptional financial stability, despite the financial impacts of the COVID-19 pandemic," said Desjardins President and CEO, Guy Cormier. "Desjardins continues to meet the needs of its members and clients in this time of crisis by offering relief measures and by taking numerous initiatives to restart the economy. In addition, Desjardins is the most generous company in Québec, according to a recent survey on philanthropy conducted by the consulting firm Épisode."
COVID-19: Desjardins Group supports its members and clients
On March 16, Desjardins became one of the first financial institutions to implement relief measures to help support members and clients who might temporarily have trouble meeting their financial obligations in this time of pandemic-induced crisis.
Since March Desjardins has introduced a number of relief and protection measures. In addition to the
$155 million in insurance premiums refunded to more than 2.1 million policyholders as a relief measure, Desjardins has been offering payment relief on financing products, raising the contactless payment limit from $100 to $250, temporarily reducing the annual interest rate to 10.9% for credit card holders who were granted a payment deferral on a Desjardins financing product and offering personal members and clients a loan of last resort of up to $3,000 at a special interest rate of 4.97%. Desjardins Group also introduced new measures for youth, seniors and community organizations and encouraged members and clients to sign up to receive their government benefits by direct deposit instead of cheque.
As at September 30, 2020, Desjardins Group had received 141,800 requests for payment deferrals on credit card loans and other personal loans. It had also received a total of 151,600 applications for residential mortgage loans and consumer loans, including close to 134,000 relating to mortgage loans. As for business loans, a total of 26,600 loan applications had been received.
Support for economic and social recovery
At the end of April, Desjardins announced its initial strategies to help get the economy back on track and support regional development. This consisted of five initiatives to promote innovation and entrepreneurship to help businesses and community organizations get back to work.
- The $150 million GoodSpark Fund.
- The $10 million Momentum Fund for businesses.
- A partnership with La Ruche Québec to encourage consumers to buy local.
- A partnership with École d'Entrepreneurship de Beauce and SPB/Skillable to launch a learning path aimed at helping businesses bounce back.
- The < post > COVID Challenge.
In September 2020, Desjardins announced that it would extend its main relief measures and concrete commitments to support business members and young people.
- The hardest-hit companies whose short-term survival is at risk can obtain a two-year rate lock on loans at the lowest rates.
- Business members and clients can also take advantage of substantial savings on virtual healthcare services, offered in partnership with Medisys and Optima Global Health.
- Desjardins has also partnered with École de technologie supérieure (ÉTS) to accelerate the transition to a circular economy. The collaboration will give businesses more opportunities to innovate and increase their productivity by optimizing resource use, all while cutting greenhouse gas emissions.
- To encourage students to stay in school during the pandemic, Desjardins Foundation will hand out this fall more than 1,100 scholarships totaling $1.8 million to students in trade, college or university programs.
- Desjardins has also partnered with the Fédération des chambres de commerce du Québec (FCCQ) to launch the En Mouvement pour la relance socioéconomique In the fall, online meetings will bring together close to 130 chambers of commerce from across Québec to engage local stakeholders in discussions on regional realities in a context of economic recovery.
Giving back to the community
During this pandemic, Desjardins has been more involved than ever in people's lives and continues to support initiatives in line with its values, such as diversity and inclusion.
- Desjardins became co-presenter of the Montreal International Black Film Festival, an event that plays a crucial role in ensuring Black talent is included on and off screen, both in Québec and the rest of Canada.
- Contribution of $500,000 to the Véro & Louis Foundation for the project to build its first living environment adapted to the needs of adults aged 21 and older with autism spectrum disorder.
- Desjardins was ranked the most generous company according to a recent survey on philanthropy conducted by the consulting firm Épisode, with more than $87 million in donations and sponsorships,
$317 million in individual dividends and $41 million in Desjardins Member Advantages for the fiscal year ended December 31, 2019.
For his achievements and tireless efforts to promote diversity and inclusion at Desjardins Group, Guy Cormier has received one of the four 2020 Catalyst Honours Champion Awards given by Catalyst Canada to business leaders at their annual conference.
Desjardins is constantly innovating to meet the needs of its members and clients. In an environment where the pandemic is still with us, we must continue to follow public health guidelines to slow the spread of COVID-19:
- In a first for the institution, Desjardins held 212 online special general meetings of the caisses so that members could vote on dividend payments while limiting the spread of the virus.
- The manager for Desjardins Funds, Desjardins Investments, became the manager with the most mutual funds on the TSX NAVex platform, with its 16 funds, 7 of which are Responsible Investing (RI) funds that are 100% oil production and pipeline free.
- A new $100 million investment in renewable energy, reaffirming Desjardins's commitment to renewable energy.
- The creation of Aequitas, a $50 million new impact investment fund for emerging and developing countries. Managed by Développement international Desjardins (DID), this fund will be used to promote gender equality, combat climate change and contribute to achieving other Sustainable Development Goals (SDGs), which are priorities for Desjardins.