Desjardins Group, the largest association of credit unions in North America, recorded $1,591 million in surplus earnings for fiscal 2012, similar to the amount posted one year earlier.
In 2012 Desjardins had a strong capital base and was able to ensure stable and diversified refinancing. It attained $1 billion of sales of capital shares in the Federation in fiscal 2012, while savings recruitment increased 5.0 percent, to $129.6 billion.
Referring to Desjardin’s business growth, Monique Leroux, the Group’s CEO said: "I am very satisfied with the financial performance of our co-operative financial group in 2012. It demonstrates the depth of our members' and clients' trust, year after year, and how Desjardins Group's offer adds value. We worked on improving our service offer throughout the year, both in the Personal Services and Institutional Services segment and in wealth management and insurance.
She continued: “I am also pleased with our business growth, as evidenced by a major increase in our insurance premiums and the success of both the business ownership transfer program and the Ready-to-Drive Loan program, our innovative auto financing offer.”
Desjardins also continues to have an excellent quality loan portfolio and one of the best ratios of gross impaired loans to the total gross loan portfolio in Canadian banking – 0.35 percent. Gross impaired loans outstanding stood at $466 million as at December 31, 2012, compared to $520 million at the end of 2011.
Return on equity was 10.4 percent, compared to 12.2percent in 2011. This decrease resulted from an increase in equity following the issuance of $1.0 billion of capital shares in the Federation and growth in retained earnings.
Desjardins has also given a total of $364 million back to members and the community, including the provision for member dividends, sponsorships and donations.
Ms Leroux said she was particularly pleased with Desjardin’s financial performance achieved throughout 2012, the International Year of Co-operatives.
"Declared by the United Nations the International Year of Cooperatives, 2012 was also the year we held the first International Summit of Cooperatives, allowing us to demonstrate the major role played by co-operatives in our economies," added Ms. Leroux. "More than ever, the cooperative model has made inroads around the world, and of course Desjardins Group will continue to provide leadership in this area, for the benefit of its members and clients as well as that of our communities."
Desjardins Group's approach to distributing surplus earnings seeks a healthy balance between development and capitalization. For fiscal 2012, the liability provision for member dividends was $305 million, compared to $331 million in 2011. A $23 million downward adjustment was recorded as provision for member dividends in 2012 to account for the reversal of the amount provisioned in 2011.
Investment income reached $1,178 million at the end of the year, down $1,091 million, or 48.1 percent, compared to fiscal 2011. This was mainly attributable to investment income related to life and health insurance activities, due to a $1,073 million change in the fair value of assets used to support liabilities. This decline was almost fully offset by a decrease in the related actuarial provisions.
Desjardins Group's total assets stood at $196.7 billion in December 2012, up $6.6 billion, or 3.5 percent, from one year earlier. In spite of the economic crisis affecting Canada and the rest of the world, the Group continued to expand in 2012 due in large part to strong credit demand from individuals, including for residential mortgage finance.
Desjardins Group was also very active in business financing. Its loans outstanding in this sector, which stood at $26.9 billion as at December 31, 2012, were up $871 million, or 3.4 percent, for the year. This compares with an increase of $1.2 billion, or 4.9 percent in 2011.
Desjardins Group is also one of the best-capitalised financial institutions in Canada. Its Tier 1 and total capital ratios, measured under the Basel II regulatory framework, stood at 16.8 percent and 19.3 percent respectively, as at December 31, 2012.
The credit ratings of Caisse centrale Desjardins and Capital Desjardins inc. remain among the best in the industry and compare favourably with those of many large international and Canadian financial institutions.
Ranked 16th among the World's 50 Safest Banks 2012 by Global Finance magazine, Desjardins Group, the leading cooperative financial group in Canada, inspires trust around the world through the commitment of its people, its financial strength and its contribution to sustainable prosperity. Desjardins Group's mission is to contribute to improving economic and social well being of people and communities. For more information, visit: www.desjardins.com.