2007 first nine-month results - Desjardins increases its surplus earnings by nearly 18% to 828 million as a result of solid growth in business and better operating cost control



    Increase in the provision for member dividends of nearly 20% to
    $415 million

    LEVIS, QC, Nov. 15 /CNW Telbec/ -

    
    Financial highlights

    Surplus earnings before member dividends of $828 million for the first
    nine months of the year and $248 million for the third quarter of 2007.
    Member dividends of $415 million, up 19.3% for the first nine months
    of 2007.
    Excellent financial performance by the caisse network with an increase in
    surplus earnings before member dividends of approximately 26% for the
    first nine months.
    Tier 1 capital ratio is still one of the best in the industry.
    Return on equity of 12.5% for the first nine months, compared to 11.6%
    for the same period last year.
    Improvement in the productivity ratio as a result of better cost control
    and strong growth in operating income.
    Assets grew by 15.2% to $146.9 billion.
    Increase of 90% in net sales of Desjardins Funds since the beginning
    of the year.
    Assumption of assets held in the form of non-bank-sponsored asset-backed
    commercial paper to protect members and clients from prevailing market
    uncertainty.

    -------------------------------------------------------------------------
                            For the three-month           For the nine-month
                     periods ended September 30   periods ended September 30
                  -----------------------------------------------------------
                      2007      2006    Change      2007     2006     Change
                  -----------------------------------------------------------
    Surplus
     earnings
     before member
     dividends        $248M      $328M   (24.4%)    $828M    $704M      17.6%
    -------------------------------------------------------------------------
    Provision
     for member
     dividends        $127M      $147M   (13.6%)(*) $415M    $348M      19.3%
    -------------------------------------------------------------------------
    Return on
     equity           11.0%      15.8%       -      12.5%    11.6%         -
    -------------------------------------------------------------------------
    (*) Decrease explained by the adjustment of the accounting provision
        during the third quarter of 2006.

    Other financial data
    --------------------------------------------
    Assets          $146.9B    $127.5B    15.2%
    --------------------------------------------
    Equity            $9.1B      $8.3B     9.6%
    --------------------------------------------
    Tier 1 capital
     ratio           14.02%     14.08%       -
    --------------------------------------------
    Growth in
     total loans       8.1%       7.5%       -
    --------------------------------------------
    Growth in
     total deposits    8.7%       7.7%       -
    --------------------------------------------
    

    2007 third-quarter results

    For the third quarter ended September 30, 2007, Desjardins Group, the
largest integrated cooperative financial group in Canada, recorded combined
surplus earnings before member dividends of $248 million, down $80 million or
24.4% from the same quarter of 2006. This decrease was primarily due to a
write-down of 8.3% or $160 million ($107 million after taxes) related to
non-bank-sponsored asset-backed commercial paper (ABCP) holdings. Excluding
this write-down, combined surplus earnings before member dividends would have
been $355 million, up more than 8%.
    Furthermore, Desjardins Group announced during the quarter that it had
entered into a transaction with Canada's Credit Union Centrals in connection
with a strategic partnership. This transaction, together with the Visa Canada
Association restructuring, pursuant to which Desjardins will receive shares of
Visa Inc. in exchange for its interest in the former corporation's structure,
should generate non-recurring gains in the order of $110 million after taxes.
These gains will be recorded in the fourth quarter.
    For the third quarter, the caisse network strongly contributed to
Desjardins Group's solid financial performance with financial results up about
15% from the same quarter a year earlier. Similarly, the insurance
subsidiaries made a much higher contribution to Desjardins Group's combined
results, namely 38.5% for the life and health insurance subsidiary, and 64.3%
for the general insurance subsidiary.
    The provision for member dividends amounted to $127 million compared to
$147 million for the corresponding quarter of 2006, primarily as a result of
the adjustment of the accounting provision during the third quarter of 2006.
    "Consistent with the first six months of the year, the third-quarter
results were solid and continued to reflect the concerted efforts of all
Desjardins Group components, including the caisse network and their various
subsidiaries. We will be pursuing our game plan while maintaining rigorous
cost control," said Alban D'Amours, President and Chief Executive Officer of
Desjardins Group.
    Net interest income totalled $827 million, up $48 million or 6.2% from
the corresponding quarter of 2006, in particular as a result of higher
business volume. Insurance premiums increased by $68 million or 7.7%, while
annuity premiums were down by $10 million or 19.6%, resulting in an overall
increase of $58 million or 6.5% in net insurance premiums compared to the
third quarter of 2006. Other income was favourably affected by an increase of
$20 million or 14.5% in income from brokerage, investment fund and trust
services, as well as by an increase of $13 million or 15.7% in lending fees
and credit card service revenues.
    It should be noted that the effect of these increases in total income was
however mitigated by a $221 million decrease in investment income primarily as
a result of the accounting changes concerning to the life and health insurance
company's financial instruments and the non-bank-sponsored ABCP holdings.
    Overall, Desjardins Group's total income amounted to $2,253 million for
the third quarter of 2007, down $58 million or 2.5% on a year-over-year basis.
    The provisions for credit losses charged to income for the third quarter
of 2007 were $47 million, compared to $27 million a year earlier.
    Expenses related to claims, benefits, annuities and changes in insurance
provisions totalled $775 million for the third quarter of 2007, similar to the
corresponding quarter of 2006.
    Non-interest expenses amounted to $1,090 million, up $45 million or 4.3%
from the third quarter of 2006, as a result of effective control over
operating expenses.
    The return on equity, namely surplus earnings before member dividends
divided by average equity, stood at 11.0%, down from 15.8% for the same
quarter one year ago.
    It should be noted that last August, Desjardins announced that it would
assume the non-bank-sponsored ABCP held in certain mutual funds in order to
protect its members and clients from the prevailing market uncertainty. A few
weeks later, it also assumed the non-bank-sponsored ABCP acquired in
connection with the securities custody and lending activities undertaken by
Desjardins Trust on behalf of institutional clients for whom Desjardins had
not originally assumed the risk. All of this commercial paper, valued at
$1.2 billion, together with the commercial paper held by Desjardins for its
own investment purposes, was subsequently transferred to separate entities
created for that purpose. The overall amount of ABCP involved totals
$1.9 billion, on which the write-down of $160 million before income taxes is
applied.
    Furthermore, as part of its investing activities involving certain
guaranteed-capital savings products, Desjardins Group also had on its balance
sheet as at September 30, 2007, ABCP securities of $809 million. An equivalent
amount was recorded under deposit liabilities. Consequently, changes in the
value of this portfolio have no impact on Desjardins' financial performance.
It should also be noted that Desjardins Group was not a sponsor nor a
distributor of non-bank-sponsored ABCP.
    "I remain very confident about the success of the efforts of the
committee formed in connection with the Montréal Accord and to which we are
making an active contribution, insisted Mr. D'Amours. Above all, it was in the
best interest of our members and clients that we assumed these securities held
on their behalf. Given the complexity of this issue, we felt that it was more
appropriate under the circumstances to manage the overall situation from the
perspective of the entire Desjardins Group so that our members and clients
would not have to be concerned about the situation."
    The asset transfer related to non-bank-sponsored ABCP holdings and the
recognition of a write-down of these securities slightly reduced capital
ratios, with Tier 1 capital ratio falling, more specifically, by approximately
50 basis points. Nonetheless, Desjardins Group is still very strongly
capitalized, and its Tier 1 capital ratio is about 450 basis points above the
median for the major Canadian banks.

    Key third-quarter events

    Background on Capital Markets and Non-Bank-Sponsored ABCP

    The past few months were particularly marked by turbulence on Canadian
and international capital markets stemming primarily from the situation of
structured products linked to the U.S. subprime mortgage market. This led to a
loss of confidence in certain financial products, especially asset-backed
commercial paper issued by non-bank conduits, and triggered a liquidity crisis
in the markets.
    In order to mitigate the impact of the lack of liquidity in the
non-bank-sponsored ABCP market and restore a climate of confidence, an
agreement was entered into in August 2007 by several investors and financial
institutions, including Desjardins Group, which is aiming to favour the
resumption of normal activities on the Canadian non-bank-sponsored ABCP
market. This agreement has since led to the formation of a pan-Canadian
committee, which includes investors who were signatories of the Montréal
Accord and other significant holders bringing a national perspective, relevant
experience and associations with the private sector, institutional investors,
government agencies and crown corporations. The deadline for the work of this
committee has been extended to December 14, 2007.

    Canada-wide development

    In the third quarter of 2007, Desjardins Group announced the creation of
a strategic partnership with Canada's Provincial Credit Union Centrals aimed
at accelerating the growth of NorthWest Mutual Funds Inc. and The Ethical
Funds Company through enhanced distribution of their products. This new
partnership involves the creation of a national mutual fund firm with
$5.5 billion in assets under management. This initiative is consistent with
Desjardins' strategy to enhance its position in the Canadian mutual fund
market. The transaction is expected to be completed by the end of 2007 and it
should enable Desjardins Group to record a gain of approximately $50 million
after income taxes, the final amount of which will be calculated once the
transaction has been completed.
    It should also be noted that during the third quarter, Desjardins
announced the renewal of its partnership with Alimentation Couche-Tard inc.,
as its payment solutions provider. After their 10 years of partnership,
Desjardins and Alimentation Couche-Tard inc. not only renewed their agreement
in Québec, but also extended it to the rest of the Canadian market, which is
served by Alimentation Couche-Tard inc. under the Mac's banner, as the
exclusive point-of-sale transaction processing provider.

    Global VISA restructuring

    Early in October 2007, Visa Inc. announced that it had restructured its
operations. This involved a series of transactions, through which Visa Canada,
Visa U.S.A. and Visa International became subsidiaries of Visa Inc. In
exchange of its membership interest in the Visa Canada Association member, the
Fédération des caisses Desjardins du Québec will receive Visa Inc. shares and
expects to record a gain on this transaction in its fourth quarter of 2007.
The amount of the gain will be calculated following completion of an
independent valuation and the determination of the number of shares to be
allocated to the Fédération (and to the other former members of the Visa
Canada Association) at the time of restructuring. This gain is estimated at
about $60 million after income taxes.

    Results for the first nine months of 2007

    For the nine-month period ended September 30, 2007, Desjardins Group
declared combined surplus earnings before member dividends of $828 million, up
$124 million or 17.6% from $704 million during the same period of 2006. The
return on equity stood at 12.5%, up from 11.6% for the corresponding period of
2006. Excluding the ABCP securities write-down, combined surplus earnings
before member dividends would have been $935 million, up 32.8%, and the return
on equity would have been 14.1%.
    The provision for member dividends recorded for the first nine months of
2007 totalled $415 million, up 19.3% from $348 million one year ago.
    Desjardins still ranks among the best-capitalized financial institutions
in Canada, with a Tier 1 capital ratio of 14.02% as at September 30, 2007.
This exceeded Desjardins Group's capitalization target and was one of the best
in the industry. The total capital ratio was 13.48%, compared to 14.11% as at
September 30, 2006. This decrease stemmed from the repayment of the Series B
subordinated debt of Capital Desjardins totalling $500 million on June 1,
2007.
    The solid profitability of the first nine months of 2007 resulted from
the strong financial performance of all Desjardins Group components. The
Personal and Commercial segment performed particularly well and increased
significantly its profitability, especially in the caisse network, whose
financial results were up sharply by approximately 26%. This segment benefited
in fact from both increased operating revenue and effective control over
operating expenses. In addition, the insurance subsidiaries' profitability was
up. The life and health insurance subsidiary's was favourably impacted by
improved experience and slow growth in administrative expenses, among other
things. As for the general insurance subsidiary, it benefited from strongly
performing investments and a favourable claims experience.
    "There is no question that our results for the first nine months of the
year are very encouraging. Indeed, and they motivate us to pursue our efforts
to continually improve the way we meet our members' and clients' needs," added
Mr. D'Amours. "These financial results bear witness to the strength of the
caisse network, in addition to the buoyancy of our subsidiaries, which have
maintained successful growth in Quebec and across Canada. With its track
record of success and development, Desjardins Group - the largest financial
cooperative in Canada - provides daily proof that the financial cooperative
model has a very bright future."
    Desjardins Group's results for the first nine months of 2007 fall within
the financial framework established during the creation of the 2006-2008
Strategic Plan. The objectives were achieved as a result of substantially
higher profitability, higher business volume and effective operating expense
controls. We would like to recognize the hard work of all Desjardins Group
components to improve the gap between revenue and expense growth (namely, the
operating leverage). Their sustained efforts, in conjunction with the positive
results of work relating to the Group's financial, real estate and operational
synergies, contributed to overall improved productivity.
    As for revenues, net interest income totalled $2,424 million, up
$143 million or 6.3% primarily due to higher business volume. Insurance
premiums grew by $194 million or 7.6% for the first nine months, while annuity
premiums decreased by $144 million or 48.7%, for a $46 million or 1.7%
increase in net insurance premiums compared to the same period in 2006. Other
income reflected a $75 million or 17.8% increase in income from brokerage,
investment fund and trust services, and of $43 million or 18.3% increase in
income from lending fees and credit card service revenues.
    These substantial increases were however reduced by a $414 million
decrease in investment income resulting primarily from the impairment loss
recorded in the quarter with respect to accounting changes concerning the life
and health insurance company's financial instruments (a decrease offset by an
equivalent decrease in expenses related to claims, benefits, annuities and
changes in insurance provisions) and to non-bank-sponsored ABCP holdings.
    Overall, Desjardins Group's total income amounted to $6,827 million for
the first nine months of 2007, down slightly by 0.8% from the corresponding
period of 2006.
    The provisions for credit losses for the first nine months of 2007
totalled $132 million, compared to $94 million a year earlier. Desjardins
Group continues to enjoy a high-quality loan portfolio with a ratio of gross
impaired loans to the gross loan portfolio of 0.42%.
    Expenses related to claims, benefits, annuities and changes in insurance
provisions for the first nine months ended September 30, 2007 stood at
$2,108 million, down $355 million or 14.4% on a year-over-year basis, as a
result of the decrease in annuity activities coupled with the life and health
insurance subsidiary's decline in investment income, as previously noted.
    Non-interest expenses totalled $3,424 million for the first nine months
of 2007, for a limited increase of 3.2% from a year earlier, because of
effective operating expense controls.
    The productivity ratio, i.e., Desjardins Group's non-interest expenses to
total income, net of expenses related to claims and insurance benefits,
improved to 72.6% for the first nine months of 2007, versus 75.1% for the
corresponding period in 2006, reflecting improved operating leverage despite
the impairment loss recorded in the third quarter with respect to ABCP
holdings.
    Finally, as at September 30, 2007, Desjardins Group's total assets stood
at $146.9 billion, up from $127.5 billion one year ago, representing a
significant increase of 15.2% or $19.4 billion.

    Results by business segment

    Personal and Commercial

    This segment primarily consists of the caisse network, the Fédération des
caisses Desjardins du Québec, Caisse centrale Desjardins, the Fonds de
sécurité Desjardins, Capital Desjardins Inc., Desjardins Trust and the Ontario
federation and caisses.
    For the third quarter ended September 30, 2007, surplus earnings before
member dividends for the Personal and Commercial segment totalled
$272 million, a similar level to the corresponding quarter of 2006. Total
income grew $42 million or 3.6%, while net interest income was up $49 million
or 6.3%. Other income benefited from increases of $17 million in income from
brokerage, investment fund and trust services, and of $13 million in income
from credit card activities. However, due to a decrease of $58 million for
investing and trading income, other income fell overall by $7 million or 1.8%
on a year-over-year basis.
    For the first nine months of 2007, surplus earnings before member
dividends for this segment totalled $668 million, up $120 million or 21.9%
compared to the same period one year ago. This strong improvement in financial
performance is attributable, in particular, to the increase in operating
income in tandem with effective cost control. The caisse network's higher
profitability and the resounding success of investment fund sales are also
noteworthy.
    Total income for the Personal and Commercial segment for the first nine
months of 2007 stood at $3,569 million, up $283 million or 8.6% from the
corresponding period in 2006. Net interest income was $2,430 million, up
$143 million or 6.3%, chiefly as a result of higher business volume.
    Other income amounted to $1,139 million for the first nine months of
2007, up $140 million or 14.0% from a year earlier. Income from brokerage,
investment fund and trust services rose $53 million especially because of a
growth of approximately 28% in Desjardins Funds outstanding compared to
September 30, 2006. Lastly, income from credit card activities was up
$43 million as a result of higher business volume.
    The provisions for credit losses totalled $130 million for the first nine
months of 2007, versus $95 million a year earlier. The ratio of gross impaired
loans to the gross loan portfolio remained stable.
    Non-interest expenses were $2,527 million, up $102 million or 4.2% from
the same period in 2006. Nearly 55% of this increase stemmed from higher
salaries and fringe benefits, largely due to the annual indexation of
salaries.
    In addition, Caisse centrale Desjardins contributed $81.8 million to the
Personal and Commercial segment for the first nine months of 2007, up 4.9% on
a year-over-year basis.
    In the area of financing activities, the Personal and Commercial segment
turned in a solid performance in the third quarter of 2007. The loan portfolio
grew by 9.2% or $7.8 billion on an annual basis. These excellent results were
attributable to higher demand for residential mortgages and for commercial and
industrial credit. Residential mortgages increased by 7.2% or $3.6 billion on
an annual basis to a total of $53.9 billion as at September 30, 2007. The boom
in the Québec housing market translated into a 14.7% increase in housing
starts and a 14.0% increase in the number of transactions in the existing home
resale market since the beginning of the year, creating a favourable business
development climate.
    In the Personal and Commercial segment, outstanding loans to business and
government increased significantly during the third quarter, with loans
outstanding rising by 17.5% or $3.6 billion on an annual basis to
$24.0 billion as at September 30, 2007.
    As regards Caisse centrale Desjardins' corporate financing activities,
new business approved totalled more than $1.3 billion as at September 30,
2007, as a result in particular of the approval of a number of files in which
Caisse centrale acted as banking co-syndicate agent. Caisse centrale owes this
development to its ability, among other things, to assist businesses in new
markets in Canada, as well as in the United States and Europe. New financing
approved outside Québec therefore accounted for about 45% of the approved
business, partly as a result of the involvement of Caisse centrale Desjardins
U.S. Branch, which has been in operation since August 2006.
    Desjardins Group's securitized mortgage loan program, involving
Desjardins caisses in Québec and Ontario as well as Desjardins Credit Union,
continued successfully. The cumulative total since the program was launched in
September 2005 stands at nearly $2.5 billion.
    It should be pointed out that Caisse centrale's assets exceeded the      
$20-billion mark for the first time as at September 30, 2007, for an 8%
increase since the end of the previous quarter. This growth stems from its
activities as Desjardins Group's Treasurer, which included issuing
$100 million in capital during the third quarter of 2007, allowing it to
maintain a sound capitalization.
    Caisse centrale also owns non-bank-sponsored ABCP securities for an
amount of $39.6 million on assets of $20 billion. Caisse centrale continues to
enjoy investment grade credit ratings from Standard & Poor's (AA-) and Moody's
(Aa1), and its capitalization remains excellent with Tier 1 capital and total
capital ratios determined based on risk-weighted assets and commitments of
10.6% and 12.6%, respectively, as at September 30, 2007.
    As at September 30, 2007, outstanding deposits in the Personal and
Commercial segment totalled $94.8 billion, up 8.9% or $7.8 billion from
$87.0 billion one year ago. Savings from individuals rose by 5.7% or
$3.5 billion on an annual basis to $64.8 billion as at September 30, 2007 and
represented 68.4% of the segment's deposit liabilities as of that date.
Deposits from businesses and governments grew by an even more robust 19.6% or
$3.2 billion on an annual basis, reaching $19.6 billion.
    Finally, despite stock market volatility during the third quarter of
2007, due in part to the financial crisis caused by the situation in the U.S.
subprime mortgage sector, the Personal and Commercial segment performed very
well in terms of off-balance sheet savings product sales. The segment's
amounts outstanding of investment funds and assets under its custody in the
securities brokerage area increased by 19.1% or $4.1 billion over the past
year, totalling $25.7 billion as at September 30, 2007.

    Life and Health Insurance

    For the third quarter of 2007, the contribution of Desjardins Financial
Security (DFS) was $54.0 million, up 38.5% from $39.0 million for the
corresponding period of 2006. Insurance premium income for the period rose
12.7% to $595.1 million, while insurance sales totalled $30.4 million.
    For the first nine months of 2007, DFS' net earnings increased sharply.
The portion of net earnings attributable to the ultimate shareholders, the
Desjardins caisses, amounted to $164.6 million, up $57.7 million. As a result,
return on equity still ranks as one of the best in the financial services
industry.
    Gross insurance premium income for the first nine months of 2007 reached
$1,801.4 million, up $193.8 million or 12.1%. However, total income of
$2,192.4 million was down 7.4% due to a decrease in investment income
following accounting changes concerning financial instruments and to a
decrease in annuity premiums. In terms of net earnings, however, these
decreases were offset by an equivalent change in expenses related to claims,
benefits, annuities and changes in insurance provisions.
    New insurance sales totalled $240.4 million, up $41.4 million compared to
the first nine months of 2006. This increase was attributable to the major
group insurance contracts awarded in Ontario, as well as in Newfoundland and
Labrador. Sales of individual savings products totalled $858.9 million, up
$41.4 million. A 33.9% increase in mutual fund sales and a 27.1% increase in
Millennia segregated fund sales offset the 35.9% decrease in sales of group
retirement products, compared to the first nine months of 2006, when a number
of major annuity payment contracts had been entered into.
    Assets under management and administration totalled $22.3 billion, up
12.0% since the beginning of the year.

    General Insurance

    For the third quarter ended September 30, 2007, the contribution of
Desjardins General Insurance Group (DGIG) to Desjardins Group's results was
$46.4 million, up 64.3% from a year earlier. This growth was due to an
increase in underwriting profit as well as to the solid performance of
investments. Return on equity rose to 39.8%, compared to 26.1% in the previous
year.
    For the first nine months of 2007, DGIG's contribution totalled
$118.3 million, up from $87.8 million for the corresponding period of 2006.
This growth resulted from a higher underwriting profit and an increase in
investment income. Return on equity rose to 32.3%, compared to 27.5% a year
earlier.
    The solid results for the first nine months of 2007 is explained by the
declining claims experience in home insurance, which offsets the higher
operating expenses ratio. The increase of this ratio was attributable to major
investment projects initiated by DGIG in the previous few months in order to
enable it to reposition itself in terms of its competitive advantages.
    In addition, investment income rose by $28.0 million from the previous
year as a result of higher interest and dividend income stemming from an
increase in the investment portfolio and the return on equity investments.
    In addition, gross premiums written, totalling $1,084.1 million, were up
slightly from $1,078.0 million for the first nine months of 2006, given the
context of lower automobile insurance rates throughout the Canadian market.

    Securities Brokerage, Asset Management, Venture Capital and Other

    This segment primarily encompasses the operations of Desjardins
Securities, Desjardins Asset Management and Desjardins Venture Capital.

    During the third quarter of 2007, Desjardins Securities recorded
$72.1 million in income, up 20% from $59.9 million for the same period of
2006. Desjardins Securities' net earnings totalled $1.5 million for the third
quarter of 2007, compared to a net loss of $3.9 million for the corresponding
quarter in 2006.
    For the first nine months of 2007, Desjardins Securities' income totalled
$230.8 million, up 15.5% from $199.9 million a year earlier. The performance
of all the company's divisions matched or, for the most part, exceeded that of
the corresponding period of 2006.
    Desjardins Securities' net earnings totalled $4.2 million for the first
nine months of 2007, as opposed to a net loss of $6.2 million a year earlier,
representing a turnaround of $10.4 million. It is noteworthy that Desjardins
Securities has posted higher sales for the fifth consecutive year and
continues to strive to recruit new clients and develop new markets.
    For the third quarter of 2007, Desjardins Asset Management reported net
earnings of $3.8 million, compared to $8.1 million for the same period in
2006, thus bringing net earnings for the first nine months to $12.6 million,
compared to $22.7 million for the corresponding period of 2006.
    It should be noted that the 2006 results of Desjardins Asset Management
were enhanced by a dilution gain related to its interest in a company subject
to significant influence. In addition, as a result of the commissioning
agreement that it entered into at the end of fiscal 2006 with the Fédération
des caisses Desjardins du Québec, as part of the efforts to promote structured
savings products sold by the caisse network, net earnings were lower for the
period ended September 30, 2007.
    In addition, assets under management grew by close to 10%, from
$46.7 billion as at December 31, 2006, to $50.6 billion as at September 30,
2007, essentially because of changes in securities and real estate
investments, as well as in securities lending. This last asset class, which is
subject to significant fluctuations, increased by 15.0% since December 31,
2006.
    As a result of fluctuations in the value of venture capital investments
due mainly to market developments, the investment funds of Desjardins Group
managed by Desjardins Venture Capital recorded a net loss of close to
$6 million for the third quarter of 2007, compared to a net loss of nearly
$1 million for the corresponding year-earlier quarter. This brought the
cumulative net loss to $2 million for the first nine months of 2007, compared
to the break-even point a year earlier.
    Desjardins Group's combined results also reflect various consolidation
adjustments that were not included in the business segment results,
particularly the employee future benefits expense, which recorded a
significant $36 million after-tax decrease compared to 2006, primarily due to
the updating of certain actuarial assumptions.
    The write-down recorded in the third quarter of 2007 with respect to ABCP
holdings was recorded in the "Other" segment. This write-down will be
allocated to the respective business segments during the fourth quarter of
2007.
    Relying on the strength of its cooperative difference, its network of
subsidiaries and its financial equilibrium, Desjardins Group seeks to become
the leading financial institution in terms of meeting the needs of members and
clients and fostering business development through an accessible, effective
and comprehensive service offering. Desjardins Group's mission is to
contribute to the economic and social well-being of both individuals and
communities. Please visit Desjardins Group's website at www.desjardins.com.

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For further information:

For further information: (for journalists only): André Chapleau,
Director, Information and Media Relations, (514) 281-7229, 1-866-866-7000,
ext. 7229, andre.chapleau@desjardins.com


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