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The bulk alternate to associates and the association accomplished $84 million, up $19 million
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LÉVIS, QC, Nov. 10, 2017 /CNW Telbec/ - For the third division concluded September 30, 2017, Desjardins Group, Canada's bigger accommodating banking group, recorded surplus balance afore affiliate assets of $758 million, up $304 million from the aforementioned division of 2016. This aftereffect includes a $258 actor gain, net of costs and afterwards assets taxes, accomplished on the auction of its subsidiaries Western Banking Accumulation Inc. and Western Life Assurance Company. Adapted surplus earnings(1) were $508 million, up $47 actor or 10.2%. This able achievement allows Desjardins to accomplish its accommodating mission for the account of associates and audience while authoritative a absolute accession to the abundance of the communities it serves.
The bulk alternate to associates and the association was $84 actor (Q3 2016: $65 million), including a $60 million accouterment for affiliate assets (Q3 2016: $35 million); $14 actor in sponsorships, donations and scholarships (Q3 2016: $19 million); and $10 actor in Desjardins Affiliate Advantages (Q3 2016: $11 million).
"We can absolutely booty pride in these accomplished results, but what gives me the greatest achievement are the absolute impacts that Desjardins generates, as apparent in the added amounts we gave aback to our associates and the community," said Guy Cormier, Chair of the Board, President and Chief Executive Officer. "In accession to this, we are bent to get alike afterpiece to our associates and clients. A accurate affidavit of this lies in our $100-million development armamentarium to abutment projects in Quebec and Ontario, in band with our socio-economic mission."
A socially absent accommodating group
Due to the abiding charge of its caisses in the communities they serve, Desjardins is appreciative of its achievements that aftereffect in a absolute aberration in people's lives. Examples include:
An avant-garde banking group
In agreement of innovation, Desjardins associates can calmly advance their mortgage face-lifting action by signing it electronically, after defective to appointment a caisse. Furthermore, Desjardins has developed a cybersecurity kit for SMEs. Accessible online, the kit offers a abundance of activated admonition on how to bigger assure businesses from cyberattacks.
Also, 1,000 participants, experts and advisers alternate in the barrage of the third copy of the Cooperathon. Over the accomplished few weeks, accommodating teams took on a alternation of challenges about developing activated solutions to issues in banking technologies (fintech), health, the acute and across-the-board city, and education. At the end of the competition, the best projects accustomed prizes that included allotment to abide assignment on their projects or to advance their start-up.
Lastly, Desjardins and the Caisse de dépôt et adjustment du Québec (CDPQ) appear the conception of an advance armamentarium committed alone to fintechs and bogus intelligence activated in finance. The allotment is currently in an bulk of $50 million, appropriately disconnected amid CDPQ and Desjardins.
Financial after-effects for the third quarter
The access in adapted surplus earnings(1) in the third division was abundantly due to the accession fabricated by the caisse network, which continues to grow, and by the Acreage and Blow Allowance segment, which benefited from a added favourable claims acquaintance for the accepted year than that recorded for the aforementioned division of 2016, decidedly in home and auto insurance. Above contest had beneath of an appulse than in the aforementioned division of 2016, aback there were added of them as able-bodied as a austere barrage storm in Alberta.
Net absorption assets was $1,136 million, up $65 actor from the aforementioned aeon of 2016. This advance was due to accretion costs activities in mortgages, business loans and point-of-sale financing, admitting awful aggressive bazaar altitude that put burden on absorption margins.
The advance in activity and bloom allowance operations and in acreage and blow insurance, accumulated with the appulse of the reinsurance accord active as allotment of the accretion of the Canadian operations of State Farm, led to a 5.8% access in net premiums, to $1,982 actor (Q3 2016: $1,873 million).
Excluding the gross accretion on the auction of subsidiaries, added operating income(1) stood at $641 million, up $24 actor from the aforementioned aeon of 2016. This access was about the aftereffect of college assets from assets beneath administration and from lending fees and acclaim agenda account revenues. The college assets from acclaim agenda account revenues, which came from business growth, consisted mainly of assets from the assorted acquittal solutions offered by Desjardins's Agenda and Acquittal Services, totalling $154 actor (Q3 2016: $139 million).
Story Continues
Desjardins Group's accommodation portfolio connected to be of aerial affection as apparent by the gross broken loans ratio, which, bidding as a allotment of the absolute gross loans and acceptances portfolio, was 0.27% as at September 30, 2017, a abatement from 2016. Similarly, the accouterment for acclaim losses was $92 million, bottomward $6 million from the aforementioned aeon of 2016.
Non-interest bulk stood at $1,685 actor (Q3 2016: $1,706 million). This abatement in costs reflects the accomplishing of abundance initiatives, including those involving salaries. The lower non-interest bulk was additionally attributable to the auction of Western Banking Accumulation Inc. and Western Activity Assurance Company on July 1, 2017, and the auction of Western Banking Allowance Company on January 1, 2017. The abatement in non-interest bulk was partly account by the appulse of the reinsurance accord active as allotment of the accretion of the Canadian operations of State Farm and by business growth, including acclaim agenda activities, point-of-sale costs and assets beneath management.
Total assets of $276.3 billion, up $17.9 billion
As at September 30, 2017, Desjardins Accumulation had absolute assets of $276.3 billion, up $17.9 billion or 6.9% aback December 31, 2016. This access was abundantly due to advance in the net loans and acceptances portfolio and the balance portfolio.
Strong basic base
Desjardins Accumulation maintains absolute acceptable assets levels in acquiescence with Basel III rules. Its Tier 1A and absolute basic ratios were 17.8% and 18.2%, respectively, as at September 30, 2017, compared to 17.3% and 17.9% as at December 31, 2016.
Results for the aboriginal nine months of 2017
At the end of the aboriginal nine months of 2017, surplus balance afore affiliate assets was $1,722 actor (2016: $1,263 million), up 36.3%. Adapted surplus balance afore affiliate dividends(1) stood at $1,497 million, up $210 actor or 16.3%. In accession to the affidavit accustomed for the third division results, this access was about due to the acceptable advance achievement and assets accompanying to the advance of assets beneath management, accustomed in the Abundance Administration and Activity and Bloom Allowance segment.
Segment after-effects for the third division of 2017
Personal and Business Services
For the third division of budgetary 2017, the Claimed and Business Casework articulation appear surplus balance afore affiliate assets of $304 actor (Q3 2016: $284 million). This access was mainly due to acceptable achievement in the caisse network.
For the aboriginal nine months of 2017, the segment's surplus balance totalled $822 actor (2016: $767 million).
Wealth Administration and Activity and Bloom Insurance
Net surplus balance generated by the Abundance Administration and Activity and Bloom Allowance articulation were $121 million at the end of the division (Q3 2016: $126 million). This 4.0% decline, which was abundantly due to a breakable claims experience, was partly account by the bigger absorption rates, which led to a absolution of the actuarial provision, and by advance in assets beneath management.
For the aboriginal nine months of 2017, surplus balance totalled $453 actor (2016: $347 million). This access was mostly due to acceptable advance achievement and assets accompanying to advance in assets beneath management.
Property and Blow Insurance
The Acreage and Blow Allowance articulation recorded net surplus balance of $318 actor in the third division of 2017 (Q3 2016: $26 million). Adapted net surplus earnings(1) stood at $71 million, up $38 million. This access in surplus balance was, in particular, due to the year-to-date claims experience, which was bigger than the claims acquaintance for the aforementioned aeon of 2016, decidedly in auto allowance and acreage allowance due to above contest that had beneath of an appulse than in the aforementioned division of 2016, aback there were added of them as able-bodied as a austere barrage storm in Alberta.
For the aboriginal nine months of 2017, adapted net surplus earnings(1) totalled $181 actor (2016: $138 million).
_______________________________1See "Basis of presentation of banking information."
Key Banking Data
FINANCIAL POSITION AND KEY RATIOS
(in millions of dollars and as a percentage)
As at September 30, 2017
As at December 31, 2016
Assets
$
276,310
$
258,367
Residential mortgage loans
$
111,442
$
106,695
Consumer, acclaim agenda and added claimed loans
$
23,361
$
22,150
Business and government loans(1)
$
39,756
$
37,637
Total gross loans(1)
$
174,559
$
166,482
Equity
$
24,748
$
23,293
Tier 1A basic ratio
17.8
%
17.3
%
Tier 1 basic ratio
17.9
%
17.3
%
Total basic ratio
18.2
%
17.9
%
Leverage ratio
8.3
%
8.1
%
Gross broken loans/gross loans and acceptances ratio(2)
0.27
%
0.32
%
(1) Includes acceptances.
(2) See "Basis of presentation of banking information."
COMBINED INCOME
For the three-month periods
For the nine-month periods
ended
Ended
(in millions of dollars and as a percentage)
Sept. 30,2017
June 30,2017
Sept. 30,2016
Sept. 30,2017
Sept. 30,2016
Operating income(1)
$
4,037
$
3,900
$
3,561
$
11,692
$
10,534
Surplus balance afore affiliate dividends
$
758
$
581
$
454
$
1,722
$
1,263
Adjusted surplus balance afore affiliate dividends
$
508
$
590
$
461
$
1,497
$
1,287
Return on equity(1)
12.6
%
9.9
%
8.3
%
9.8
%
7.7
%
Adjusted acknowledgment on equity(1)
8.3
%
10.1
%
8.4
%
8.5
%
7.9
%
(1) See "Basis of presentation of banking information."
CONTRIBUTION TO COMBINED SURPLUS EARNINGS BY BUSINESS SEGMENT
For the three-month periods
For the nine-month periods
ended
ended
(in millions of dollars)
Sept. 30,
2017
June 30,
2017
Sept. 30,
2016
Sept. 30,
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2017
Sept. 30,
2016
Personal and Business Services
$
304
$
272
$
284
$
822
$
767
Wealth Administration and Activity and Bloom Insurance
$
121
$
189
$
126
$
453
$
347
Property and Blow Insurance(1)
$
318
$
98
$
26
$
398
$
114
Other
$
15
$
22
$
18
$
49
$
35
Desjardins Group(1)
$
758
$
581
$
454
$
1,722
$
1,263
(1) Adjusted surplus balance are presented in "Basis of presentation of banking information."
CREDIT RATINGS OF SECURITIES ISSUED
DBRS
STANDARD &POOR'S
MOODY'S
FITCH
Fédération des caisses Desjardins du Québec
Short-term
R-1 (high)
A-1
P-1
F1
Senior medium- and long-term
AA
A
Aa2
AA-
Capital Desjardins inc.
Senior medium- and long-term
AA (low)
A
A2
A
More abundant banking advice can be begin in Desjardins Group's acting Management's Discussion and Analysis, which will be accessible on the SEDAR website beneath the Basic Desjardins inc. profile.
About Desjardins Group
Desjardins Accumulation is the arch accommodating banking accumulation in Canada and the sixth bigger accommodating banking accumulation in the world, with assets of $276.3 billion. It has been rated one of the Best Employers in Canada by Aon Hewitt. To accommodated the assorted needs of its associates and clients, Desjardins offers a abounding ambit of articles and casework to individuals and businesses through its all-encompassing administration network, online platforms and subsidiaries above Canada. Counted amid the world's arch banks according to The Banker magazine, Desjardins has some of the accomplished basic ratios and acclaim ratings in the industry.
Caution apropos advanced statements
Certain statements fabricated in this columnist absolution may be forward-looking. By their absolute nature, advanced statements absorb assumptions, uncertainties and inherent risks, both accepted and specific. It is accordingly accessible that, due to abounding factors, these predictions, forecasts or added advanced statements as able-bodied as Desjardins Group's objectives and priorities may not actualize or may prove to be inaccurate and that absolute after-effects alter materially. Assorted factors that are above Desjardins Group's control, and accordingly whose impacts on Desjardins are difficult to predict, could access the accurateness of the advanced statements in this columnist release. Additional advice on these and added factors are accessible beneath the accident administration area of Desjardins Group's 2016 anniversary Management's Discussion and Analysis. Although Desjardins Accumulation believes that the expectations bidding in these advanced statements are reasonable, it cannot agreement that these expectations will prove to be correct. Desjardins Accumulation cautions readers adjoin agreement disproportionate assurance on these advanced statements aback authoritative decisions. Desjardins Accumulation does not undertake to amend any exact or accounting advanced statements that may be fabricated from time to time by or on account of Desjardins Group, except as appropriate beneath applicative balance legislation.
Basis of presentation of banking information
The banking advice in this certificate comes primarily from the 2017 annual banking statements. Those statements accept been able by Desjardins Group's administration in accordance with the International Banking Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and the accounting requirements of the Autorité des marchés financiers (AMF) in Quebec, which do not alter from IFRS. Unless contrarily indicated, all amounts are in Canadian dollars ($).
To appraise its performance, Desjardins Accumulation uses IFRS measures and assorted non-IFRS banking measures. Non-IFRS banking measures, added than the authoritative ratios, do not accept connected definitions and are not anon commensurable to agnate measures acclimated by added companies, and may not be anon commensurable to any IFRS measures. Investors, amid others, may accretion these non-IFRS measures advantageous in allegory banking performance. The measures acclimated are authentic as follows:
Adjusted surplus balance for Desjardins Accumulation afore affiliate dividends
The abstraction of adapted surplus balance is acclimated to exclude specific items in adjustment to present achievement acquired from operating activities. Those specific items, such as acquisitions and disposals, are characterized as actuality different to operations.
Desjardins Group's surplus balance afore affiliate assets accept been adapted to exclude the afterward specific items: the accretion and the expenses, net of assets taxes, accompanying to the auction of its subsidiaries Western Banking Accumulation Inc. and Western Activity Assurance Company as able-bodied as the costs incurred as allotment of the accretion of the Canadian operations of State Farm Mutual Auto Allowance Company (State Farm), completed on January 1, 2015. The closing costs accommodate the costs accompanying to the transaction and the affiliation of operations as able-bodied as processing expenses.
For the three-month periods
For the nine-month periods
ended
ended
(in millions of dollars)
September 30, 2017
June 30,
2017
September 30, 2016
September 30, 2017
September 30, 2016
Presentation of the surplus balance afore affiliate assets in the Accumulated Banking Statements
$
758
$
581
$
454
$
1,722
$
1,263
Specific items, net of assets taxes
Gain and costs accompanying to the auction of Western Banking Accumulation Inc. and Western Activity Assurance Company(1)(2)
$
(258)
$
1
$
-
$
(249)
$
-
Expenses accompanying to the accretion of the Canadian operations of State Farm
$
8
$
8
$
7
$
24
$
24
Presentation of the adapted surplus balance afore affiliate assets in the Management's Discussion and Analysis
$
508
$
590
$
461
$
1 497
$
1 287
(1)
The bulk afore assets taxes is $278 actor for the nine-month aeon concluded September 30, 2017, as presented in Note 9, "Significant disposals", to the acting Accumulated Banking Statements.
(2)
Certain costs and taxes were accustomed in the aboriginal six months of 2017.
Adjusted net surplus balance for the Acreage and Blow Allowance segment
The net surplus balance of the Acreage and Blow Allowance articulation are adapted to exclude the accretion and the expenses, net of assets taxes, accompanying to the auction of Western Banking Accumulation Inc. and Western Activity Assurance Company, completed July 1, 2017, as able-bodied as the costs incurred as allotment of the accretion of the State Farm's Canadian operations, completed on January 1, 2015. The closing costs accommodate the costs accompanying to the transaction and the affiliation of operations as able-bodied as processing expenses.
For the three-month periods
For the nine-month periods
ended
ended
(in millions of dollars)
September 30,
2017
June 30,
2017
September 30,
2016
September 30,
2017
September 30,
2016
Presentation of the net surplus balance of the Acreage and Blow Allowance articulation in the Accumulated Banking Statements
$
318
$
98
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$
26
$
398
$
114
Specific items, net of assets taxes
Gain and costs accompanying to the auction of Western Banking Accumulation Inc. and Western Activity Assurance Company(1)(2)
$
(255)
$
1
$
-
$
(241)
$
-
Expenses accompanying to the accretion of the Canadian operations of State Farm
$
8
$
8
$
7
$
24
$
24
Presentation of the adapted net surplus balance of the Acreage and Blow Allowance articulation in the Management's Discussion and Analysis
$
71
$
107
$
33
$
181
$
138
(1)
The aberration amid these abstracts and those presented in the table for the adapted surplus balance of Desjardins Accumulation afore affiliate assets is
related to intersegment transaction expenses.
(2)
Some costs and taxes were accustomed in the aboriginal six months of 2017.
Gross broken loans/gross loans and acceptances ratio
The gross broken loans/gross loans and acceptances arrangement is acclimated to admeasurement accommodation portfolio affection and is according to gross broken loans bidding as a allotment of absolute gross loans and acceptances.
Return on disinterestedness and adapted acknowledgment on equity
Return on disinterestedness is acclimated to admeasurement profitability. Bidding as a percentage, it is according to surplus balance afore affiliate dividends, excluding the non-controlling interests' share, disconnected by boilerplate disinterestedness afore non-controlling interests.
Income
Operating income
The abstraction of operating assets is acclimated to assay banking results. This abstraction allows for bigger alignment of banking abstracts and makes it easier to assay operating activities from one aeon to the abutting by excluding the animation of after-effects specific to investments, decidedly apropos the admeasurement of activity and bloom allowance and P&C allowance operations, for which a absolute ample admeasurement of investments are accustomed at fair amount through accumulation or loss. The assay accordingly break bottomward Desjardins Group's assets into two parts, namely operating assets and advance income, which accomplish up absolute income. This admeasurement is not anon commensurable to agnate measures acclimated by added companies.
Operating assets includes net absorption income, generated mainly by the Claimed and Business Casework articulation and the Added category, net premiums and added operating assets such as drop and acquittal account charges, lending fees and acclaim agenda account revenues, assets from allowance and advance armamentarium services, administration and careful account fees, adopted barter assets as able-bodied as added income. These items, taken individually, accord to those presented in the Accumulated Banking Statements.
Investment income
Investment assets includes net assets on balance at fair amount through accumulation or loss, net assets on available-for-sale balance and net added advance income. These items, taken individually, accord to those presented in the Accumulated Banking Statements. The activity and bloom allowance and P&C allowance subsidiaries' analogous activities, which accommodate changes in fair value, assets and losses on disposals and absorption and allotment assets on securities, are presented with advance income, accustomed that these assets aback allowance liabilities, for which the after-effects are accustomed beneath costs accompanying to claims, benefits, annuities and changes in allowance arrangement liabilities in the Accumulated Banking Statements. In addition, this advance assets includes changes in the fair amount of investments for the Claimed and Business Casework segment, accustomed at fair amount through accumulation or loss.
For the three-month periods
For the nine-month periods
ended
ended
(in millions of dollars)
Sept. 30,2017
June 30,2017
Sept. 30,2016
Sept. 30,2017
Sept. 30,2016
Presentation of assets in the Combined Banking Statements
Net absorption income
$
1,136
$
1,087
$
1,071
$
3,280
$
3,186
Net premiums
$
1,982
$
2,076
$
1,873
$
6,040
$
5,334
Other income
Deposit and acquittal account charges
$
109
$
122
$
128
$
351
$
365
Lending fees and acclaim agenda account revenues
$
154
$
154
$
139
$
480
$
424
Brokerage and advance armamentarium services
$
241
$
307
$
278
$
826
$
824
Management and careful account fees
$
104
$
106
$
94
$
311
$
274
Net assets (loss) on balance at fair value
through accumulation or loss
$
(484)
$
476
$
385
$
293
$
1,775
Net assets on available-for-sale securities
$
65
$
181
$
99
$
326
$
277
Net added advance income
$
57
$
54
$
49
$
165
$
149
Foreign barter income
$
16
$
20
$
20
$
55
$
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58
Other
$
295
$
28
$
(42)
$
349
$
69
Total income
$
3,675
$
4,611
$
4,094
$
12,476
$
12,735
Presentation of assets in the Management's Discussion and Analysis
Net absorption income
$
1,136
$
1,087
$
1,071
$
3,280
$
3,186
Net premiums
$
1,982
$
2,076
$
1,873
$
6,040
$
5,334
Other operating income
Deposit and acquittal account charges
$
109
$
122
$
128
$
351
$
365
Lending fees and acclaim agenda account revenues
$
154
$
154
$
139
$
480
$
424
Brokerage and advance armamentarium services
$
241
$
307
$
278
$
826
$
824
Management and careful account fees
$
104
$
106
$
94
$
311
$
274
Foreign barter income
$
16
$
20
$
20
$
55
$
58
Other
$
295
$
28
$
(42)
$
349
$
69
Operating income
$
4,037
$
3,900
$
3,561
$
11,692
$
10,534
Investment income
Net assets (loss) on balance at fair amount through accumulation or loss
$
(484)
$
476
$
385
$
293
$
1,775
Net assets on available-for-sale securities
$
65
$
181
$
99
$
326
$
277
Net added advance income
$
57
$
54
$
49
$
165
$
149
$
(362)
$
711
$
533
$
784
$
2,201
Total income
$
3,675
$
4,611
$
4,094
$
12,476
$
12,735
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