With the release of its financial results for the third quarter of 2023, Desjardins Group revealed a surplus of $614 million before member dividends, an increase over the $319 million surplus recorded at the same time in 2022.
There was a rise in both net insurance service income and net interest income, both of which contributed to the overall rise. Net income for Desjardins was $3,133,000,000 in the third quarter of 2023, up from $591,000,000 in the third quarter of 2022, an increase of 23.2%.
Third quarter results for Desjardins Group
Due to higher interest rates, the average return on loans went up, and the average balances of residential mortgages and business loans also went up. These factors more than balanced out the rise in interest costs on deposits, which caused net interest income to rise by 10.2% to $1,818 million.
There was an increase of $114 million, or 41.2%, in insurance service earnings, all thanks to rising net insurance revenue across the board, but especially in property and vehicle insurance.
The total amount spent on things other than interest was $2,443,000,000, up 5.4% (or $126,000,000,000). Of that sum, $117 million was allocated to cover expenses associated with acquiring the Worldsource subsidiary’s operations.
The company’s dividend provision for shareholders was $106 million in the third quarter. There was no change from the same time period in the prior year.
In comparison to the third quarter of 2022, when sponsorships, gifts, and scholarships were $22 million, this quarter’s total was $25 million.
How did Desjardins Group fare in the first nine months of 2023?
For the first nine months of 2023, Desjardins Group achieved surplus earnings before member distributions of $1,509 million, up $725 million from the same period of 2022.
The significant increase in interest rates in the comparison year of 2022 had a negative impact on the net insurance finance result, which increased by $582 million. In addition to the increase in net interest income, other income also saw expansion.
Higher spending on staff and technology compared to the first nine months of 2022, as well as higher losses in the P&C insurance segment, partially offset this increase in surplus earnings. Higher average auto insurance claim costs as a result of inflation and an increase in car thefts were to blame for these losses. Additionally, the allowance for credit losses increased.
Guy Cormier, president and chief executive officer of Desjardins Group, stated that during the third quarter of 2023, “Desjardins Group reported excellent financial results.”
As a consequence of “robust capitalization levels, financial strength, and rigorous risk management,” the company is able to help its members and customers during the current economic downturn.
In addition, Desjardins gave $250 million from its GoodSpark Fund to encourage local business and social action. In August 2023, the company issued $500 million worth of sustainable bonds on the Canadian market.
