Results for the first quarter of 2024  LÉVIS, QC, May 10, 2024 /CNW/ - For the first quarter ended March 31, 2024, Desjardins Group, North America's largest financial cooperative group, recorded surplus earnings before member dividends of $855 million, up $513 million from the same quarter of 2023. All business segments contributed to these outstanding results, including higher insurance revenue, lower incurred claims in Property and Casualty Insurance, and an increase in the net insurance finance result due to favourable trends in financial markets. Of particular note is the Personal and Business Services segment's strong performance, driven by growth in net interest income related primarily to business growth and a reduction in non-interest expense due to rigorous expenditure management. For the first quarter of 2024, the provision for member dividends stood at $110 million, an increase of $4 million or 3.8%, compared to the corresponding period of 2023. Sponsorships, donations and scholarships amounted to $27 million, of which $11 million came from caisse Community Development Funds. "For the first quarter of 2024, Desjardins posted outstanding financial results, due to strong performance by all our business segments," said Guy Cormier, President and Chief Executive Officer of Desjardins Group. "I'm proud of our results and the hard work put in by everyone across our organization. Our financial solidity allows us to proactively meet the needs of members, clients and communities. Moreover, Desjardins presents capital ratios and credit ratings that are among the best in the industry." Supporting a green economic and social recovery Desjardins is contributing to regional development and the economy through the GoodSpark Fund, which has set aside $250 million to stimulate social and economic activity in communities. Since 2017, Desjardins Group has committed a total of $187 million to 833 projects related to the GoodSpark Fund. Last March, Desjardins Group released its Social and Cooperative Responsibility Report and its 2023 Climate Action at Desjardins Report. The cooperative produces these documents to report on its progress in integrating environmental, social and governance (ESG) criteria into its business model and operations, and on how it is increasingly taking the risks and opportunities associated with climate change into account. In particular, Desjardins is still working to implement the climate goal announced in 2021. The goal is to achieve, by 2040, net zero emissions in its operations, its supply chain, its lending activities and its own capital investments in three key carbon-intensive sectors: energy, transportation and real estate. Governance At the annual general meeting (AGM) of the Federation on March 24 and 25, 2023, delegates from Desjardins caisses in Québec and Desjardins Ontario Credit Union voted to separate the roles of chair of the board of directors from the role of president and CEO of Desjardins Group, positions which had been held for almost 30 years. The separation of these roles came into effect on March 23, at the end of the 2024 AGM. This marked the beginning of the shift to a new governance model. To this end, Guy Cormier became president and CEO under the new model. In addition, the board of directors will elect a new Chair in May 2024. Doing what's best for members and clients Desjardins is involved in people's lives, whether by supporting community initiatives related to diversity, inclusion, cooperation, financial literacy and healthy living, or by offering innovative financial solutions to meet their needs. Here are some of the ways that Desjardins made a positive difference in people's lives in the first quarter of 2024. Giving back to the community Desjardins Group was once again recognized as one of Canada's best employers, earning several major awards. Forbes magazine and Mediacorp ranked Desjardins as one of Canada's Best Employers in the banking and finance industry in 2024. In addition, Desjardins Group is once again one of the country's greenest employers according to Mediacorp's ranking. Renewal of a partnership with La Ruche (in French only) to support local entrepreneurs, organizations and citizens and advance promising projects that stimulate the economy and vitality of Quebec and its regions through crowdfunding. Desjardins earned an MSCI ESG (in French only) of AAA. This is the highest possible rating from MSCI, which is internationally recognized in ESG. This places Desjardins among the top 5% of financial institutions in the world in terms of ESG. Innovating On March 27, 2024, Desjardins Group, through its subsidiary Desjardins General Insurance Group Inc., announced that it had entered into definitive agreements to acquire all of the issued and outstanding shares of The Insurance Company of Prince Edward Island. This acquisition will help diversify its insurance offer and better meet the needs of businesses. Desjardins received five awards at the annual Fundata Canada Inc. FundGrade A+® Awards ceremony for sustained performance in 2023. The FundGrade A+® Awards celebrate Canadian funds that posted the best risk-adjusted returns and maintained high FundGrade scores throughout an entire calendar year. Financial highlights Comparison of first quarter 2024 with first quarter 2023: Surplus earnings before member dividends of $855 million, up $513 million. Total net income of $3,564 million, up $897 million or 33.6%: Net interest income of $1,733 million, up $192 million or 12.5%, due to growth in average outstanding business and residential mortgage loans. Insurance service result of $409 million, up $300 million due to increased insurance revenue and decreased expenses related to claims, mainly in the Property and Casualty Insurance segment. Net insurance finance result of $310 million, up $187 million, due to favourable trends in financial markets. Other income of $1,112 million, up $218 million or 24.4%, mainly due to the increase in revenues related to the activities acquired from Worldsource(1) of $119 million, as well as the increase in revenues from growth in assets under administration and assets under management. Provision for credit losses of $133 million, an increase of $28 million compared to the corresponding period of 2023. Gross non-interest expense of $2,556 million, up $211 million, compared to the first quarter of 2023, of which $120 million was due to expenses related to the activities acquired from Worldsource.(1) The measures rolled out to improve efficiency and effectiveness, including reduced fees, made it possible to limit the increase in other items included under this heading to $91 million, or 3.9%. $137 million returned to members and the community(2) including a provision for member dividends of $110 million and sponsorships, donations and scholarships of $27 million, up $5 million or 3.8% from the corresponding period of 2023. Other highlights: Tier 1A capital ratio(3) of 21.0%, compared to 20.4% as at December 31, 2023. Total capital ratio(3) of 22.0%, compared to 21.9% as at December 31, 2023. Total assets grew 3.0% since December 31, 2023, for a total of $435.8 billion as at March 31, 2024. Multi-currency medium-term note program, subject to the bail-in regime: Issuance of €1.0 billion on January 17, 2024. Issuance of US$1.0 billion on January 26, 2024. Legislative covered bond program: Issuance of GBP 750 million on April 12, 2024. Issuance of 440 million Swiss francs on April 18, 2024. In March 2024, Moody's rating agency confirmed the ratings of the instruments issued by the Fédération des caisses Desjardins du Québec, while maintaining the outlook at "stable". This assessment reflects, among other things, the strong capitalization of Desjardins Group. _____________________________________ (1) On March 1, 2023, through Worldsource Group of Companies Inc. (formerly 9479-5176 Québec Inc.), a wholly-owned indirect subsidiary of the Federation, Desjardins Group acquired, among others, all the outstanding shares of IDC Worldsource Insurance Network Inc., Worldsource Financial Management Inc. and Worldsource Securities Inc. (collectively designated as "Worldsource").  (2) For additional information on supplementary financial measures, see "Non-GAAP Financial Measures and Other Financial Measures" on this page. (3) In accordance with the Capital Adequacy Guideline for financial services cooperatives issued by the Autorité des marchés financiers (AMF). Non-GAAP financial measures and other financial measures To measure its performance, Desjardins Group uses different GAAP (IFRS) financial measures and various other financial measures, some of which are non-GAAP financial measures. Regulation 52-112 respecting Non-GAAP and Other Financial Measures Disclosure (Regulation 52-112) provides guidance to issuers disclosing specified financial measures, including the following measures used by Desjardins Group: A non-GAAP financial measure; Supplementary financial measures. Non-GAAP financial measure The non-GAAP financial measure used by Desjardins Group in this press release, and which does not have a standardized definition, is not directly comparable to similar measures used by other companies, and may not be directly comparable to any GAAP measure. It is defined as follows: Return to members and the community As a cooperative financial group contributing to the development of communities, Desjardins Group gives its members and clients the support they need to be financially empowered. The amounts returned to members and the community, a non-GAAP financial measure, are used to present the overall amount returned to the community and are composed of member dividends, as well as sponsorships, donations and scholarships. More detailed information about the amounts returned to members and the community may be found in the "Financial Highlights" table on the following page. Supplementary financial measures In accordance with Regulation 52-112, supplementary financial measures are used to show historical or expected future financial performance, financial position or cash flows. In addition, these measures are not disclosed in the financial statements. Desjardins Group uses certain supplementary financial measures, and their composition is presented in the Glossary on pages 49 to 56 of the MD&A for the first quarter of 2024. FINANCIAL HIGHLIGHTS