Desjardins Group has unveiled its financial results for the third quarter of 2023, recording $614 million in surplus earnings before member dividends of $614 million, up from $319 million from the same period last year.
The increase was attributed to the net insurance service income growth and a higher net interest income. Desjardins’ total net income stood at $3,133 million in Q3 2023, a 23.2% increase from $591 million in the same quarter last year.
Net interest income was $1,818 million, a 10.2% increase, mainly due to an increase in the average return on loans due to the higher interest rate environment, as well as to growth in average residential mortgages and business loans outstanding, partly offset by the rise in interest expense on deposits.
Insurance service result of $391 million, up $114 million or 41.2%, due to business growth in net insurance revenue, primarily driven by growth in property and automobile insurance.
Gross non-interest expense was $2,443 million, a 5.4% ($126 million) increase. Of the amount, $117 million was attributed to costs relating to operations acquired from subsidiary firm Worldsource.
The firm’s provision for member dividends stood at $106 million in Q3. This was unchanged from the number reported in the same period from the previous year.
Sponsorships, donations, and scholarships for the third quarter stood at $25 million, compared to $22 million in Q3 2022.
For the first nine months of 2023, Desjardins Group recorded surplus earnings before member dividends of $1,509 million, up $725 million from the same period of 2022.
The rise in surplus earnings was due to a $582 million rise in the net insurance finance result, which had been adversely affected by the significant jump in interest rates in the comparative period of 2022. Growth was also recorded in other income and in net interest income.
This increase in surplus earnings was partly offset by greater spending on personnel and technology compared to the first nine months of 2022, and by a higher loss experience in the P&C insurance segment that was driven by the higher average cost of claims in automobile insurance due to the impact of inflation and an uptick in car thefts. The provision for credit losses also went up.
“Desjardins Group reported excellent financial results for the third quarter of 2023,” said Guy Cormier, president and CEO of Desjardins Group.
“Combined with our robust capitalization levels, financial strength and rigorous risk management, these results allow us to support our members and clients in these more difficult times.”
Desjardins also contributed $250 million to stimulate community social and economic activity through its GoodSpark Fund. The firm issued $500 million in sustainable bonds on the Canadian market last August 2023.
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