Financial results for the second quarter of 2025LÉVIS, QC, Aug. 12, 2025 /CNW/ - For the second quarter ended June 30, 2025, Desjardins Group, North America's largest financial cooperative group, recorded surplus earnings before member dividends of $900 million, compared to $918 million for the comparable period of 2024. This decrease in surplus earnings was primarily due to an increase in the provision for credit losses, due in particular to unfavourable developments in the economic outlook, related to the potential impact of trade disruptions. However, the Personal and Business Services segment benefited from higher net interest income, mainly tied to growth in the loan portfolio, which, among other things, allowed the Group to surpass $500 billion in assets. To support this sustained growth, Desjardins Group expanded its presence on international financing markets by issuing subordinated debt in Swiss francs and yen. Lastly, it should be noted that non-interest expense increased due to investments aimed at supporting business growth and enhancing the services offered to members and clients.For the second quarter of 2025, the provision for member dividends totalled $113 million, up $3 million from the comparable period of 2024. Sponsorships, donations and scholarships amounted to $34 million, of which $17 million came from the caisses' Community Development Fund.For the first six months ended June 30, 2025, Desjardins Group recorded surplus earnings before dividends of $1,638 million, down $135 million from the same period of 2024. This decrease in surplus earnings was primarily due to the results of the Property and Casualty Insurance segment, which were affected by higher claims expenses as a result of increases in both the frequency and the average cost of claims. There was also an increase in the provision for credit losses, due in particular to unfavourable developments in the economic outlook related to the potential impact of trade disruptions. However, the Personal and Business Services segment benefited from an increase in net interest income, related primarily to business growth. Lastly, we would like to point out that the increase in non-interest expense stemmed from investments aimed at supporting growth in operations and enhancing the services offered to members and clients."This year, in the 125th anniversary year of its founding, Desjardins has surpassed $500 billion in assets, demonstrating its ambition and how it has stayed close to members and clients," said Guy Cormier, President and CEO of Desjardins Group. "Desjardins continues to deliver remarkable performance. These results demonstrate the financial solidity of our cooperative model, as well as the unwavering commitment of our teams to supporting our members and clients. I wish my successor, Denis Dubois, the very best for continued growth and development of Desjardins Group."Desjardins Group announces the appointment of its new President and CEOOn June 2, the Board of Directors announced the appointment of Denis Dubois as the next President and CEO of Desjardins Group, effective September 2, 2025. He will succeed Guy Cormier, who has held this position since March 2016. Mr. Cormier will ensure a seamless transition in leadership, supporting Denis Dubois and the Board of Directors as a strategic advisor from September 2, 2025, to March 2026.Affordable housing: concrete solutions for thousands of householdsThrough an innovative partnership with the Québec government, the Desjardins Affordable Housing Initiative, launched in 2022, continues to demonstrate its commitment to fighting the housing crisis. After surpassing its initial goal of 1,000 affordable housing units, Desjardins is taking another major step forward with a second agreement, this time in collaboration with the Québec and Canadian governments. The new agreement will enable the creation of 1,000 additional housing units, bringing the total number of affordable units made available across 14 regions of Québec to more than 3,000 by 2028.As of June 30, 2025, 1,373 units were already in operation and 894 more were under construction, particularly in the Beauce, Montérégie, Outaouais and Charlevoix (in French only) regions. These achievements confirm the key role Desjardins is playing in the development of sustainable and inclusive.Desjardins makes investing easier with a revamped offering and a 100% Québec fundSimplified fund lineupIn an unrelenting effort to meet the changing requirements of its members and clients, Desjardins Investments Inc., as manager of Desjardins Funds, has significantly simplified its mutual fund offering. This initiative aims to provide a simpler, more accessible and advantageous investment experience, while promoting financial empowerment.100% Québec fundLast June, Desjardins Investment Inc., acting as an exchange-traded funds (ETF) manager, launched the Desjardins Québec Equity ETF. This new ETF allows investors to support publicly traded Québec companies and is part of the company's commitment to supporting the local economy.Unique program to support social economy projects in QuébecDesjardins is opening a new chapter in its support for the social economy. In partnership with Sillons (in French only), a non-profit organization that aspires to scale up social innovations, a unique program is being launched to support up to six promising projects over a 24-month period. By combining Sillons's on-the-ground expertise and Desjardins's impact in the community, this partnership meets a need that was strongly expressed at the last Sommet de l'économie sociale (in French only).Desjardins takes action for a fair and sustainable transitionDesjardins is continuing its efforts toward a fair and sustainable transition, as evidenced by its 2024 ESG disclosures, published in May 2025. The document outlines the Group's commitments to environmental, social and governance (ESG) factors. During this period, Desjardins reached the $2 billion mark in investment in renewable energy infrastructure, issued its first green bond on the European market, and actively supported equity, diversity and inclusion.Financial highlightsComparison of second quarter 2025 with second quarter 2024:Surplus earnings before member dividends of $900 million, down $18 million.Total net revenue of $4,091 million, up $338 million, or 9.0%:Net interest income of $2,024 million, up $163 million, or 8.8%, mainly due to growth in average residential mortgages and business loans outstanding.Insurance service result of $593 million, down $27 million, or 4.4%, due to increased claims expenses in the Property and Casualty Insurance segment.Net insurance finance result of $312 million, up $75 million, or 31.6%, due to favourable developments in the financial markets, particularly in equities markets.Other income of $1,162 million, up $127 million, or 12.3%, related to growth in assets under management and assets under administration.Provision for credit losses of $203 million, compared to $87 million for the comparable period in 2024. The provision for the second quarter of 2025 reflects an unfavourable migration in credit quality, an increase in volume and an unfavourable impact related to the updated economic outlook, mainly due to trade disruptions, affecting the business loan portfolios.Gross non-interest expense of $2,950 million, up $253 million, or 9.4%, compared to the second quarter of 2024 due to increased spending on personnel, fees and technology to support growth in operations and to enhance the services offered to members and clients.$147 million returned to members and the community,(1) up $4 million, or 2.8%.________________________________(1)For additional information on financial measures that are not based on GAAP, see "Non-GAAP Financial Measures and Other Financial Measures" on the following page.Other highlights:Tier 1A capital ratio(2) of 22.9%, compared to 22.2% as at December 31, 2024.Total capital ratio(2) of 25.5%, compared to 24.2% as at December 31, 2024.Total assets grew 6.4% since December 31, 2024, to $501.3 billion as at June 30, 2025.Several securities issues were completed during the second quarter of 2025, including under the legislative covered bond program and the multi-currency medium-term note program. All of these transactions made it possible to adequately meet the liquidity needs of Desjardins Group and diversify its sources of financing. For further details, please refer to the Management's Discussion and Analysis for the second quarter of 2025 on page 46.In June and July 2025, the Fitch and DBRS rating agencies, respectively, affirmed the ratings of instruments issued by the Fédération des caisses Desjardins du Québec while maintaining the outlook at ''stable."Comparison of the first half 2025 with first half 2024:Surplus earnings before member dividends of $1,638 million, down $135 million.Total net revenue of $7,773 million, up $456 million, or 6.2%:Net interest income of $3,991 million, up $397 million, or 11.0%, mainly due to growth in average residential mortgages and business loans outstanding.Insurance service result of $883 million, down $146 million, or 14.2%, due to higher claims expenses in the Property and Casualty Insurance segment.Net insurance finance result of $486 million, down $61 million, or 11.2%, mainly due to developments in the financial markets.Other income of $2,413 million, up $266 million, or 12.4%, due in particular to growth in assets under management and under administration.Provision for credit losses of $413 million, compared to $220 million for the comparable period of 2024. The provision for the first six months of 2025 reflects an unfavourable migration in credit quality, an increase in volume and an unfavourable impact related to an update of the economic outlook, mainly due to trade disruptions, affecting business loan portfolios.Gross non-interest expense of $5,686 million, up $433 million, or 8.2%, compared to the first six months of 2024, due to increased spending on personnel, fees and technology to support growth in operations and enhance the services offered to members and clients.$286 million returned to members and the community,(1) up $6 million, or 2.1%._________________________________________(2)In accordance with the Capital Adequacy Guideline for financial services cooperatives issued by the Autorité des marchés financiers (AMF).(1) For additional information on financial measures that are not based on GAAP, see "Non-GAAP Financial Measures and Other Financial Measures" on this page.Non-GAAP financial measures and other financial measuresTo measure its performance, Desjardins Group uses various financial measures under Canadian generally accepted accounting principles (GAAP) (International Financial Reporting Standards (IFRS)) as well as 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 measureThe 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 communityAs 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 amount returned to members and the community, a non-GAAP financial measure, is used to present the overall amount returned to the community and is 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 measuresIn 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 52 to 59 of the MD&A for the second quarter of 2025.FINANCIAL HIGHLIGHTSFull story available on Benzinga.com
Desjardins posts surplus earnings of $900 million for the second quarter of 2025 and surpasses $500 billion in assets
