Despite a difficult fiscal year for Quebecers, Desjardins Group managed to significantly increase its sales and surpluses in 2023, thereby significantly improving its member dividends.
• Also read: Service center closures: Desjardins needs to support seniors, organization says
The financial institution generated surpluses before rebates of $2.26 billion, an increase of $209 million, or 9.25%, compared to the $2.05 billion for fiscal year 2022, the prior the entry into force of the latest accounting standards were published.
Desjardins Group President and CEO Guy Cormier couldn't have seemed happier as he presented these latest results on Wednesday. He described these as “solid,” adding that they allowed the cooperative movement to “properly support.” [ses] Members and customers during this most difficult time.”
Discounts and rebates
For the year ended December 31, 2023, reserves for member dividends were $412 million, an increase of $9 million, or just 2.18%, compared to the prior year. Discounts in the form of sponsorships, donations and scholarships amounted to $126 million. This represents growth of 3.9% compared to $115 million in fiscal 2022.
Guy Cormier claims that these increased results are mainly due to a 21.6% increase in the institution's net income, or $2.24 billion, since last year. Revenue was $12.58 billion in 2023.
This revenue growth could be partly explained by the increase in interest income (+11.1%), better results from the insurance business (+29%) and new revenues related to the activities acquired from Worldsource.
Signs of slowing down
However, this increase is mitigated by the higher allocation to the loan loss provision compared to 2022. These have practically doubled in a year, from $277 million to $529 million in 2023, largely due to the increase in provisions for corporate loan portfolios, confirmed Réal Bellemarre, senior executive vice-president and chief operating Officer Desjardins.
The main culprits for the increase in payment defaults observed by Desjardins are companies from the catering, accommodation and real estate sectors.
Less switches, more IT
The indexation of salaries and the increase in technology-related costs would also have placed a greater burden on Desjardins' expenses.
A large part of the savings generated by the program to reduce the number of counters across Quebec will go towards improving or developing new digital tools, explained Mr. Cormier.
Because of the natural attrition of employees, particularly due to retirement, these closures did not actually result in layoffs, he added.
In 2023, the number of Desjardins customers increased by 86,000 members and 12,000 companies. Total assets rose 4.7% to $422.9 billion.
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