Desjardins 2006 Q2 results show decrease

Desjardins Financial Security posted a net income of CD$69.2 million for 2006 Q2, compared with CD$74.2 million for continuing operations in 2005, when results benefited from a reversal of allowance for impaired loans.

In 2006 Q2, the net income was CD$38.7 million, compared with CD$42.4 million in 2005 – a drop of CD$3.7 million over the same period last year.

The Quebec-based insurer says the poor experience in long-term disability during 2006 Q1 continues to affect the year’s results.

Insurance sales totaled CD$175.9 million – up CD$98.3 million over 2005 Q2.

Desjardins says the acquisition of new major contracts, including one with the Newfoundland and Labrador government, for its 36,000 employees and retirees, explains the 126.7% increase over last year. Insurance and annuities income, investment income and other income represent approximately CD$1.6 billion compared with approximately CD$1.5 billion in 2005 – up 8.1%.

Desjardins also reports an ROE of 19.4%.

Franois Joly, Desjardins’ president and chief operating officer, emphasized the company’s solid growth – particularly outside Quebec, where the company is aiming to double its market share.

“The signing of major group insurance and retirement savings contracts in the past few months has helped strengthen our penetration into the Canadian market,” Joly says. “Also, the recent acquisition of the Performa Financial Group will reinforce our capacity for product and service distribution, and thus help reach our objectives for development outside Quebec, which will allow us to strengthen our position among the key financial service providers in Canada.”