Desjardins Financial Security today reported a 22% rise in third quarter earnings as the firm’s expansion outside of the Quebec market continues to bear fruit.

For the quarter ended September 30, net earnings stood at $48.2 million compared with $39.5 million for the period one year ago.

Income from insurance premiums during the third quarter reached $595.1 million, up 12.7%.

At the end of the first three quarters of 2007, net earnings for the provider of life and health insurance and retirement savings products had risen by 53.2%, to stand at $166.4 million, compared to $108.6 million as at September 30, 2006.

After nine months, gross insurance premium income was up 6.8% in Quebec and 26.0% in the other Canadian provinces, for a total $1,801.4 million and an increase of $193.8 million (12.1%) over 2006. New insurance sales stood at $240.4 million, an increase of $41.4 million over the first three quarters of 2006.

DFS said the results are in part attributable to the major group insurance contracts sold in Ontario, Newfoundland and Labrador and Quebec, including the $75,000 contract signed in the second quarter of the year with the Ontario Hospital Association for the benefit of the 70,000 employees of the Ontario health network’s 185 employers that took effect on August 1.

DFS said Profitability during the period was affected by the sub-prime mortgage problems worldwide, which triggered a liquidity crisis on the asset-backed commercial paper (ABCP) market. Desjardins Financial Security, whose security holdings had a total value of $195.3 million on September 30, recorded a decline in value of $14.9 million. This depreciation, which resulted in a $7.9 million drop in net income for the Company for the first nine months of 2007, had already been included in the third quarter results of Desjardins Group, which were made public on November 15.

The share of Desjardins Financial Security’s net earnings attributable to the Desjardins caisses, the Company’s ultimate shareholders, was up $50.9 million and stood at $157.8 million. Return on shareholder equity was 27.3% versus 20.2% after the first three quarters of 2006.

Assets under management and administration totalled $22.3 billion, up more than 12% since the beginning of the year.

Commenting on these results, Alban D’Amours, president and CEO of Desjardins Group, and also CEO of DFS, stated “These excellent results reflect Desjardins Financial Security’s robust expansion, especially outside Quebec, where it ranks as one of the top life and health insurers. Through these consistent performances, Desjardins Financial Security contributes to the profitability of Desjardins Group and supports its expansion across Canada.”

DFS specializes in individual and group life and health insurance, as well as retirement savings products and services.