Desjardins Group posted a $476 million loss in the fourth quarter, before member dividends, because of writedowns of its asset-backed commercial paper holdings (ABCP) and investment losses, the group said Monday.

Excluding the specific items, the Quebec-based financial co-operative would have earned $294 million in the quarter ended Dec. 31, an increase of 11.8% from 2007.

Surplus earnings for the full year dropped to $78 million following $1.17 billion after-tax writedowns. Adjusted earnings would have increased 4.3% to $1.2 billion.

Assets grew 5.7% to $152.3 billion, during the full year.

However, its declining financial performance caused the institution to reduce its member dividends to $215 million from $592 million in 2007.

“Desjardins Group’s overall financial results were negatively affected by specific items related to the write-down of non-bank asset-backed commercial paper and the sharp drop experienced in stock markets in the last quarter of 2008,” said Monique Leroux, president and CEO of Desjardins Group.

The group’s writedown for ABCP increased to 41% from 30% as of Sept. 30.

The total direct and indirect impact of ABCP and some structured guaranteed capital products was $1.1 billion for the year ($831 million after tax).

Desjardin is a financial co-operative with 5.8 million members and clients.