Strong profit growth at its retail caisse network delivered strong second quarter results at Levis, Que.-based Desjardins Group.

The financial co-operative said its surplus earnings before member dividends rose to $338 million, up $23 million, or 7.3%, compared to the same quarter in 2007.

The overall results included strong earnings growth at its caisse network, which produced surplus earnings of $179 million, an increase of 29% compared to $139 million in the second quarter of 2007.

Overall, Desjardins Group’s total income was $2.4 billion for the second quarter, an increase of $232 million or 10.5% over the corresponding quarter of 2007.

Desjardins said that the overall profitability of the group was affected by a decline in results at its general insurance subsidiary, which had a loss due to the impact of weather on its home insurance business.

The life and health subsidiary also had a slight decline in profitability.

Income from brokerage, investment fund and trust services declined by $35 million or 19.1%, mainly because of the difficult conditions on capital markets.

However, interest income increased by $43 million, premiums received increased by $48 million and other income, including from an increased valuation on its impaired asset-backed commercial paper, rose compared with last year.