Lévis, Que.-based Desjardin Group Wednesday reported an increase in surplus earnings for the second quarter (Q2) ended June 30, up $183 million to $629 million, helped by growth in operating earnings and the insurance subsidiaries, including the newly acquire Canadian operations of State Farm.
Operating income for the financial co-operative was $3,438 million in Q2, up $281 million or 8.9% from the same period last year.
Desjardins Group completed the purchase of State Farm Canada’s businesses in property and casualty and life insurance, as well as its Canadian mutual fund, loan and living benefits companies, on Jan. 1.
“I’m very satisfied with these results which reflect strong growth in Canada, particularly in insurance,” says Monique Leroux, president and CEO of Desjardins Group, in a statement.
The growth in surplus earnings has given Desjardins an 11.4% return on equity for Q2 compared to 9.9% one year earlier.
Desjardins Group had total assets of $250.9 billion at the end of Q2, up $21.5 billion or 9.4% from Dec. 31, 2014. This growth was largely due to the assets acquired from State Farm’s Canadian operations, loan portfolios and securities, the co-operative says.
Surplus earnings in the personal services and business and institutional services segment, including the Caisse network’s contribution, were $239 million in Q2, up $28 million from the same period of 2014. The increase was due in part to business growth, including sales of financial products, which drove up income, Desjardins Group says.
Surplus earnings for the wealth management and life and health insurance segment were $195 million in Q2, up $61 million from the same period in 2014. Thw increase was largely due to life and health insurance operations including the newly acquired State Farm business in Canada.
The property and casualty Insurance segment recorded surplus earnings of $194 million, up $133 million compared to the second quarter of 2014. This increase was also primarily due to the contribution of State Farm’s Canadian operations, which benefited from a particularly favourable environment in the second quarter, says Desjardins Group, and an improved claims experience in property insurance compared to the same period of 2014.