Financial cooperative Desjardins Group Monday reported flat earnings for the second quarter as strong business volume growth offset lower interest income.

Desjardins Group said surplus earnings before member dividends were $338 million for the quarter ended June 30, unchanged from the amount posted for the same period of 2008.

Return on equity was 13.4%, compared to 14.3% on a year-over-year basis.

“Results for the quarter benefitted from strong business volume growth and very good investment income growth, despite lower interest rates, which restrained net interest income at the caisses and, at the same time, limited their profitability,” Desjardins Group said in a release.

Assets grew 5.2% to $159.9 billion.

Desjardins Group’s total income was $2,772 million at the end of the second quarter of 2009, for an increase of $320 million or 13.1% compared to the same period of 2008.

Net interest income stood at $828 million for the second quarter of 2009, down $19 million or 2.2% compared to the same quarter last year, due to lower interest rates.

Net premiums grew $60 million or 6.0% as a result of good growth in insurance premiums, particularly in the life and health insurance subsidiary.

Other income stood at $887 million, up $279 million or 45.9% over the same quarter last year. Other income benefitted from strong growth in investment income.

Income from brokerage, investment fund and trust services were also affected by uncertainty in the markets and fell $24 million or 14.7%, a performance similar to the industry as a whole.

Provisions for credit losses eased to $45 million during the quarter, compared to $46 million a year earlier.

Expenses related to claims, benefits, annuities and changes in insurance provisions stood at $980 million, up $203 million or 26.1% compared to the same quarter of 2008. A large part of this growth is explained by an equivalent increase in investment income at the life and health insurance subsidiary.

http://www.newswire.ca/en/releases/archive/August2009/17/c5343.html