The Desjardins financial co-operative, Quebec’s largest financial institution, said its surplus earnings were stable at $443 million in the third quarter even though it experienced a double-digit drop in revenue.

Desjardins earnings were down 0.4% from $445 million recorded a year ago.

Revenues fell 13.6%, or $507 million, to $3.2 billion, mostly due to low interest rates on bonds that reduced investment income from life and health insurance activities.

Dividends to co-operative members increased to $73 million from $60 million a year ago, while $17 million was distributed in donations, sponsorships and bursaries.

Desjardins’ assets increased five per cent to $199.7 billion.

The co-operative said its caisse network, card services and insurance segments continued to post strong growth allowing it to pursue business development in Quebec and elsewhere in Canada.

“Desjardins Group’s financial performance in the third quarter demonstrates once again how the co-operative model can excel in an increasingly competitive market,” stated CEO Monique Leroux.

“Our efforts to maintain a high level of capitalization continue to pay off and will be sustained. Not only does this contribute to the long-term viability of our financial group, it also allows us to continue carrying out our investment and growth program.”

Despite a 6.8% increase in outstanding loans to $8.4 billion, net interest income decreased slightly to $962 million due to low interest rates and fierce competition in the mortgage lending market.

Net premiums grew 3.6% to $1.28 billion due to business growth in insurance activities, primarily in property and casualty insurance.

Other income fell 35.8% to $979 million from $1.5 billion due to lower investment income, offset by lower claims and other insurance and investment liabilities. The decrease was also due to fluctuations in the fair value of various investment portfolios and hedging positions, as well as growth in credit card activities and commission income on insurance sales.

Expenses related to claims, benefits, annuities and changes in insurance and investment contract liabilities decreased 29% to $1.2 billion due to a decrease in actuarial provisions in the wealth management and life and health insurance segment.

The provision for credit losses decreased 10.7% to $50 million. Gross impaired loans increased $16 million to $536 million but the total ratio of gross impaired loans was steady at 0.41%.

The Tier 1 capital was 16.5%, down from 17.3% a year ago.