The Canadian Press

Desjardins Group plans to continue it’s cautious growth outside its Quebec base after ending 2009 confident that the company has fully overcome the ill effects of the recession.

“By our nature we want to grow, but in a way that is sustainable and profitable and prudent,” president and CEO Monique Leroux said during a conference call Friday.

“We don’t want to take a major risk. We want to do it progressively but surely.”

Quebec’s largest financial services institution has more than $1 billion of loans in the rest of Canada, primarily in Ontario and British Columbia, out of a loans book that totals about $30 billion.

Desjardins is mainly focused on its life and health insurance companies and retail banking through its branches in Ontario and New Brunswick.

Desjardins Securities recently opened offices in Calgary.

It also has a few thousand retailers in B.C. that use its credit card machines for sales transactions.

“It’s a big, huge market and we want to be more present,” said Stephane Archard, senior vice-president business and institutional services.

Desjardins said it reversed last year’s $476-million deficit with $244 million of surplus earnings before member dividends in the fourth quarter as revenues grew 49.4% to $2.58 billion.

Canada’s largest financial co-operative said the strong performance resulted from a significant increase in trading revenue and income on securities sales, and by good results in its health insurance subsidiary and securities operations.

Profitability was hurt by lower interest rates, which put pressure on net interest income funds.

For the full year, its surplus earnings totalled $1.077 billion, up from $78 million in 2008, and just shy of the $1.101 billion earned in 2007.

Revenues totalled $10.67 billion, up 27.4%.

Leroux said stability has returned after last year’s economic upheaval, although Desjardins will remain cautious in the face of a fragile recovery.

“The first two quarters of 2009 were a little bit difficult but when we look at the trend in the third and fourth quarter we are back on track and overall we had a very solid 2009.”

Desjardins said it was being cautious by paying just $311 million of dividends to members in 2009. That’s up nearly 45% from 2008, but not much more than half the $592 million distributed in 2007.

It’s also planning to give $73 million in sponsorships and donations.

“We look at 2010 with cautious optimism because the economic situation remains still fragile, which requires caution and vigilance about the management of our business,” Leroux said.

Return on equity, a key measure in the financial sector, rose 8.6% for the quarter, whereas it was a negative 19.3% a year earlier.

Desjardins had $11.2 billion in capitalization and a tier 1 capital ratio of 15.86% that was about 3.5 percentage points higher than last year and one of the best in the industry.

Assets were $157.2 billion, up 3.2%.

As of year-end, Desjardins had 39.6% of the residential mortgage market in Quebec, as well as 45.3% of the farm credit market and 44.2% of personal savings in the province.