Desjardins Group recorded combined surplus earnings before member dividends of $248 million in the third quarter ended September 30, down $80 million or 24.4% from the same quarter of 2006.

This decrease was primarily due to a write-down of 8.3% or $160 million ($107 million after taxes) related to non-bank-sponsored asset-backed commercial paper (ABCP) holdings. Excluding this write-down, combined surplus earnings before member dividends would have been $355 million, up more than 8%.

Furthermore, Desjardins Group announced during the quarter that it had entered into a transaction with Canada’s Credit Union Centrals in connection with a strategic partnership. This transaction, together with the Visa Canada Association restructuring, pursuant to which Desjardins will receive shares of Visa Inc. in exchange for its interest in the former corporation’s structure, should generate non-recurring gains in the order of $110 million after taxes. These gains will be recorded in the fourth quarter.

For the third quarter, the caisse network strongly contributed to Desjardins Group’s solid financial performance with financial results up about 15% from the same quarter a year earlier.

As well, the insurance subsidiaries made a much higher contribution to Desjardins Group’s combined results, namely 38.5% for the life and health insurance subsidiary, and 64.3% for the general insurance subsidiary.

The provision for member dividends amounted to $127 million compared to $147 million for the corresponding quarter of 2006, primarily as a result of the adjustment of the accounting provision during the third quarter of 2006.

Net interest income totalled $827 million, up $48 million or 6.2% from the corresponding quarter of 2006, in particular as a result of higher business volume.

Insurance premiums increased by $68 million or 7.7%, while annuity premiums were down by $10 million or 19.6%, resulting in an overall increase of $58 million or 6.5% in net insurance premiums compared to the third quarter of 2006.

Other income was favourably affected by an increase of $20 million or 14.5% in income from brokerage, investment fund and trust services, as well as by an increase of $13 million or 15.7% in lending fees and credit card service revenues.

It should be noted that the effect of these increases in total income was however mitigated by a $221 million decrease in investment income primarily as a result of the accounting changes concerning to the life and health insurance company’s financial instruments and the non-bank-sponsored ABCP holdings.

Overall, Desjardins Group’s total income amounted to $2,253 million for the third quarter of 2007, down $58 million or 2.5% on a year-over-year basis.

The provisions for credit losses charged to income for the third quarter of 2007 were $47 million, compared to $27 million a year earlier.

Return on equity stood at 11.0%, down from 15.8% for the same quarter one year ago.