Desjardins Group posted a 1.5% increase in operating income, to $14.1 billion, for the fiscal year ended December 31, 2016.
Surplus earnings before member dividends were $1.77 billion, down from $1.96 billion in 2015. The difference was primarily due to additional investments in innovative IT platforms, the payment of severance benefits and adjustments to the actuarial assumptions related to life and health insurance operations. In 2015, surplus earnings were enhanced by the gain realized on the acquisition of State Farm’s Canadian operations.
The co-operative financial group reports total assets of $258.4 billion as of December 31, 2016, up $10.2 billion or 4.1% since December 31, 2015. This compares with an annual growth of $18.7 billion or 8.2% recorded one year earlier. Growth in 2016 was largely due to increases in the net loans and acceptances portfolio and in segregated fund net assets.
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Return on equity was 8.0% compared to 9.1% for fiscal 2015. This decline was largely due to the decrease in surplus earnings and the increase in equity.
Income from brokerage and investment fund services stood at $1.11 billion, compared to $1.04 billion in 2015. This growth was primarily due to greater assets under management arising from the sale of various financial products.
Net premiums were $7.17 billion ($6.91 billion in 2015) due to growth in premiums in both life and health insurance and property and casualty insurance.
Wealth management and insurance
Net surplus earnings generated were $461 million, compared to $503 million in 2015. The decline was primarily due to adjustments made to actuarial assumptions in the normal course of business and to higher gains realized on the disposal of investments in 2015. Good performance of investments in 2016 and efficient management of expenditures in a context of business growth were partially offset by a less favourable claims experience.
For the fourth quarter of 2016, surplus earnings were $114 million, compared to $127 million for the fourth quarter of 2015.
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