QUEBEC, Canada - One of Canada's first credit unions, named for one of the founders of the credit union movement, Desjardins Group, is looking to expand its business outside Quebec by opening a brokerage unit in Toronto and to sell insurance in Ontario if legislative approval is granted. Some provinces have granted the right to sell insurance to credit unions. In Ontario, legislation is pending. It has already contracted with CGI, an information technology firm, to offer technology services and financial products to other Canadian credit unions. Desjardins reported only a small profit increase in 2005, although earnings prior to the payment of dividends increased from CND$17 (US$14.6) million to CND$1.1 (US$ 948 million) billion. Canadian credit unions pay taxes and report earnings. Return on equity at Desjardins dropped from 15.8% to 14.5%. At the same time, member dividends increased to $408 million up 9.7%. Total assets were CND$118.1 billion. The profit drop was attributed to interest rates falling, although its mortgage portfolio did increase by 9.5%. Desjardins is the largest mortgage lender in the Quebec province. The expansion of products and services into other areas in Canada is targeted to increase profits for 2006. Desjardins states that it has no plans to change from a co-operative financial institution. Its Web site says it wants "to showcase all of the aspects that make it a truly different kind of financial institution."
Dejardins Credit Union to Expand Services
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