Desjardins keen to expand outside Quebec, CEO says
Desjardins Group is looking to acquire insurers, wealth managers and payments firms to expand further outside Quebec and challenge the dominance of Canada’s big financial services firms, CEO Guy Cormier said.
Cormier, who oversees North America’s largest financial co-operative, said he’d consider deals up to $3 billion over the next three to five years, though he’s also interested in pursuing partnerships with other credit unions and coops.
“We’re open for business, open to increase our revenues and focus on these three targets,” Cormier said. “We’ll be really open to any kind of transaction and acquisition, especially in property and casualty insurance.”
Cormier oversees a network of 313 credit unions or caisses in Quebec and Ontario, as well as an operation that includes retail and business banking, insurance, asset management and capital markets. The group serves more than seven million members and clients and employs about 48,000 people.
Desjardins expanded through takeovers under former CEO Monique Leroux, starting with the $443-million purchase of insurer Western Financial Group in 2011. The firm bought 40 per cent of Vancouver-based online brokerage Qtrade Financial Group in 2013, and two years later acquired State Farm Mutual Automobile Insurance Co.’s Canadian property and casualty and life insurance operations, as well as its mutual fund, loan and living benefit companies.
Cormier, who succeeded Leroux in April 2016 after being elected to a four-year term, said his first two years are about “taking a deep breath” on takeovers and focusing on integration. He has already undone part of the Western Financial deal, shedding its pet insurance business to Economical Mutual Insurance Co. in January and a month later agreeing to a $775-million sale of its insurance brokerage network to Wawanesa Mutual Insurance Co.
“Desjardins is still really involved, really focused and really interested in doing business outside Quebec,” Cormier said. “We feel we have the technology, the knowledge, the capital, the money and we’re ready for that.”
Desjardins, with $258.4 billion in assets at the end of December, has a capital strength rivalling North America’s big banks, with a Common Equity Tier 1 ratio of 17.3 per cent.
The Levis, Que.-based entity is the world’s sixth-largest financial co-op by income, according to the World Co-operative Monitor.