Desjardins has the means to be more generous, a study concludes

Over-centralised, increasingly disconnected from its members, the Mouvement Desjardins would rather sit on its billions than bail out the low-income earners it was created to serve, accuses an in-depth study published this morning.

• Also read: Desjardins reinvests in a French company

• Also read: Wages are rising even faster than inflation in Quebec

“Desjardins was born to fight inequality, not accommodate it,” said Robert Laplante, director general of the Institute for Research in Contemporary Economics (IREC), during a phone interview with The newspaper.

“We would not destabilize the Desjardins portfolio, we would not raze the institution if we showed more solidarity with the poorest,” he adds.

Too careful?

IREC’s four-part study finds that Desjardins’ equity ratio of more than 20% surpasses that of most other major financial cooperatives and North American banks worldwide.

This means Desjardins is keeping more cash in its coffers to deal with potential risks.

“Small consolation”

IREC also notes that Desjardins dedicates very little to its mutual relief funds, which provide microcredit to Quebecers struggling financially to keep them away from rampant lenders.

“If we look at all the assets of the Desjardins group [404 milliards $]use mutual relief funds, which have never lent more than $462,000 a year, to put your mind at ease with crumbs,” says Mr. Laplante.

The sociologist acknowledges that Desjardins gives back to communities more than many companies, notably through the Fonds du Grand Mouvement ($250 million over eight years).

“Of course we can always see Desjardins doing better than the banks, which are doing almost nothing, but that’s very small consolation,” he says. A cooperative must measure its resources against the needs and interests of its members, not those of its competitors. »

Desjardins has long been torn between his social background and his temptation to be a full member of the financial sector.

As the group struggles with a drop in traffic, it has reduced the number of its service centers from 1,122 to 790 from 2015 to 2021, a decrease of 30%.

A certain separation

At the same time, Desjardins’ market shares fell in two important sectors. They fell from 37% to 18% for personal loans (from 2001 to 2020) and from 37% to 22% for business loans (from 2009 to 2020).

“One of the reasons for this relative decline is certainly the weakening of Desjardins’ connection with the living forces of Quebec,” says Robert Laplante.

In summary

  • Desjardins keeps more money in its coffers than other financial institutions
  • Desjardins sets itself apart by allowing its CEO to chair the board
  • The Desjardins Mutual Assistance Fund program has saved very few Quebecers from the clutches of rampant lenders
  • Desjardin’s market share declined in personal and business loans

A cooperative with a deficient democracy

The Institute for Research in Contemporary Economics (IREC) regrets that democracy is only a shadow of what it once was at Desjardins.

This may explain why Guy Cormier was re-elected by acclamation to lead the movement in 2019, despite a massive data theft that exposed security flaws in the institution’s systems.

“We can certainly be surprised that the debate surrounding this tragedy has been weak in the institution,” affirms Robert Laplante, IREC Director-General.

According to him, the abolition of the regional federations of Desjardins about twenty years ago has greatly contributed to the weakening of democracy within the cooperative.

“Where the cooperative difference is felt is precisely in the ability to mobilize members for development goals, and that the authorities are currently allowing this less and less because the centralization of decisions means more to present the local coffers with a fait accompli”, said Mr. Laplante.

The IREC also noted that Desjardins is one of the few financial cooperatives in the world that has not separated the positions of chairman and chief executive officer.

In the absence of an independent President, “there is no convergence between the democratic life of the organization and the reality of corporate governance. In cooperative life, however, it is this creative tension that makes it possible to balance the pressures of the competitive environment,” explains Robert Laplante.


The specialist is no longer vulnerable to the $4.4 million in compensation paid to Mr. Cormier for 2021, a 37% increase.

“We question very seriously whether it is appropriate to give senior executives the adequacy at a time when young people have less and less access to property, and when the most disadvantaged are feeling the effects of inflation that is shaking their standard of living to grant such a large increase. ” he said.

Do you have any information about this story that you would like to share with us?

Do you have a scoop that might be of interest to our readers?

Write to us or call us directly at 1-800-63SCOOP.

Leave a Comment