At the conclusion of the fiscal year ended December 31, 2005, Desjardins Financial Security, the life and health insurance arm of Desjardins Group, had record earnings of $159.7M, with continuing operations providing $154.4M of that amount. This represents a 22.7% increase over results at this time last year ($130.2M). Certain non- recurring items, such as the sale of the Company's Imperial Life division in the Bahamas and the settlement of several major non-performing loans, had a favourable impact on the year's results. Desjardins Financial Security also benefited from the fact that a $275M debenture, issued on December 30, 2004, did not bear interest in 2005. This debenture was converted into preferred shares on December 31, 2005.

Insurance and annuity premium income grew by 10.1%, increasing from $2.1B to $2.3B. Assets under management rose 15.3% over the past 12 months, exceeding $17.2B at December 31, 2005.

Operating income stood at $184.9M. Without the impact of an actuarial expense in 2005 for future income tax discounting and a positive non-recurring item associated with the value of an investment recognized in 2004, the Company's operating income would have totalled $202.9M, compared to $178.0M in 2004. This 14% increase is due mainly to good claims experience and investment performance.

Desjardins Financial Security therefore continues to contribute to the profitability of Desjardins Group, the largest integrated cooperative financial group in Canada. In 2005, Desjardins Group declared combined surplus earnings before patronage dividends of $1,089M, $17.0M more than last year. Desjardins Financial Security's share of the profits attributable to the ultimate shareholders, the Desjardins caisses, totalled $151.6M, for a $24.1M or 18.9% improvement over 2004. In terms of shareholder equity, at 24.9% ours remains one of the best in the industry.

Mr. Alban d'Amours, President and Chief Executive Officer of Desjardins Group and also Chief Executive Officer of Desjardins Financial Security, was very satisfied with these results as they reflect the life and health insurer's vitality. "By using its inherent competitive advantages, such as the integration of its offer into Desjardins caisse business, the diversity of its distribution channels, and its evolving array of products and services, particularly in health insurance, to fuel its business development, Desjardins Financial Security remains in a position to meet the expectations and needs of its various clienteles. This explains why the Company has performed so well over the past few years."

President and Chief Operating Officer of Desjardins Financial Security, Mr. François Joly indicated that "it's in 2005, in light of each business line's results, that we can truly measure the progress we have made over the last few years. Despite the context of consolidation in the financial services industry, our net earnings have grown by 101.6% over the past three years and we have more than doubled our return on shareholder equity. These results clearly reflect our Company's vitality and strengthen our capacity to consolidate our growth in a highly competitive environment."

Performance by activity sector

Group Insurance

In Group Insurance, Desjardins Financial Security maintained its momentum, imposing itself more and more as a major player in the Canadian market, where we now occupy fourth place in group life and health insurance. Between 2000 and 2004, our market shares have grown steadily and we have recorded an average annual growth rate of in-force business of 16.6%, compared to 8.9% for the entire Group and Business Insurance industry. In this sector, the Company is ranked 2nd among insurers in Quebec and continues to expand its presence across Canada. We also signed a partnership agreement with the MAXIS network, an international group of insurers present in over 65 countries. This agreement makes Desjardins Financial Security the exclusive Canadian representative in this worldwide network.

Results - Net earnings for the Group Insurance business line, which includes group and business insurance plans, and group plans offered in financial institutions like Desjardins Group, totalled $102.5M. Group and Business Insurance sales stood at $95.2M. Premium volume was $1,542.9M, up $110.9M or 7.7% over the previous year. This performance is mainly attributable to the natural growth in the groups already in place and a higher persistency rate. Elsewhere, taking advantage of the life and health insurance industry's widespread consolidation, Desjardins Financial Security continued to gain ground outside Quebec in 2005, realizing sales of $65.7M, for a 28% improvement over 2004. Premiums generated by plans offered by financial institutions, and more specifically Credit Insurance, were 6.8% higher and totalled $423.1M, thus allowing the Company to strengthen its leadership position in Credit Insurance in Quebec and its second place ranking in Canada.

Individual Insurance

In Individual Insurance, Desjardins Financial Security managed to stay the course and record in-force premium growth in 2005. To increase its presence and market share in Individual Insurance, especially outside Quebec, the Company accelerated its development across Canada and increased its sales force by signing agreements that opened four new LFS Laurentian Financial Services centres in Ontario, Alberta and British Columbia. In tandem with the expansion of our distribution network, we continued to differentiate ourselves by constantly improving our offer of health insurance, a high-potential niche, in which we continue to lead the way.

Results - In Individual Insurance net earnings grew by a significant 128.7% to stand at $40.3M, compared to $18.8M in 2004. Very good claims experience and favourable net investment income, some of which was non- recurring, are responsible for these excellent results. Sales totalled $33.8M, a level comparable to 2004. Net premiums increased slightly to stand at $362.4M. This increase is due mainly to strong growth in premiums for insurance products sold to caisse members via Desjardins Financial Security member services representatives, which amounted to close to $40M. In operation since 2000, this distribution channel, whose sales were up 5.3% and stood at $13.8M in 2005, had over 75,000 in-force contracts covering over 125,000 insureds. Approximately 40% of those contracts were issued to individuals with no previous insurance coverage.

Savings

In Group Savings, in addition to enhancing its offer with new funds, the Company made inroads into the consulting actuarial market and strengthened its business development team with the addition of seasoned advisors, particularly outside Quebec. Desjardins Financial Security can now serve its clients and partners more effectively across the country by facilitating access to its group retirement savings solutions. We also redesigned our integrated Setting Sail for the Future retirement education and planning program for group plan participants. In Individual Savings, Desjardins Financial Security added two new funds to its Millennia III family of segregated funds, the Bissett Canadian Balanced Fund and the Jarislowsky Fraser Canadian Equity Fund, allowing investors to place their money with reputable managers who can protect them against market fluctuations.

Results - The Savings sector posted good results in 2005. Net earnings stood at $8.9M, compared to $5.1M in 2004, while sales totalled $552.7M, for a $144.9M or 35.5% increase over 2004. In Individual Savings, net earnings surpassed 2004 figures by 221.0%, while sales totalled $236.6M, a level comparable to a year ago. Sales of Millennia III segregated funds reached close to $100.0M, up 32.1%. In Group Retirement Savings, total realized sales, including group annuity and investment fund sales, amounted to $316.1M, an 84.5% jump, due in part to the signing of large single premium contracts with major groups. With respect to accumulation products, the redesign of our offer initiated in 2004 and the growing presence of our sales team among consulting actuarial firms boosted business volume, with sales reaching $105.1M, for a $39.4M improvement over 2004.

About Desjardins Financial Security

Desjardins Financial Security, a subsidiary of Desjardins Group, the largest integrated cooperative financial group in Canada, specializes in life and health insurance, as well as savings products and services. Every day, over 5 million Canadians rely on Desjardins Financial Security to ensure their financial security. The Company, which employs 3,659 people and has over $17 billion in assets under management, has offices in several cities across Canada, including Vancouver, Calgary, Winnipeg, Toronto, Ottawa, Montreal, Quebec, Levis and Halifax.

For further information: Shannon Bowness, External Communications Advisor, Desjardins Financial Security, (416) 926-2700 ext. 2015, shannon.bowness@dfs.ca; Claude Beauchamp, External Communications Advisor, (418) 838-7800 or toll free at 1-800-463-7870, extension 7797, claude.beauchamp@dfs.ca, Virtual pressroom: http://www.desjardinsfinancialsecurity.com/press

Source: newswire