A look back at Monique F. Leroux s term as President of Desjardins Group First term On March 15, 2008, Monique F. Leroux was elected Chair of the Board, President and CEO of Desjardins Group, becoming the first woman to occupy this prominent position. She began her term with the theme Living Desjardins with trust and confidence the power to discuss, the power to decide and the power to act, inspired by her five principles: 1. The caisses are the driving force behind Desjardins Group. 2. The Federation and the subsidiaries exist to serve the caisses and their members. 3. Desjardins Group s growth and strategic development is driven by the caisses, supported by the subsidiaries and the Federation. 4. Our human capital is our greatest wealth and strength for the future. 5. Our cooperative values are central to Desjardins s actions. Soon after Ms. Leroux had taken office, the global financial crisis erupted, bringing with it substantial challenges for the banking sector. Ms. Leroux implemented a series of measures intended to protect Desjardins and its investors. She also made structural decisions to ensure Desjardins Group s future progress, including strengthening its capitalization. She proposed the Desjardins Group Development Plan, which was adopted by the Board of Directors in the fall of 2008 and brought before the Congress of Elected Officers in 2009. The Congress adopted several important strategies, including a focus on Desjardins members and clients and plans for Canadawide growth. Desjardins performance and financial strength were also addressed. In spring 2009, she announced a new, streamlined structure for Desjardins Group, broken down by business sector: Personal Services, Business and Institutional Services, Wealth Management and Life and Health Insurance, and Property and Casualty Insurance. This structure leveraged the strength of the group and led to greater cohesion and agility between the sectors, for the greater benefit of Desjardins members and clients. During Ms. Leroux s first term, Desjardins developed a capitalization plan and a framework for capital management to strengthen its financial footing and facilitate the flow of capital between components. Today, Desjardins remains one of the best capitalized financial institutions in Canada (see financial statistics in appendix). 1
Desjardins Group's strategic growth and development Ms. Leroux also worked to ensure Desjardins s sustained growth, particularly outside Quebec, in line with the strategies adopted during the 2009 Congress. Following this plan, Desjardins acquired Western Financial Group, an extensive insurance brokerage network in Western Canada, MGI Financial and the private-label card portfolio for the Staples/Bureau en gros chain of office-supply stores. Desjardins also forged partnerships with institutions such as Promutuel and signed a cooperation agreement with France s Crédit Mutuel, intended to support the development of both cooperative groups. In September 2010, Desjardins launched mobile services for both smartphones and tablets. They were an immediate success. Ms. Leroux also focused on employee engagement, implementing various measures to evaluate and improve Desjardins employee satisfaction, which led to our ranking as one of the best employers in Canada. Desjardins has a soul, and that soul is cooperation, said Ms. Leroux in 2008. This statement is echoed in the Co-opme program, which reinforces Desjardins leadership in the areas of education and cooperation, to which Desjardins allocates 1% of its annual surplus earnings. Convinced that strong cooperatives require both innovation and stability to create lasting prosperity, Ms. Leroux launched the tagline Cooperating in building the future. Second term Ms. Leroux was re-elected by acclamation in January 2012. Her second term was marked by a spirit of continuity, as she continued to work on the Co-opme program and other key projects. She oversaw the revival of the Desjardins Cooperative Institute and paid particular attention to the development of human capital, calling people our greatest wealth. She also granted additional support to the Desjardins Foundation, which provides scholarships to students at every level, and revitalized both the school and student caisse. Ms. Leroux continued to attentively manage Desjardins Group s growth, both in Quebec and in the rest of the country. Desjardins Group s capitalization was a priority for her, and the Federation began issuing capital shares in June 2013. These shares were the first cooperative shares to comply with the new Basel III regulatory standards. Because of its strong capitalization, Bloomberg News ranked Desjardins Group the strongest bank in North America and the fifth strongest worldwide in 2015. She also introduced various initiatives to improve member and client satisfaction, including Desjardinswide surveys and tools to assess service quality. 2
These efforts were supported by the creation of the Desjardins Promise and the launch of several exclusive caisse members advantages. The intent was clear: to position Desjardins as one of the top three financial institutions in the country in terms of service quality. On the international level, Ms. Leroux continued to work with Crédit Mutuel in France. She announced that a Desjardins Representative Office would be opened inside Crédit Mutuel s headquarters in Paris. This allowed us to increase our support for Canadian businesses in Europe while also helping European businesses looking to enter the North American market. Building on their cooperation agreement, Desjardins and Crédit Mutuel joined forces to create Monetico International, one of the major payment solutions companies in the world. Ms. Leroux is a firm believer in the cooperative model. When 2012 was declared the International Year of Cooperatives, she marked the occasion by holding the first International Summit of Cooperatives in Quebec City. It was a resounding success, bringing together nearly 3,000 participants from 91 countries. The summit helped to raise awareness of the cooperative model and expanded its influence not only in Quebec and Canada, but also worldwide. An equally successful second summit was held in 2014 and a third will take place in fall 2016. In terms of business development, Desjardins continued its Canada-wide expansion on various fronts. It acquired an interest in QTrade, known for its online brokerage platform, and also opened a financial service centre in the heart of Toronto s financial district, providing consumers and businesses with a full range of services under the same roof. Of these many achievements, one of the most exciting was the acquisition of the Canadian property and casualty and life insurance operations of the U.S. mutual State Farm. This propelled Desjardins General Insurance Group to third place in the Canadian property and casualty insurance market, an industry undergoing rapid consolidation. It also paved the way for new distribution channels for Desjardins financial products through the State Farm network, which includes nearly 500 agencies in Canada. These transactions significantly increased the number of members and clients we serve across Canada. Focusing on innovation Bolstered by the success of mobile services, Desjardins announced several innovative products during Ms. Leroux s second term, including Hop ns@ve, an app that encourages "impulse saving." Since its inception in 2014, Desjardins members have saved around $63 million thanks to this application. Another program, Ajusto, helps Desjardins policyholders save up to 25% on their auto insurance based on their driving habits. Desjardins was the first company to develop a smartphone application for this type of program. 3
In a push to make Desjardins as innovative as possible, Ms. Leroux grouped all of the IT teams under a new entity, Desjardins Technology Group. She also lent her support to projects such as the creation of excentriq, a community of over 4,000 employees, and the inauguration of the Desjardins Lab at the Complexe Desjardins in Montreal, an innovation space dedicated to improving the member and client experience. Throughout both of Ms. Leroux s terms, the caisse network adapted to the new consumption habits of members and clients, as Internet and mobile services grew rapidly in popularity. The brick-and-mortar Desjardins network in Quebec and Ontario held strong, with 1,122 points of service and 2,152 ATMs. In keeping with Desjardins s policy to decentralize employment, new call centres were set up in Granby and Trois-Rivières to support the Accès D call centre located in Montreal. This decision created hundreds of jobs. Desjardins has also opened regional offices for its Shared Services Centre in Quebec, allowing caisses to focus on the services offered to their members. Being aware that Desjardins presence is stronger in the regions than it is in Montreal, Ms. Leroux announced in spring 2014 a three-year plan to invest $100 million in the city. New, modern service centres using the latest technology were opened. Some are based on a brand new format, 360 d, tailored to clients aged 18-30 and are located near Université de Montréal, Concordia University and UQAM, while two others have modern studio floorplans. A service centre was also opened in Montreal s Marché Central. Ms. Leroux paid special attention to the services offered to businesses. Under her leadership, Desjardins Group implemented various initiatives to support business growth and ownership transfers for companies of all sizes. Prime examples include Desjardins contributions to the Fondation de l entrepreneurship, the Desjardins Entrepreneur Awards, venture capital funds, and solidarity-based financing programs like CRÉAVENIR for young start-ups and Desjardins Microcredit to Businesses. Under Ms. Leroux s watch, Desjardins strengthened its presence in Lévis, the city of its birth. A new 15- storey office tower was built on the Desjardins Campus, providing space for our insurance companies, which are growing everywhere across Canada. Major renovations were also done at the Complexe Desjardins in Montreal, allowing for a more seamless integration with the Quartier des spectacles. The Espace Desjardins and Desjardins Lab are located in prime real estate on the ground floor of the south tower. Finally in November 2015, Cooperatives and Mutuals Canada and the Conseil québécois de la coopération et de la mutualité nominated Ms. Leroux as president of the International Cooperative Alliance (ICA). Thanks to this support and Desjardins international reputation, she was elected by a large majority and will serve a two-year term. ICA was founded in 1895, and its mission is to support and promote the development of the cooperative movement worldwide. 4
Professional and community engagement Despite her heavy workload, Ms. Leroux is very active within her community, serving as a member of the Business Council of Canada, the Founders Council of the Quebec Global 100 network, the Board of Governors of Finance Montréal, the Prime Minister s Advisory Committee on the Public Service, the Economic Council of Advisors of the federal Minister of Finance, the federal Advisory Council on Women Entrepreneurs and Business Leaders, the Catalyst Canada Advisory Board and the B20 Financing Growth Taskforce. She is a member of the Board of Directors of CIC, a subsidiary of Crédit Mutuel, the International Cooperative Alliance, the European Association of Co-operative Banks and the International Confederation of Popular Banks. From 2012 to 2015, she chaired the Conseil québécois de la coopération et de la mutualité and sat on the Board of Directors of Co-operatives and Mutuals Canada. Ms. Leroux has received a number of honours, including being named a Member of the Order of Canada, an Officer of the Ordre national du Québec and a Chevalier of the Légion d Honneur (France). She is also a recipient of the Woodrow Wilson Award (United States), the Outstanding Achievement Award and Fellowship Award from the Ordre des CPA du Québec, and the Institute of Corporate Directors Fellowship Award. Her expertise and accomplishments have been widely acknowledged, notably by honorary doctorates from the Royal Military College of Canada in 2015, Saint Mary s University in 2015, Université de Montréal in 2013, Université de Sherbrooke in 2012, University of Ottawa in 2012, Concordia University in 2011, Bishop s University in 2011 and Université du Québec à Chicoutimi in 2010. Ms. Leroux is also committed to her profession and to her community. She has served as President of the Ordre des comptables agréés du Québec and Governor of the Canadian Institute of Chartered Accountants. She also volunteers her time to a host of charitable organizations, serving on the Board of Directors and Executive Committee of the Rideau Hall Foundation and chairing the Board of Governors of the Institut international des cooperatives Alphonse-et-Dorimène Desjardins and of the Desjardins Foundation. She served as co-chair of the 2014 Centraide fundraising campaign for Greater Montreal and presided over the 2013 Canada Summer Games in Sherbrooke. In 2012, she published the book Alphonse Desjardins: A Vision for Today s World, Quotations on the Amazing Power of Cooperatives. She followed this up with a second book in 2014, Conversations on Cooperation, featuring interviews with 18 international leaders of the cooperative world. 5
Financial information: 2007-2015 (1) Surplus earnings before dividends (in $M) Total income (in $M) Equity (in $M) 2007 2008 2009 2010 2011 2012 2013 2014 2015 1,122 88 1,091 1,337 1,512 1,504 1,530 1,593 1,959 9,671 8,373 10,670 11,543 13,205 12,478 11,734 15,235 15,286 10,266 10,845 11,726 11,921 13,672 15,459 17,232 18,893 21,725 Return on equity (in $M) 12.3 0.9 10.2 11.9 12.0 10.2 9.4 8.7 9.1 Tier 1a capital ratio (in %) Gross impaired loans / gross loans ratio (in %) 14.2 13.6 15.8 17.7 17.3 16.8 15,7 (2) 15,7 (2) 16,0 (2) 0.41 0.40 0.46 0.43 0.41 0.35 0.33 0.34 O,34 Assets 144.1 152.5 157.4 179.0 190.2 196.8 212.0 229.4 248.1 (in $B) Employees 40,345 41,664 42,110 42,641 44,645 44,942 45,219 45,966 47,654 (1) Data for the years 2007-2009 was prepared using the Canadian generally accepted accounting principles in effect at the time (GAAP), while data from 2010-2014 was prepared in accordance with the new international financial reporting standards (IFRS). (2) Tier 1a capital ratio under Basel III. Source: Public Relations Desjardins Group February 2016 6