LEVIS, Quebec – When Desjardins Group announced a reorganization in mid-May, the news drew considerable media attention. After all, Desjardins is the largest financial institution and private employer in the province and the sixth largest in Canada. Its Web site, www.desjardins.ca, is the most visited financial Web site in the province and third most-visited in Canada. With 5 million members, 38,000 employees and assets of almost $100 billion, the cooperative is a major economic force with contact names in the Rolodex or database of most business reporters. Its moves are closely scrutinized. Under the restructuring, the parent Desjardins Group will exist only to hold the capital stock of its subsidiaries. Desjardins Financial's assets and operations will shift to the credit union group. The moves are expected to boost earnings approximately $100 million before taxes in the next two years. While indeed newsworthy, for insiders the announcement was simply an outgrowth of developments that started in 2000 when Alban D'Amours became president/CEO. When he was recently re-elected to a second term, he was ready to move forward on some priorities he had originally identified. "Our president put forth some objectives," explains Andre Chapleau, manager of media relations. "We have been very, very good at adapting ourselves to the evolution of our market and the needs of our members. Now we need to be more proactive." Other priorities include risk management in line with the Basel II accords, and acting more as an integrated group including not only credit unions but insurance, brokerage and venture capital. "We did not have a COO for the whole organization. We now have one. In terms of risk management, we also now have a senior vp responsible for risk management. Before this announcement each entity had its own human resources policies. We need to better integrate our various activities like that," Chapleau says. Competition is certain one motivator. Canadian banks are merging into larger and larger entities, and international groups are invading the market. Desjardins wants to become more agile in order to compete with other giants. Chapleau notes Dejardins is expanding in other provinces, including neighboring Ontario. With Desjardins Credit Union, insurance and brokerage in place there, Desjardins hopes to generate more revenue from the Ontario market. One advantage Desjardins sees is the fact all its credit unions are very integrated and share the same computer system. "We present ourselves as a serious alternatives to banks," Chapleau states. "We don't skim the lower-income people. We serve every segment of the population. The Province of Quebec has a population of 7 million and we have about 5 million members, although not all of them are exclusively with us." The reorganization was expected to affect 25 jobs, but Chapleau notes Desjardins currently has about 300 job openings. He shies away from describing the latest shifts as a major reorganization. The real major reorganization, he says, took place in 1999. Within the Province of Quebec there were 10 credit union federations topped by a confederation. Each time the confederation put forth a recommendation it was examined by each federation. By the time they finished the rival banks had already made their moves. So the boards of the credit unions involved decided to merge the 11 organizations into one. "That was major," Chapleau states. "At that time we abolished 900 jobs. We didn't fire 900 people, but we abolished 900 jobs." -

[email protected]