Quebec's Desjardins Group Seeking Entry to Wall Street
Francis, David R., American Banker
MONTREAL -- New York's money market could soon be invaded by an unusual newcomer -- Caisse Centrale Desjardins du Quebec, the central bank and financial agent for what is likely the original savings and loan cooperative system in North America.
The institution has requested a credit rating on its certificates of deposit from Standard & Poor's Corp. and Moody's Investor Service. If it gets a rating similar to the top one it enjoys in Canada, it will start borrowing in New York and will set up an office there later this year, says Bruno Riverin, its president.
The nonprofit Desjardins Group has deposits of more than $25 billion. Modeled after German bank cooperatives, it was founded in 1900 in Levis, a small town on the St. Lawrence River opposite Quebec City, by Alphonse Desjardins, an official reporter for the House of Commons in Ottawa.
Many small farmers and poor workers at that time had no access to banks. Mr. Desjardins' goal was to provide them with a vehicle for saving their money and lending to their community. "They should be working together for a better life rather than just strugging for existence," he said.
Quebec's Largest Financial Network
Today almost every household in this province of 6.5 million people has a deposit in a caisse, or savings bank. The Desjardins Group has the largest financial network in the province of Quebec. It holds 38% of individual savings and makes some 50% of the mortgages, 32% of personal loans, and 55% of loans to farmers.
It has steadily expanded from retail banking into other financial areas, starting with general insurance in 1946 and adding life insurance in the 1960s. In more recent years it has moved into corporate loans, the credit card business (Visa), trust operations, investment banking, money market operations, and venture capital.
Mr. Riverin ranks the group as the sixth largest financial institution in Canada after the Royal Bank of Canada, the Bank of Montreal, the Toronto-Dominion Bank, the Bank of Nova Scotia, and the Canadian Imperial Bank of Commerce.
And he maintains that the group has not lost touch with its original purpose. "We do are for our members, probably more than banks for their customers," he says. "We spend a lot of energy and time on the quality of service."
One element in the group's early success was its French-Canadian origin and control. It became a subject of French-Canadian pride, since the nation's major banks usually were owned and run by English-speaking Canadians.
The group has 1,700 facilities in Quebec, compared to 1,200 locations for all banks. …