Desjardins mortgage portfolio grows 8% as quarterly earnings rise
Desjardins Group’s residential mortgage portfolio grew by more than $15 billion over the past year as stronger net interest income and lower credit-loss provisions helped drive a 34.8% increase in second-quarter earnings.
The financial co-operative reported surplus earnings before member dividends of $1.21 billion, up from $900 million in the same quarter last year. Total net revenue rose 13% to $4.62 billion.
Residential mortgage balances reached $206.8 billion as of June 30, an increase of 8.3% from $191.0 billion a year earlier. The portfolio grew by $5.4 billion, or 2.7%, during the second quarter alone.
Desjardins attributed the increase in net interest income partly to growth in residential mortgages and business loans, along with wider margins.
Net interest income rose 13.6% year over year to $2.30 billion, while the group’s net interest margin increased to 2.33% from 2.28%. Within its Personal and Business Services segment, the margin rose more sharply to 2.84% from 2.64%.
The segment, which includes Desjardins’ mortgage and retail banking operations, generated surplus earnings before member dividends of $633 million, up from $370 million a year earlier. Its net interest income rose 14.6% to $2.20 billion.
Mortgage credit performance remains stable
Gross credit-impaired mortgages totalled $441 million at the end of the quarter, down from $485 million a year earlier but up from $421 million at the end of March.
Credit-impaired mortgages represented 0.21% of the residential mortgage portfolio, own slightly from approximately 0.22% at the end of 2025. Another $269 million in residential mortgages were at least 31 days past due but had not been classified as credit-impaired, up from $234 million at year-end.
Across Desjardins’ entire loan book, gross credit-impaired loans declined to $2.61 billion from $2.77 billion in the previous quarter. They represented 0.80% of gross loans, compared with 0.82% a year earlier.
The provision for credit losses fell to $165 million from $203 million in the second quarter of 2025. Desjardins said the decline was primarily related to lower provisions on credit-impaired business loans, partly offset by higher provisions on loans that were not credit-impaired.
The group’s credit-loss provisioning rate fell to 0.19% from 0.28% a year earlier.
Within the caisse network in Quebec and Caisse Desjardins Ontario, the residential mortgage portfolio, including home equity lines of credit, totalled $151.7 billion, up 4.5% year over year. Uninsured loans accounted for $112.8 billion of that amount, while insured or guaranteed loans totalled $32.6 billion and home equity lines of credit stood at $6.3 billion.
The average loan-to-value ratio on uninsured residential lending originated during the quarter was 63.3%, compared with 63.5% a year earlier.
Variable-rate mortgages accounted for 30.8% of the caisse network’s mortgage portfolio, up from 26.3% a year earlier. The proportion of amortized mortgages with more than 30 years remaining declined to 0.7% from 1.7%.
Desjardins finished the quarter with $543.5 billion in total assets, up 8.4% from a year earlier and 6.5% since the end of 2025. Its Tier 1A capital ratio stood at 23.6%, compared with 22.9% a year earlier.
“Our financial performance has value only if it translates into tangible benefits for our members and clients as well as for communities,” Desjardins President and CEO Denis Dubois said in the earnings release.
Dubois added that more than 7,000 housing units have been built, are under construction or have received commitments under Desjardins’ goal of supporting 10,000 units by 2028.
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Last modified: August 13, 2026
