ANNUAL REPORT 2019

Caisse d'économie solidaireDesjardins

Head office155, boulevard Charest EstQuébec (Québec) G1K 3G6514 598-1666

CAISSE D'ÉCONOMIE SOLIDAIRE DESJARDINS

Note to readers

This annual report provides an overview of Caisse d'économie solidaire Desjardins's key financial data as at December31, 2019.

This document complies with the reporting requirements of the Act respecting financial services cooperatives and theAutorité des marchés financiers and was approved by the caisse board of directors.

Garry Lavoie, ChairMathieu Pellerin, Secretary

About Caisse d'économie solidaire Desjardins:

15,286 members

$809,341 given back through our CommunityDevelopment Fund

A dynamic team of managers and employees under thegeneral management of Marc Picard

Dedicated directors

Garry Lavoie Chair

Léopold Beaulieu First Vice-Chair

Katina Binette Second Vice-Chair

Gérald Larose Third Vice-Chair

Mathieu Pellerin Secretary

Claude Allard Director

Denise Boucher Director

Zahra Louasi Director

François-Xavier Michaux Director

Josée Montpetit Director

Louise Pettigrew Director

Jeanne Robin Director

Denis Roy Director

Sokchiveneath Taing Chhoan Director

Gabriel Chaloult-Lavoie Young Intern Director

Marie-Pierre Jacob Young Intern Director

Desjardins Group highlights

Surplus earnings before member dividends up$272 million compared to 2018, for a total of$2,598 million, including:

$1,881 million from Personal and BusinessServices

$729 million from Wealth Management andLife and Health Insurance

$187 million from Property and CasualtyInsurance

$203.5 billion in outstanding loans andacceptances

$67.6 billion in assets under management

21.6% Tier 1A capital ratio

9.9% return on equity, compared to 9.3% in2018

Adjusted return on equity of 8.9%, the sameratio as in 2018

Assets having exceeded $300 billion to total$313 billion

$17,909 million in operating income

$445 million given back to members and thecommunity

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CAISSE D'ÉCONOMIE SOLIDAIRE DESJARDINS

Caisse Financials

Assets of $1,097,080K, up 3.2%

Liabilities of $1,011,414K, an increase of 2.6%

Equity of $85,666K, up 10.2%

Capital stock: $1,336K

Distributable surplus earnings: $10,034K

Accumulated other comprehensive income: $421K

Reserves: $73,875K

Stabilization reserve: $2,934K

Reserve for future member dividends: $4,698K

Community Development Fund: $2,251K

Operating surplus earnings of $12,344K, up 56.5%

Interest income totalling $36,705K, an increaseof 19.2%

Interest expenses of $12,032K, up 27.2%

Other income totalling $4,305K, up 5.8%

Non-interest expenses of $16,560K, a decreaseof 1.8%

All loans to restricted parties* were granted inAll loans to restricted parties* were granted in

accordance with the caisse's applicable rules ofaccordance with the caisse's applicable rules of

professional conduct. Loans granted to restricted partiesprofessional conduct. Loans granted to restricted parties

totalled totalled $255K.K.

**Restricted partiesRestricted parties include: include:

a)a) Caisse directors and the caisse general manager,Caisse directors and the caisse general manager,

including their relatives including their relatives

b)b) Federation directors, including their relativesFederation directors, including their relatives

Investment Funds

The money that caisses invest in these funds allows the

Fédération des caisses Desjardins du Québec (the

Federation) to invest in Desjardins Group subsidiaries and

regional projects. The table below indicates the caisse's

interest in each investment fund and the fund's return at

the end of the fiscal year.

Provincial funds Value of shares held as at

December 31, 2019($)

Averagereturn

(%)

Société de Services descaisses Desjardins (SER) (177) 0.0

Desjardins CapitalManagement (INV) 47,892 30.6

Desjardins FinancialHolding (FIN5A) 16,255,393 12.7

The Federation's obligation toholders of permanent shares

Further to a recommendation issued by the Autorité des

marchés financiers, the Federation guarantees that it will

indemnify Quebec caisse members holding permanent

shares in the event of losses resulting from

misinformation in the audited Combined Financial

Statements of the Desjardins caisses in Quebec and

Desjardins Group's annual Management's Discussion and

Analysis. These documents are available at

www.sedar.com. The Federation's obligation in this matter

is subject to certain conditions. Holders of permanent

shares can request more information at their caisse.

The Combined Financial Statements of the Desjardins

caisses in Quebec are also available to the public at

www.desjardins.com.

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CAISSE D'ÉCONOMIE SOLIDAIRE DESJARDINS

Summary of the loan portfolio

As at December 31, 2019, the quality of the caisse's loan portfolio remained high. Gross impaired loans represent just 0.6% of total gross loans. The table below shows the grosscarrying amount of loans and their allowance balance by stage:

Stage 1Non-credit impared

Stage 2Non-credit impared

Stage 3Credit-impared

Total 2019 Total 2018

As at December 31(in thousands of Canadian dollars)

Gross carryingamount

Allowance forcredit losses

Gross carryingamount

Allowance forcredit losses

Gross carryingamount

Allowance forcredit losses

Gross carryingamount

Allowance forcredit losses

Net carryingamount

Net carryingamount

Residential mortgages 581,925 136 22,232 299 819 47 604,976 482 604,494 538,723Consumer and otherpersonal loans 7,837 10 729 15 44 32 8,610 57 8,553 9,631

Business and government 192,603 137 46,560 266 4,075 998 243,238 1,401 241,837 220,587

Total 782,365 283 69,521 580 4,938 1,077 856,824 1,940 854,884 768,941

For more information, see Note 2, "Basis of presentation and significant accounting policies" to the Combined Financial Statements of the Desjardins caisses in Quebec for the yearended December 31, 2019, available at www.desjardins.com. Certain comparative figures have been reclassified to conform with the presentation to the current year's annualreport.

Summary of the deposit portfolio

As at December 31, 2019, the caisse's member deposits totalled $981,973K, up $22,577K, or 2.4%, year over year. Deposits by businesses and governments provide the mainsource of funding for the caisse's expansion. These deposits represent 75.8% of total deposits as at December 31, 2019. The following table shows the breakdown of deposits bytype of depositor with amounts by type of savings*.

As at December 31(in thousands of Canadian dollars)

Payable on demand

Payable uponnotice

Payable on afixed date

Total 2019 Total 2018

Individuals 80,398 8,146 104,954 193,498 168,504

Business and government 527,892 23,333 193,246 744,471 744,317

Deposit-taking institutions - 35,735 44,004 46,575

Total 616,559 31,479 333,935 981,973 959,396

*For more information on presentation and significant accounting policies, see Note 2 to the Combined Financial Statements of the Desjardinscaisses in Quebec, available at www.desjardins.com.

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