Standard & Poor’s has released its harmonized counterparty credit ratings on Desjardins-Laurentian Financial Corp. and its major subsidiaries, Desjardins Specialized Financial Services Management Inc, Desjardins Trust Inc., and Desjardins Industrial & Commercial Credit Inc. The ratings have been harmonized at ‘A’. The outlook is stable.

The ratings agency says the ratings on Desjardins-Laurentian and its subsidiaries reflect the lack of a formal guarantee by Caisse centrale Desjardins du Quebec, historically poor performance, small capitalization (with the exception of Desjardins -Laurentian), and loan portfolios that are winding down.

Desjardins-Laurentian is a diversified financial services holding company and is wholly owned by The Mouvement des caisses Desjardins. Desjardins-Laurentian is focused on life and general insurance, corporate and personal trust, and brokerage and funds management businesses.

Among the company’s major holdings is Desjardins Specialized Financial Services Management Inc. (DSFSM), a nonregulated intermediary holding company, which in turn owns Desjardins Trust Inc. (the trust division and main operating subsidiary of DSFSM) and Desjardins Industrial & Commercial Credit Inc. (Desjardins Industrial). Desjardins Trust and Caisse centrale Desjardins carry out all of Desjardins Industrial’s functions because it has no staff or branches and its small commercial lending book continues to be downsized.

Although the Desjardins group is transitioning culturally and structurally to become more sales oriented and more efficient, a stable outlook is assigned. Standard & Poor’s believes the mandate to serve a fuller spectrum of rural and urban customers limits the ability to maximize profitability. The company’s future will largely be shaped by success in maintaining its niche, profitability, and market shares, Standard & Poor’s said.