Press Release

DBRS Comments on Unauthorized Access of Desjardins Group Member Data

Banking Organizations
June 21, 2019

DBRS Limited (DBRS) is commenting on Desjardins Group’s (Desjardins or the Group) June 20, 2019, announcement that a substantial quantity of personal information related to the Group’s retail and business members had been stolen from its network by an employee. While the data breach affects 2.9 million retail and business members, the stolen information did not include more sensitive information such as personal identification numbers, passwords or security questions. Desjardins has publicly committed to reimbursing its members for any financial loss incurred resulting from this security breach and has offered affected members a credit monitoring plan and identity theft insurance for 12 months, paid for by Desjardins.

At this time, DBRS does not anticipate any rating changes (Desjardins is rated AA/R-1 (high) with a Stable trend by DBRS) emanating from this announcement. However, DBRS will continue to monitor the severity of the reputational damage stemming from the data breach and its potential impact on the Group’s funding and liquidity profile. In DBRS’s view, Desjardins’ dominant franchise in Québec, coupled with its solid funding and liquidity positions (a liquidity coverage ratio of 123% and a ratio of unencumbered liquid assets to total assets of 9.3% in Q1 2019), should help support confidence. DBRS does note, however, that if this announcement results in a sustained run on deposits casting doubt on the effectiveness of the Group’s security infrastructure, the ratings of Desjardins could come under pressure.

The police have confirmed the identity of the individual responsible for the theft, who was promptly fired by Desjardins. Positively, DBRS notes that the data breach originated internally, and that Desjardins’ outward-facing security systems have not been compromised.

Notes:
All figures are in Canadian dollars unless otherwise noted.

For more information on this credit or on this industry, visit www.dbrs.com.

DBRS Limited
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Toronto, ON M5H 3M7 Canada