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STATUS: Éminence grise. Claude Béland's retirement March 25 after 13 years as president of Mouvement des caisses Desjardins deprives Quebec business of one of its most outspoken and esteemed sages. Béland, 68, initiated the transformation of the $76-billion caisse populaire co-operative movement. With 5.5 million members, almost all of them in Quebec, it is the leading player in the province's financial services sector. Béland's mission was to remake it from an archconservative institution into a leaner, nimbler one better able to compete in an age of virtual banking and one-stop financial shopping. It wasn't easy. He met fierce resistance from grassroots members, who loomed large in Desjardins' highly decentralized power structure. Béland's parting shot--the merger of Desjardins' 11 regional federations into a single, central decision-making body -- will surely make things easier for his successor, Alban D'Amours.

SCENE: An unremarkable meeting room next to Béland's Montreal office in the penthouse of the 40-storey south tower of the Complexe Desjardins. The view faces southeast, overlooking the city's shabby eastern downtown core and landmark Jacques Cartier Bridge.

ROB magazine: Several years ago, you set a target of surpassing $100 billion in assets by 2000. You didn't make it. Why not?

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Béland: The financial services industry has changed a lot. Back then, Desjardins was merely a savings and loan co-operative. Now it's a financial services co-operative that sells products that don't appear on the balance sheet, such as mutual funds, which have become very popular. So, I don't regret having missed the $100-billion target. I more than made up for it by surpassing the other target I set of distributing $100 million in dividends [ristournes]to caisse members by 2000. In 1999, we paid out $122 million.

ROB magazine: What do you regret the most about your presidency?

Béland: I remember on my first day, in 1987, I was interviewed by Radio-Canada and was asked what I most hoped to achieve. I said I wanted to increase the number of "active" Desjardins members--meaning the people who do business with Desjardins primarily because they believe in the principles of the co-operative movement. Unfortunately, that hasn't happened. We've got five million

members--because, you know, every customer is a member--but most of them don't even realize they're members.

Social values have changed a lot in recent years. Today, individualism is in fashion. I just returned from the provincial government's Youth Summit. The polls done [before the event]showed that when you ask young people if they want to get involved in a cause, the great majority say no.

ROB magazine: What was your greatest achievement as president?

Béland: Do I get to mention more than one? [laughs]There are two, really. First, there's our capitalization [the difference between assets and liabilities, considered a cushion against loan losses and a lever for growth] When I was elected in 1987, the capital ratio stood at barely 3% of assets. So, I worked very hard to improve the situation, in part by selling "perpetual" shares to members. But mainly by creating Capital Desjardins Inc., which allowed us to raise capital, via debentures, on public markets, notably in the United States. Today, our capital ratio--at 11% of assets--compares favourably with that of any major Canadian financial institution. The second achievement is the creation of the single federation.

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ROB magazine: Desjardins was one of the first institutions to implement the "depillarization" concept of a financial services supermarket, thanks to provincial regulations that allowed you to sell insurance in your branches. [Canada's banks, which are federally regulated, are still prevented from doing so.]What's the next trend?

Béland: The next step is decentralization. More and more, people are going to do their banking business from their homes, via the Internet. Institutions will have to adapt. People say we've cut our business hours. On the contrary, customers can now conduct basic transactions on a 24-hour basis electronically; and our financial advisers [individual sales agents who can, among other things, sell loans, property insurance and mutual funds, and process discount brokerage orders]are available on a by-appointment basis at the customer's convenience.

ROB magazine: What is the biggest challenge facing your successor?

Béland: That's easy. It's carrying through with the creation of the single

federation. In addition, he will have to make sure Desjardins continues

to adapt to change. People ask me if the re-engineering [a $500-million plan launched in 1997 to increase automation, reduce tellers, close branches and retrain caisse workers as financial advisers]is over. I tell them: "Yes--the first phase."

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ROB magazine: As a co-op, Desjardins cannot issue shares to raise capital or make acquisitions. This puts it at a disadvantage to the big banks, most of which have staked their futures on growth, likely through mergers. Do you ever see Desjardins becoming a public company to compete?

Béland: No. I don't see it and I certainly don't wish for it. That would be the end of Desjardins as we have always known and wanted it. The inalienable character of the Mouvement Desjardins is important for its survival. As it stands, Desjardins cannot be the object of a takeover. That is a rampart, a shield. Desjardins was created principally to serve Quebeckers. What is important is not being the biggest, but the best. To do that, we don't need unlimited capital.

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