Giving banks a run for their money

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Entegra Credit Union is 'bursting at the seams' and building a new branch and headquarters at the site of the former St. Vital Bowl, says CEO Gord Kirkwood. (PHIL HOSSACK / WINNIPEG FREE PRESS) Photo Store

Don't look now but Manitoba's credit unions are in danger of becoming a juggernaut.

The financial co-operative system has just hit $20 billion in assets, a milestone that represents a doubling in size in just six-and-a-half years and a quadrupling since 1999.

"When you have a compounded growth rate of more than 11 per cent, it shows that the offerings credit unions have in the province are being well received by Manitobans," said Garth Manness, CEO of the Credit Union Central of Manitoba.

There are no definitive market-share numbers for the banking system in Manitoba but Manness said based on information he has received from the Bank of Canada, he guesses credit unions have about 42 per cent. That's the highest of all the provinces with the possible exception of the Caisses movement in Quebec, he said.

Much of the credit-union strength comes from small business. About half of all Manitobans have a credit union account.

So, at this rate, when will credit unions surpass the banks as the No. 1 provider of banking services in the province? Manness didn't want to speculate but said he doubts if the recent growth rate will continue at its current pace. The 42 credit unions in the province, however, aren't going to sit idly by as the banks try to cherry-pick their clients, he said.

"We are looking to continue to see what the Manitoba consumer wants in financial services and we're looking to provide it for them," he said.

The experience of Entegra Credit Union isn't uncommon. The Winnipeg-based co-operative, which has $500 million in assets and 13,000 members, has just bought St. Vital Bowl, a recently-closed bowling alley on St. Anne's Road. It plans to open a new 8,000-square-foot branch -- its fourth -- and move its corporate headquarters there from 201 Portage by the fall of 2013.

Not only is Entegra going to expand the 13,000-square-foot main floor but will build a second floor, too. It also plans to lease out 12,000 square feet of space.

"Our branches are bursting at the seams. We've had phenomenal growth. We've quadrupled in 10 years, doubled in five years and last year we grew 21 per cent," said Gord Kirkwood, Entegra's CEO.

As of next January, there will be 41 credit unions in the province when the merger between Sanford Credit Union and Access Credit Union is official.

It's only a few years ago that the credit union total in Manitoba was 50 per cent higher but Manness said he doesn't foresee the trend continuing to the point where the province's credit union system operates under a single banner. In fact, he said the merger-mania of a couple of years ago has plateaued of late.

"We have seen an evolution to fewer and larger credit unions. Will we see more of this activity? Yes, but I don't expect we would ever get to one credit union in Manitoba," he said.

Glenn Friesen, CEO of Steinbach Credit Union, the province's largest, agreed. He said he doesn't know how low the number of credit unions will go, only that it will continue to go lower.

"Some years there are three or four amalgamations and then all of a sudden, it slows down. It could be five or six this year or it could be none, who knows?" he said.

geoff.kirbyson@freepress.mb.ca

Banks respond

THERE'S strength in numbers.

That's the message from the Canadian Bankers Association, which says bank customers benefit from a nationwide network of more than 6,000 branches and more than 17,000 ABMs; secure and convenient electronic banking; access to a full range of products and services with consistent pricing throughout the country; evening and weekend hours; and, soon, mobile payments.

"While some people choose to do their banking with a credit union, there are many benefits to banking with a bank," said Maura Drew-Lytle, director of media relations and communications with the CBA.

The competition provided by more than 40 banks and hundreds of credit unions and other financial institutions, is good for consumers, she said.

Republished from the Winnipeg Free Press print edition June 13, 2012 A4