A new king of credit unions

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This article was published 26/02/2015 (4169 days ago), so information in it may no longer be current.

MANITOBA’S credit union system will likely soon have a new, undisputed top dog.

The province’s second-largest credit union in terms of assets — Assiniboine — and its fifth-largest — Access — have tentatively agreed to merge their operations to create the province’s largest credit union in terms of assets, members and branches.

It will also have the greatest geographical reach, with a branch network stretching from Gillam in the north to Emerson in the south, and from Sprague in the east to Manitou in the west, and will rank as the sixth-largest credit union in Canada.

The merger is still tentative at this point because it has to be approved by the members of each member-owned institution. The members are scheduled to vote on the proposal on April 22. If approved, the merger will take effect Oct. 1.

Steinbach Credit Union has for decades been considered the province’s largest credit union because it has more assets than any of the other 35 in the province, at $4 billion-plus. Assiniboine is the second-biggest in terms of assets, at $3.8 billon, but the largest in terms of members (112,806) and branches (21).

But the new entity, which will be called Access Credit Union, will be tops in all three categories, with 38 branches, more than 154,800 members and $5.7 billion in assets.

Assiniboine and Access officials said one of the reasons the merger is a good fit is there is no geographical overlap between the two operations.

Assiniboine has 19 branches in Winnipeg and one each in Gillam and Thompson, while all 17 of Access’s branches are in rural centres in southern Manitoba.

For that reason, no existing branches will be closing and no employees will lose their jobs, they added.

Assiniboine president and CEO Kevin Sitka will have the same title with the new entity, while Access president and CEO Larry Davey will become senior vice-president and chief operating officer.

The new co-operative will have two corporate offices — one in Winnipeg and one in Winkler, where Access’s headquarters is now located.

“With the technology today, folks can communicate pretty easily,” said Assiniboine chairwoman Margaret Day. “And when we look at serving members, there are specific needs to rural communities that shouldn’t be housed out of Winnipeg. (So) it makes sense to have both offices.”

Day and Access chairman Darryl Loewen said the new, larger entity will be better equipped to serve its members and to compete in an increasingly competitive and challenging financial services industry.

“We know we’re both strong credit unions, but even better together,” Loewen said during a news conference held Wednesday at Credit Union Central Manitoba (CUCM) headquarters in Winnipeg. “They (members) will have access to more than 38 branches… and to the talents, the skills and the financial wisdom of over 800 staff.”

“This new entity will have the scale to provide more innovative products and services, more efficiently, offer added convenience and expertise to our members and provide greater opportunities for career advancement to our staff,” Day added.

They said the deal had been in the works since the summer of 2013. Both had been involved in earlier mergers. Assiniboine’s most recent were its 2007 merger with Vantis and Astra credit unions and its 2008 union with Buffalo Credit Union, while Access has been involved in five other mergers in the last 12 years.

CUCM president and CEO Garth Manness noted banks and credit unions in Canada are facing growing challenges in the areas of technology, regulation and competition, and they’re doing it in a low-interest-rate, low-margin environment.

“For some credit unions, mergers like this one is how they’ve chosen to respond and to continue to provide their members with a strong alternative to banks,” he added.

He also predicted more mergers will follow.

“Our history has been a move to fewer and larger credit unions over time, so that evolution will likely continue.”

murray.mcneill@freepress.mb.ca