Access and Amaranth Credit Union in talks for potential merger

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This article was published 30/07/2022 (1238 days ago), so information in it may no longer be current.

Surviving an increasingly digital environment is among the reasons for Manitoba’s latest proposed credit union merger.

Access Credit Union and Amaranth Credit Union announced Friday they’re discussing a merger.

If approved, Amaranth Credit Union would be the fourth institution to join Access since the start of 2021.

“These discussions began (in January) when Amaranth recognized that change was necessary for continued growth and maintaining value for members,” Marie Strong, Amaranth Credit Union’s president, said in a statement.

“The competitive landscape in the Canadian financial services sector remains highly volatile, with expanding and tightening regulations, increasing member preferences, and growing competition,” Strong’s statement reads.

Amaranth Credit Union posted losses in member share redemptions for both 2021 and 2020 in last year’s annual report.

Merging will allow both credit unions to eliminate duplicated costs and provide Amaranth members use of Access’s technology. Amaranth Credit Union is a standalone operation; Access has 52 branches and a new digital banking platform.

“These additional efficiencies would result in the credit union being in a resilient financial position long-term,” Strong wrote.

All employees would keep their jobs, she noted.

Amaranth Credit Union serves 1,200 members and has $18 million in assets. Access Credit Union’s assets surpass $6 billion, according to its 2021 financial report. It has more than 168,955 members.

The COVID-19 pandemic has likely played a role in Access’s most recent — and pending — mergers, according to Larry Davey, Access Credit Union’s president and CEO.

“There’s a greater propensity to use technology, there’s a greater rush to put out new technology, and of course, that comes at a cost,” Davey said. “By joining together and having scale, you can reduce that cost for your members.”

Earlier this year, members approved the merger of Access, Noventis and Sunova credit unions. The grouping became Manitoba’s largest credit union.

In 2021, Access merged with Crosstown Civic Credit Union. At the time of the vote, the two were the province’s fourth and fifth largest credit unions, respectively.

Mergers aren’t new, Davey said. He pointed to his time as CEO of Gimli Credit Union nearly 20 years ago — then, the company joined with other credit unions to form Noventis.

“People do understand that with scale, you can see reduced costs when it comes to implementation of technology or expanding of technology,” Davey said.

He said he doesn’t expect a future in which Manitoba has just one large credit union, nor is it Access’s goal to balloon as much as possible.

“It not about becoming bigger. It’s becoming an organization that can provide more to members,” Davey said. “If by gaining scale, it allows us to provide these products and services at a reduced cost to members, we see that as a huge benefit for our membership.”

Access returned more than $13 million to its members and launched its new digital banking offering after its Crosstown Civic merger, Davey noted.

Access reported asset growth of 5.43 per cent in 2021.

“We’re always open to talking to like-minded credit unions,” Davey said, adding credit unions have always been competing with banks.

Across Manitoba, credit unions’ equity grew 6.56 per cent year-over-year in 2021, to a total $2.61 billion, according to a Credit Union Central of Manitoba report.

The trade association deferred comment on Access and Amaranth’s potential deal, directing a reporter to Access Credit Union.

Access’s board of directors must recommend the recently proposed merger. If they do, Amaranth Credit Union’s members will approve or deny the deal this fall.

gabrielle.piche@winnipegfreepress.com