Access eyes merger with three small credit unions

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This article was published 09/09/2022 (1134 days ago), so information in it may no longer be current.

Access Credit Union, which became the largest credit union in the province earlier this year, is in discussions to merge with three more smaller credit unions.

Access has significantly bulked up since its merger with Crosstown Credit Union in 2021. At the time they were the fourth and fifth largest member-owned financial institutions in the province.

Then at the beginning of this year it concluded two deals to merge with Noventis and Sunova and started the process to merge with small Amaranth Credit Union.

On Thursday it was announced that Access has begun the merger discussion process with two more tiny credit unions — Casera Credit Union and Carpathia Credit Union.

According to Access CEO Larry Davey, Access’s ability to surpass Steinbach Credit Union as the largest in the province — with assets of more than $10.6 billion before these latest mergers — is about its mandate formed some years ago to focus on members, staff and community and a desire to “create something others wanted to join.”

Davey said, “Lots of credit unions endorse the co-operative principal and this (a merger with Access) is a fit with their values.”

“We have worked with Access in the past, and these discussions are a natural extension of the great working relationship we have had with them,” said Carpathia board chair, Don Cilinsky.

But as important as the right cultural fit is, the smaller credit unions are having a harder time keeping up with technology investments that are required to maintain the significant market share that credit unions have in Manitoba.

Davey said people understand there are growing costs for technology and, increasingly onerous costs for cybersecurity.

“As people become used to various types of technology and apps they expect the same from their financial institution, the same ease of use (as that of the mainstream financial institutions),” he said. “It’s up to us to create that ease of use.”

If all of Access’s mergers end up being completed it will leave the province with 16 credit unions down from more than 65 just 20 years ago, an indication of the efficacy of consolidation.

“With scale, technology comes at a cheaper cost for our members,” Davey said. “Technology vendors usually charge a price per member or per transaction. It makes a big difference having the scale.”

Members of Amaranth, Carpathia and Casera credit unions will eventually have to vote on a merger if their boards of directors agree to the terms. Access members will not need to vote because Access’s portion of assets represents more than 90 per cent of the proposed merged entity’s assets.

In a statement made on the release of Credit Union Central Manitoba annual report in March, it was noted that more than 50 per cent of Manitobans use credit unions for their financial services needs and credit unions have a 40 per cent share of the market in terms of assets.

“The continued strength of credit unions — despite challenging and constantly changing business conditions — is a testament to their commitment to Manitobans and the communities they serve,” said Curtis Wennberg, CEO of Credit Union Central of Manitoba.

martin.cash@freepress.mb.ca