Vancity credit union increases profits

VANCOUVER — Vancity credit union weathered the 2009 economic storm by freeing up capital, reducing expenses and streamlining. And the result was increased profits.

Net income over the year was $50.3 million, 7.5 per cent higher than the $46.8 million earned a year earlier. And deposits at the union’s almost 60 branches grew by $1.2 billion, twice as fast as deposits grew in 2008.

It was a tough year but "we’re happy with our financial performance," Vancity’s president and CEO Tamara Vrooman said in an interview.

Vancity’s coffers got a $65-million boost after it divested itself of non-core assets, like the personal banking side of its online arm, Citizens Bank and its home and auto insurance business.

The volatile stock market and historically low mortgage rates also helped the bottom line.

People wanted to park their money in a safe haven because of the state of the economy, Vrooman said. And deposits at credit unions, which are provincially regulated, are 100 per cent guaranteed.

"With members who have a lot of cash or deposits it’s a great way for them to consolidate," she said. (Banks, on the other hand, are federally regulated and only deposits up to $100,000 are insured.)

The historically low mortgage rates also had many members refinancing their mortgages at Vancity, bringing in business.

Vrooman credits Vancity staff who "worked really hard with our members to ensure that that deposit base was there and to earn [members’] trust."

One dark spot was Vancity’s attempt to raise rates on its lines of credit in the summer. That decision was reversed after members made it clear they were not happy with it.

Keeping rates steady on existing lines of credit "did cost us in 2009," Vrooman said. "But it was more than compensated by the extraordinary transactions and also the activity we had on the mortgage side which occurred later in the year,"

Vancity’s restructuring is now largely behind it.

"We’re now focused on what I think we do best which is growing regionally and having a lot greater focus on our wealth management and our investments division as well as ensuring we bring innovative products on the retail side," Vrooman said.

And there are still lots of opportunity to grow in the Lower Mainland and within the province, she said.

Now, with the new focus, Vancity is getting ready for growth, Vrooman said.

Vancity is Canada’s largest credit union, with almost 415,000 members, and $14.4 billion of assets (largely loans) under management.