B.C., Ontario central credit unions announce merger

| Business |

The central credit unions of B.C. and Ontario will officially merge
on July 1, creating a new Vancouver-based entity with aspirations to
become a national financial-sector force.

Credit Union Central of
B.C. and Credit Union Central of Ontario will join forces to create
Central 1 Credit Union — providing banking, treasury and trade
services to more than 200 credit unions in the two provinces.

Central
1 chief executive officer Don Rolfe said the merger is a very
significant development because it’s the first step in creating a
national organization that can support credit unions from coast to
coast.

Quebec has its own Caisses populaires Desjardins (Cooperatives –
Desjardins Group), but Rolfe hopes the credit union systems of Alberta,
Saskatchewan, Manitoba and Atlantic Canada will join Central 1 in the
future. He said Central 1 could even work with Quebec on "certain
opportunities" ahead.

"Our focus now is to demonstrate the benefits and capabilities of the merger," Rolfe said.

"We
have spoken to [other credit union systems] but realize they want to
wait and see how it goes before they commit to it. It’s what you would
expect."

The merger has been delayed several times, with the most
recent delay caused by issues surrounding the value of about
$200-million worth of asset-backed commercial paper held by Credit
Union Central of Ontario.

The two sides decided to move those assets into a limited partnership owned by Ontario credit unions.

Central
1’s head office will be in Vancouver, but it will also maintain an
office in Mississauga, Ont. The offices will employ about 500 people,
with about two-thirds of them based in Vancouver.

Rolfe said job
losses from the merger will be minimal because the transaction is a
growth strategy and there are substantial growth opportunities in the
two provinces.

He noted B.C. credit union members enjoy certain
products and services not currently available to Ontario credit unions,
including mobile banking technology.

"That’s an obvious product for us to introduce to Ontario because it attracts a younger audience," Rolfe said.

"Obviously we’re interested in attracting more younger members."

He
said one in three Canadians deal with a cooperative financial
institution, and the merger of the two central credit unions is one way
to offer them more services and get them to do more business at credit
unions.

Central 1 will have nearly $8 billion in combined assets
and will represent credit unions that serve 2.7 million members in B.C.
and Ontario.

B.C. credit unions have about $45 billion in total assets, compared with about $19 billion in Ontario.