February 28 2008 Media Release
Vancity posts record asset growth in 2007 while profits down
Focus on members, employees and communities key driver of success
Vancouver, BC, February 28, 2008 – Double-digit growth resulting in record assets and a prudent approach to capital management were instrumental in Vancity weathering an otherwise turbulent year in the financial sector.
Vancity’s membership continued to grow in 2007 while the addition of 10 branches and its ongoing support of community groups through the Shared Success program further entrenched Vancity’s presence in the community.
The best interests and values of members, employees and the community continue to be a key priority for Vancity’s chief executive officer Tamara Vrooman. “Profit is not the only benchmark by which we measure success. It’s about balance—we’re not going to drive profits and our bottom line at the expense of those we serve.”
Total assets experienced a 14.8 per cent increase, up $1.8 billion from $12.3 billion in 2007 to amount to a record $14.1 billion.
2007 net earnings were $28.3 million, down from $45.3 million in 2006, primarily as a result of the Vancity Group’s write-down of asset-backed commercial paper (ABCP).
In 2007, the Vancity Group held approximately $77 million of asset-backed commercial paper through Citizens Bank of Canada, a subsidiary of Vancity. These holdings represented 0.3 per cent of Vancity’s total consolidated asset base.
Vancity assigned a one-time write down of $13.9 million in the ABCP held by Citizens Bank.
A small number of Vancity members privately held $5 million in ABCP. Shortly after the August 13 system-wide freeze of trading, Vancity made the decision to guarantee the liquidity and value of those members’ ABCP investments.
“Throughout our history we have upheld the belief that it is important for us to be there for our members,” comments Vrooman. “Our commitment to building trust and long-term relationships provides the strength and stability to withstand the ups and downs, like market volatility, that come along.”
Every year, Vancity has given back a portion of net profits—30 per cent since 2000—to members and communities through the Shared Success program. Based on 2007 net earnings, $8.9 million will be shared with members and community groups. Since 1994, close to $138 million has been distributed, including more than $46 million in community contributions.
Vancity’s membership increased by more than 33,000 members, or nine per cent, to total 387,762, with nearly 14,000 from the merger with Van Tel/Safeway Credit Union.
Vancity expanded its community presence with three new branches opening in Langley, Burnaby and Tsawwassen. Another seven locations were added from the Van Tel/Safeway merger, including Vancity’s first branch in New Westminster.
In 2007 Vancity also entered into merger negotiations with Greater Victoria Savings with members voting in favour of the merger which will result in additional branches in Victoria as well as insurance operations.
“This was a year of many accomplishments,” says Patrice Pratt, chair of Vancity’s Board of Directors. “From opening new branches to launching innovative financial products, it has been a busy year. The board is proud of our 2,600 dedicated employees who made it all happen.”
About Vancouver City Savings Credit Union
Vancity is Canada's largest credit union, with $14.1 billion in assets, close to 390,000 members, and 59 branches throughout Greater Vancouver, the Fraser Valley, Victoria and Squamish. Vancity owns Citizens Bank of Canada, serving members across the country by telephone, ATM, and the Internet. Both Vancity and Citizens Bank are guided by a commitment to corporate social responsibility and to improving the quality of life in the communities where we live and work.