More proof this week that if you’re looking for a ‘no lose’ business in this world, you generally can’t go wrong in savings and loans.
Earlier this month, the major chartered banks, starting with Toronto Dominion, got a very black eye when hundreds of their employees came forward with stories about how they were pressured to upsell customers, even though all of the banks were reporting quarterly profits of more than a billion dollars.
Bank shares used to be a blue chip investment, but they have taken a major hit, and the big boys on Bay Street are closing ranks and doing damage control.
Meanwhile, life is just fine at Canada’s credit unions, especially on the prairies. In Manitoba last year, credit unions were second only to the Caisses Populaires in Quebec in terms of the size of their membership and total assets. They control just over a third of the banking business in Manitoba, which is a remarkable turn around when you look at relatively recent history.
In the early 1980’s, when inflation was rampant and interest rates were through the roof, credit unions on the prairies were failing, and they were forced to come cap in hand to government looking for loan guarantees.
Skip ahead to 2017. Manitoba credit unions hold total deposits of just under $25 billion, managing loans of close to $23 billion. The result last year was total profits of more than $126 million.
The foundation of much of their success is in smaller rural communities which were mostly abandoned years ago by the big banks.
The Steinbach Credit Union is the largest in Manitoba, and unquestionably one of the most successful financial institutions in Canada. They control $5 billion in assets, and since 2000 they have paid out almost $40 million in cash-back bonuses to their members.
No wonder that when I drive around the streets of Winnipeg, the most attractive new buildings, belong to credit unions.
I’m Roger Currie