Provincial economic growth drove up B.C. credit unions’ earnings by 29.6% to $380.4 million in 2010, before taxes and dividends, Central 1 Credit Union announced this morning.
That constitutes a record year for B.C.’s credit unions, breaking their previous record of $293.6 million in 2009, according to Central 1, the central financial facility and trade association for B.C. and Ontario credit unions, which represents 45 B.C. credit unions.
Driving the growth was B.C.’s economic recovery, which in turn drove up mortgages and loans to small- and medium-sized businesses, Central 1 media relations manager Art Chamberlain said.
Residential mortgages, which make up nearly 70% of the credit unions’ portfolio, rose $2.1 billion (8.1%) to $28.7 billion. Loans to small and medium-sized businesses – making up nearly 25% of credit unions’ portfolio – were up 3.4% to $10.2 billion.
“When you look at both of those areas, you can see the demand for both of those loans was there,” Chamberlain said.
He added that the numbers reflect a consistent growth trend for the province’s credit unions. That trend, he said, is being driven both by credit unions gaining the necessary size and marketing clout to get their message out and by their active involvement in communities – a stance that he said, “resonates with a lot of people.”
“We’ve been consistently growing, which is partly a reflection of growth of the credit union system in B.C. as well. We’re becoming bigger players and taking market share away from the banks.”
Chamberlain added that while the recession has affected credit unions, as mortgages slowed down and people faced job losses, the sector weathered the downturn “pretty well.”
“We were in a pretty conservative, well-regulated position going into the recession, so we did not get hammered by it in terms of our own business,” he said. “So as the general economy grew we were able to bounce back pretty quickly out of that.”