(Edmonton, AB) – Servus Credit Union responded quickly and effectively to the needs of members, employees and communities during the second quarter of fiscal 2020, launching many measures to help Albertans when the pandemic struck a province already struggling with a weak economy. As expected, the pandemic and slow economy impacted the credit union’s financial results for the quarter.
"Our credit union was originally formed by people working together to support their communities and each other through challenging and uncertain times like this," stated Garth Warner, President & CEO of Servus Credit Union. "This is a time when our founding principles are as important as they were when our credit union was first created to serve its members, employees and communities."
In response to the COVID-19 pandemic, since March Servus has:
- Offered a suite of COVID-19 financial relief programs to support members including mortgage and loan deferrals and Mastercard® relief options.
- Supported more than 7,500 members through their mortgage deferral financial relief program.
- Deferred payments on more than $4 billion in personal and business loans, while also making arrangements to avoid compounding interest charges.
- Connected members with government programs:
- Approved and funded more than $198 million in Canadian Emergency Business Account (CEBA) loans.
- Processed approximately 7,400 registrations for the CRA’s direct deposit for the Canadian Emergency Response Benefit (CERB), Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Student Benefit (CESB).
- Reached out to members, especially seniors, regularly to provide financial advice and help.
- Strategically closed some branches temporarily in order to keep other branches open and protect the health of members and employees.
- Re-assigned employees to the Member Contact Centre, giving us the ability to reduce and maintain call response times to under a minute on average during the peak of the pandemic.
- Implemented ongoing deep disinfecting, physical distancing and other safety measures in all branches and offices.
- Continued to engage all Servus employees in serving members, with no layoffs.
- Provided more than $2.4 million in additional pay to Servus employees between March and May to recognize them for their important work throughout the COVID-19 pandemic.
- Implemented protective measures including sanitizing, shields, masks, access control and distancing in branches.
- Donated $10,000 to the Wood Buffalo Food Bank in response to floods impacting Fort McMurray in April.
- Donated $50,000 to support distress centres that operate Alberta’s 211 helpline, an initiative of United Way.
- Earmarked $1 million to help Albertans feel good again about their health and finances as we emerge from the pandemic.
- Continue to remain responsive to unique community needs and expect to spend a total of $2 million this year.
While Servus was stepping up for Albertans, the impact of the pandemic and weak economy resulted in net income of $15.0 million for the period of February 1 to April 30, 2020, a decline of 34.1% from the same quarter in FY2019. The biggest factor in the lower income figure was a significant increase in loan loss provisions. Loan loss provisions do not indicate actual loan defaults, but are funds set aside in anticipation of possible higher than budgeted losses based on how the economy is performing.
"We knew we would be impacted by COVID-19, so these results aren’t a surprise," explained Mr. Warner. "Years of careful cost management and building capital reserves above requirements have given us the capacity to weather this situation without radical measures. At the same time, we have been able to effectively support our members, employees and communities when they needed us most. I am confident we can continue to serve our members well, but we will need to exercise good judgment and financial discipline in the uncertain times still facing us."
Key performance indicators (all figures compare Q2 2020 to Q2 2019):
- Assets grew 3.3% to $16.8 billion.
- Net income (after dividends, patronage and taxes) fell by 34.1% to $15.0 million.
- Deposits increased by 2.6% to $13.5 billion.
- Loans expanded by 1.0% to $14.7 billion.
- Retained earnings were boosted by 4.3% to $948.2 million and our capital is well over the legislated requirement.
"It’s our mission to help our members feel good about their money," says Mr. Warner. "But at a time like this, we know their primary need is to first feel good about their health and wellbeing. In order to make a positive impact for both our members and for Alberta, we’ve created the Servus Feel Good Movement™. We’re aligning our community investment, financial services and employee initiatives to support this new movement."
View the Q2 financials on our 2020 performance page.
About Servus Credit Union Ltd.
At Servus Credit Union we're building a better world, one member at a time. We've been shaping the financial fitness of Albertans for 80 years with a full line of secure financial services. We help members manage their money wherever they are through 100 branches in 59 communities; online, mobile and telephone banking; and 1900 no-fee ATMs across Canada. We re-invest our profits in our members and the communities we serve.
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Servus Credit Union