VANCOUVER, BRITISH COLUMBIA and TORONTO, ONTARIO--(Marketwire - Nov 27, 2012) - Central 1 Credit Union (Central 1) announced its third quarter results today and posted a profit of $25.6 million for the quarter ended September 30, compared to a loss of $26.7 million in the same period a year ago.
Profit for the first nine months of 2012 was $60.6 million, up from $1.3 million in the first nine months of 2011. Interest margin decreased to $30.7 million in the first nine months, compared to $41.5 million in the same period last year, reflecting lower yields.
Despite a deteriorating economic outlook, financial markets remained relatively stable during the third quarter. Credit spreads on provincial and corporate debt narrowed, while interest rate swap spreads widened marginally.
As Central 1 holds provincial and corporate bonds and pays fixed rates on interest rate swaps to neutralize its exposure to interest rates, these market developments had a net favourable impact on its net financial income.
During the third quarter, Central 1 had realized gains of $10.6 million and unrealized gains of $10.3 million, resulting in a net gain of $20.9 million, compared to a net loss of $43.1 million for the previous year. Interest margin for the quarter was $9.5 million, down from $14.1 million during the same period in 2011.
Highlights, compared to the same quarter in 2011, include:
- Profit for the period of $25.6 million, compared to a loss of $26.7 million
- Return on equity of 13.0%, compared to negative 17.0%
- Assets of $14.4 billion, down 2.0% from $14.7 billion
Central 1''s capital ratios remain strong and well within statutory limits. Central 1''s borrowing multiple for federal capital adequacy purposes was 14.0:1, while the percentage of regulatory capital to risk-weighted assets for provincial capital adequacy purposes was 38.1%.
B.C. and Ontario credit union systems
Combined assets of the B.C. system in the third quarter of 2012 rose 5.5%, year-over-year, to reach $56.1 billion at quarter-end.
Combined assets of the Ontario system in the same period rose 15.7%, year-over-year, to reach $30.1 billion at quarter-end, with $1.3 billion of the increase in Ontario system assets attributed to DUCA Financial Services Credit Union Ltd., which became a Class A member of Central 1 on August 24, 2012.
About Central 1
Central 1 is the central financial facility and trade association for the B.C. and Ontario credit union systems. Central 1 represents a consumer-oriented, full-service retail financial system that serves 2.9 million members and holds $86.2 billion in assets and is owned primarily by its member credit unions, 44 in B.C. and 101 in Ontario.
With offices in Vancouver, Mississauga, and Toronto, Central 1 provides a wide range of services such as liquidity management, direct banking, and payment service solutions. For more information, visit www.central1.com.