Central 1 Reports Third Quarter 2021 Financial Results
VANCOUVER, British Columbia, Nov. 26, 2021 (GLOBE NEWSWIRE) – Central 1 Credit Union (âCentral 1â or âthe organizationâ) reported continuing operating income of $ 41.0 million for the nine first months of 2021, an increase in profit of $ 18.2 million for the first nine months of 2021, compared to the same period last year. For the third quarter (Q3) ended September 30, 2021, profit was $ 12.8 million compared to profit of $ 20.2 million for the same period in 2020.
âCash continues to be a key driver in Central 1’s finances as we introduce innovative solutions and support our clients who provide banking choice to Canadians,â said Sheila Vokey, Interim President and CEO. “We remain committed to our strategic plan and are well positioned to continue our momentum as we close the remainder of 2021.”
Central 1’s treasury activities have contributed significantly to the organization’s revenue and continue to provide a stable source of short-term market funding to support its members and clients. Along with 16 other key participants, Payments Canada and the Bank of Canada, Central 1 also launched Lynx Release 1, Canada’s new high value payments system. The changes to technology and operations were implemented after more than a year of preparation and are the basis for Canada’s transition to real-time payments.
The organization, together with two implementing partners, successfully launched the first phase of Interac e-TransferÂ® for Business, which will allow the reception of transactions in real time, routed by account number and rich in data. In addition, early aspects of Forge 2.0 have been successfully brought to market, including an improved user interface and design for the Forge 2.0 Retail Online Banking, Mobile App, and Small Business offerings.
Consolidated results for Q3 2021 compared to Q3 2020:
- Profit of $ 12.8 million, compared to profit of $ 20.2 million (excluding discontinued operations) in 2020.
- Assets of $ 13.2 billion, down 7.0% from $ 14.2 billion (excluding discontinued operations) in 2020.
Profit from continuing operations for the third quarter of 2021 was $ 7.4 million lower compared to the same quarter last year. This variance is mainly due to a decrease of $ 12.6 million in net finance income offset by the liquidation distribution of a previous investment in US Central Federal Credit Union (US Central), which resulted in one-time income of 5 C $ 5 million (US $ 4.4 million) received during the quarter. Excluding one-off income received from US Central, non-financial income and non-financial expenses remained relatively stable. Investments in strategic initiatives continued at a lower expected level and remained in line with Central 1’s strategic priorities and plans, resulting in a decrease in spending of $ 5.4 million compared to the same period last year.
Consolidated financial results since the start of the year
Profit from continuing operations for the first nine months of 2021 increased by $ 18.2 million compared to the same period last year, mainly due to an increase of $ 9.8 million in net financial income and a decrease of $ 20.9 million in spending on strategic initiatives. The year-to-date interest margin has improved by $ 2.9 million from the same period last year, as members of credit unions continue to hold high levels of cash in the form of deposits with Central 1, which peaked in early 2021. Realized and unrealized net gains also improved by $ 1.6 million compared to the same period last year, mainly due to movements still favorable interest rate spreads.
Statement of Financial Position
Excluding the assets of discontinued operations, total assets as at September 30, 2021 decreased by $ 0.8 billion and $ 1.0 billion compared to December 31, 2020 and September 30, 2020, respectively, when liquidity of credit unions were near their peak. This resulted in additional deposits placed with Central 1 and has since declined with improving economic conditions.
Profit from cash flow was $ 50.7 million for the first nine months of 2021, up $ 4.9 million from the same period last year, mainly due to the higher of the net financial result. The Treasury had a stable quarter with modest increases in credit union loans and commercial loans. During the same period, deposits declined slightly as members continue to use excess cash to fund new loan growth, driven by the strong housing market in British Columbia and Ontario.
Digital banking and payment platforms and experiences
Digital Banking and Payments Platforms and Experiences (DBPX) recorded a loss of $ 8.4 million for the first nine months of 2021, compared to a loss of $ 20.9 million in the same period l ‘last year. The raise of InteracÂ® Wire transfer volumes contributed to the decrease in loss, reflecting the continued increase in the use of electronic payments. Investments in strategic initiatives continued as planned, in line with Central 1’s strategies and plans, resulting in lower spending year over year.
Central 1’s MD&A and third quarter financial statements have been filed with SEDAR and posted at www.sedar.com and www.central1.com/investisseurs-relations.
About Central 1
Central 1 empowers credit unions and other financial institutions that provide banking choice to Canadians. With assets of $ 13.2 billion as of September 30, 2021, Central 1 provides essential services on a large scale to enable a successful credit union system. We do this by collaborating with our clients, developing strategies, products and services to support the financial well-being of their more than 5 million diverse clients in communities across Canada. For more information, visit www.central1.com.
Caution Regarding Forward-Looking Statements
This press release contains forward-looking statements based on assumptions, uncertainties and management’s best estimates regarding future events. These include, but are not limited to, statements relating to our financial performance objectives, vision and strategic objectives, economic, market and regulatory review and outlook for the Canadian economy and provincial economies in which our member credit unions operate and the impacts of COVID. -19 pandemic, as well as statements containing the words âmayâ, âwillâ, âintentionâ and âanticipateâ and other similar words and expressions. Forward-looking statements are based on the opinions and estimates of management as of the date the statements are made. Actual results may differ materially from those currently expected. Securityholders are cautioned that these forward-looking statements involve risks and uncertainties. Certain material assumptions of Central 1 in forward-looking statements include, but are not limited to, competitive conditions, economic conditions, regulatory considerations, and the impacts of the COVID-19 pandemic. Significant risk factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include economic risks, regulatory risks, risks and uncertainty relating to the impact of the pandemic. COVID-19 and other risks detailed from time to time in Central 1’s Periodic Reports filed with securities regulatory authorities. In view of these risks, the reader is cautioned not to place undue reliance on forward-looking statements. Central 1 assumes no obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws.
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