Credit Union Merger Proposed

Launi Skinner, First West Credit Union CEO
Launi Skinner, First West Credit Union CEO

Two of B.C.’s largest credit unions are considering becoming one to help ensure their long-term survival in the increasingly competitive financial services industry

First West Credit Union, B.C.’s third-largest credit union as measured by assets under administration, and Island Savings, the ninth-largest, say they are in “exploratory discussions.”
Island Savings, with 16 branches across Vancouver Island and the Gulf Islands, would become part of First West, which has 40 branches across B.C.’s mainland under the Envision Financial, Valley First and Enderby & District Financial brands.
The companies say there would be no layoffs or branch closures if the deal goes through, and that Island Savings would keep its brand and “Island community focus.”
Together the two companies would have a combined portfolio of $9.9 billion in assets under administration and about 271,000 members. That’s after folding in Island Savings’ 100,000 members and $2.8 million in assets under administration.
The combination would help secure First West’s third-place position, behind first-ranked Vancouver City Savings (best known as Vancity) and second-place Coast Capital Savings.
The combined credit union would also be the fifth largest in Canada.
The companies site greater geographic reach, which would allow them to “better weather local economic challenges or pressures,” as reasons for the proposed deal.
“Together our credit unions will have greater resiliency to market fluctuations and be more agile in meeting our members’ needs today and into the future,” says James McKenzie, board chair of Island Savings.
To further convince his members that it’s a good deal, McKenzie goes on to note that by being part of the First West family, Island Savings would have access to larger financial resources. That, he says, will be good news for local Island businesses.
Credit unions are facing increased competition from Canada’s large banks as they continuously try to lure customers to their branches through special promotions and premium credit card service that offer air miles and other rewards.
The combination of financial resources will also increased lending capacity for small- and mid-sized businesses, another target market for financial institutions.
A report released in the spring by the Canadian Federation of Independent Business (CFIB) shows small and medium-sized businesses prefer credit unions to Canada’s big banking institutions. Naturally, the big banks fought back with their own data showing they’ve increased credit to a growing numbers of these companies.
“Our vision for the future is to be the first choice for Island businesses. But we can only do that if we can provide these businesses with the lending facilities they need,” says McKenzie. “With First West’s financial backing, our ability to lend to Island businesses increases significantly over what we’re able to do today.”
The Island Savings clients will also get more non-banking services such as auto financing and auto leasing.
Island Savings membership will get a chance to vote on the proposed deal early next year.