BC Business
Vancity CEO, Tamara Vrooman, is not afraid to express her nurturing side.
Tamara Vrooman, the CEO of Vancity, is unafraid of appearing "nurturing." It's good business. There is a bit of the earth mother archetype about Tamara Vrooman that, on the surface, seems the slightest bit incongruous with her status as one of Canada’s most powerful women of finance. ?
There is a bit of the earth mother archetype about Tamara Vrooman that, on the surface, seems the slightest bit incongruous with her status as one of Canada’s most powerful women of finance.
The mothering side of the CEO of B.C.’s biggest credit union emerges when she speaks of her six-year-old son, who “is so sweet and still says, ‘I love you, Mom’ and snuggles.” It materializes when Vrooman – who is also a board member of the Streetohome Foundation – discusses the “confounding” homelessness problem and admonishes the business community to shoulder greater responsibility to mitigate this municipal scourge.
Vrooman, 42, is not afraid to express her nurturing side because, as she says, caring for others is simply good business. “Unless all parts of the community come together when there is a community need, then the solutions sometimes aren’t sustainable,” says B.C.’s former deputy finance minister, who became CEO of the corporate-social-responsibility trailblazer three years ago.
But earth mothers – even those heading credit unions – know that the soil they till for the common good needs a rigorous weeding from time to time. And that’s what Vrooman undertook last year to make Vancity more productive, scrutinizing the credit union’s subsidiaries to find ways to free up capital and reduce expenses.
Three subsidiaries were singled out, one a former shining star, Citizens Bank of Canada. Launched 12 years ago, Citizens was Canada’s first online bank. Then Dutch-owned ING Direct Canada burst onto the virtual-banking scene. Unable to compete with ING’s scope and scale, Citizens Bank exited the personal banking marketplace and sold most of its retail loan book to TD Canada Trust in 2009, freeing up a “considerable amount of capital,” Vrooman says.
The credit union also sold Vancity Insurance Services to the Co-operators, transferring its residential, auto, travel and commercial insurance policies. Vancity then sold its mutual-fund business to IA Clarington (IAC), dissolved its Inhance Investment Management subsidiary and now offers advisory services to IAC. This turned a “$5-million yearly operating loss into a $2-million annual revenue boost,” says Vrooman.
In the final tally, Vancity found itself with $65 million in capital to reinvest following the restructuring, due largely to the sale of Citizens Bank. There was a downside too, however: 25 Vancity staff members lost their jobs due to the restructuring.
Overall, Vancity recorded “an extraordinary gain of close to $30 million” for the year, says Vrooman. However, this was balanced by an equal, “extraordinary write-down” on the credit union’s investment in the Dockside Green real estate development in Victoria. Vancity consolidated its investment, taking 100 per cent ownership of the project in 2009 and deferred further real estate development at the site.
As 2009 flickered to a close, Vancity’s earnings reached the second-highest level in its history, says Vrooman, rising 15 per cent over the previous year, despite a decline in revenue of four per cent.
Vrooman is keeping an eye on a proposed amendment to the federal Bank Act that would allow credit unions to operate as banks. There is always the possibility, should the amendment pass, that Vancity could dust off its Citizens Bank charter (which Vancity kept in the sale to TD Canada Trust) and expand east into cutthroat Toronto. Another challenging row to hoe, but one that has this financial earth mother shining up the gardening tools.