Servus Credit Union Ltd. (Servus) continued to report record growth in its second quarter of 2023, having reached $19.1 billion in assets, up $1.2 billion from the same period last year. This growth enabled continued strategic investments, including the intended amalgamation with connectFirst Credit Union (connectFirst).
Second quarter financial results saw strong loan growth, which led to an increase in net interest income. Operating expenses were also higher than the same period last year due to increased investment in member experience and growth-driving initiatives. Overall, net income was 6.9% higher compared with the second quarter last year, demonstrating the success of these initiatives.
“As one of Canada’s Best Managed Companies and one of Canada’s Best Banks, our growth is a reflection of the deep commitment we have to our members,” said Ian Burns, Servus’s President and Chief Executive Officer. “As part of that commitment, we continue to make strategic investments to provide enhanced technology, products and services to fuel our members’ financial fitness. This includes efforts related to the intended amalgamation with connectFirst, which we see as an opportunity to build an even stronger value proposition for members as a joint entity.”
Servus’s year to date results as compared to prior year show:
- Assets grew 6.8% to $19.1 billion
- Deposits increased by 7.8% to $16.0 billion
- Loans grew 8.4% to $17.0 billion
- Retained earnings increased 3.8% to $1.1 billion
- Net income dropped 40.9% to $27.7 million
The results from the first half of the year continue to be influenced by the increase in credit loss provision that occurred in the first quarter, despite this provision expense returning to normal levels in the second quarter. As compared to the first quarter of the prior year, the provision expense increased by $27.0 million, which is directly impacting the year to date net income that is down by the same amount. Despite the pressure that the higher provision expense places on net income, Servus continues to benefit from elevated net interest margin as a result of strong asset growth. The strong asset growth and related interest margin is expected to continue throughout the fiscal year.
Alberta’s economic outlook continues to look promising, with strong commodity prices, stabilizing unemployment levels, and resilient economic growth in the face of high interest rates and inflation. However, labour markets have become saturated and provincial wage increases are lagging behind the national average.
“As Albertans work to balance rising prices, increasing interest rates, and changing real estate prices, we are proud to help members feel good about their money as their financial partner through thick and thin, regardless of what is happening in the world.”
Servus’s commitment to financial fitness extends to the Servus Profit Share® program, where Servus shares its profits annually with members. In 2022, Servus shared a record-setting payout of over $60 million.
About Servus Credit Union Ltd.
Servus Credit Union has served Albertans for over 80 years with a full line of secure financial services. The financial institution has more than 100 branches in 59 communities throughout the province as well as options for online, mobile and telephone banking. Servus’s noble purpose is to help members reimagine their financial fitness, so they feel good about their money. For more information about Servus, call 1.877.378.8728 or visit servus.ca.