In a year marked by a global pandemic, declining interest rates and other economic challenges, Servus’s financial performance in 2020 demonstrates the importance of focusing on supporting members, and the long-term commitment to prudent cost management and building capital reserves.
“Although we didn’t expect a global pandemic to the scale we are experiencing, Servus came into 2020 prepared to support our members through it all while maintaining a strong financial position,” said Garth Warner, President & CEO of Servus Credit Union. “There is much that we faced this past year that we didn’t expect, but I am extremely proud of our credit union, our employees and our members for the ways we have all come together to overcome so many challenges.”
“I am most proud of how we’ve been able to support our members — both financially and personally. Financially, in addition to financial relief programs, we were able to maintain our annual commitment of sharing our profits with members.”
“We were there for our members personally, too. While we worked to help them with their banking needs we were also able to check in personally with many members, giving them some hope and social contact. In particular, we established a seniors outreach program early in the pandemic which was recognized by a Minister’s Senior Service Award from the Government of Alberta.”
Key performance indicators (all figures compare FY20 to FY19):
- Net income (after dividends, patronage and taxes) fell by 39.6% to $60.1 million.
- Assets grew by 5.9% to $17.3 billion
- Deposits increased by 5.5% to $13.9 billion.
- Loans expanded by 2.1% to $14.8 billion.
- Retained earnings were boosted by 4.9% to $954.3 million and our capital is well over the legislated requirement.
- Provision for credit losses increased by 128.5% to offset the risks of higher expected losses and economic performance.
Due to the economic impacts resulting from COVID-19, net income is down 39.6%. Despite the drop in income, total revenue is down only 3.4%, demonstrating that the fundamentals of the business remain resilient, strong, and able to respond to the economic uncertainties generated by the pandemic.
The biggest factor in the lower income figure is a significant increase in provision for credit losses — these do not indicate actual loan defaults, but are funds set aside in anticipation of higher expected losses based on how the economy is performing. Additionally, we’ve also seen members’ spending patterns change, resulting in a reduction in transaction volumes and associated revenues. Despite these income challenges, Servus was able to further build upon our already strong capital position, ensuring we will remain financially sustainable long into the future.
Servus returns millions to members and Alberta communities
A testament to Servus’s commitment to its members and communities, Servus continued to share its profits with members through their annual profit share program, while also giving more than $1.7 million to charitable organizations throughout 2020.
In December 2020, Servus returned $54.4 million to members in cash and dividends — a record $33.3 million in Profit Share Rewards® cash, $4.7 million in investment share dividends, and $16.3 million in common share dividends.
About Servus Credit Union Ltd.
At Servus Credit Union we’re building a better world, one member at a time. We’ve been shaping the financial fitness of Albertans for more than 80 years with a full line of secure financial services. We help members manage their money wherever they are through more than 100 branches in 59 communities; online, mobile and telephone banking; and 1900 no-fee ATMs across Canada. We re-invest our profits in our members and the communities we serve. For more information, call 1.877.378.8728 or visit servus.ca.