Branch closures new reality for credit unions
In a decision its CEO says reflects broad changes in the financial services industry, Saskatchewan’s largest credit union shuttered 12 branches last year, reducing its reach into rural Saskatchewan for the first time since 2009.
“Urbanization is a reality in Saskatchewan and we are seeing some communities where a minimum volume of business simply didn’t exist,” Affinity Credit Union CEO Mark Lane said Tuesday, a day ahead of the financial institution’s annual general meeting.
Affinity, the country’s eighth largest credit union, operated 66 branches in 57 Saskatchewan communities at the end of 2015. By comparison, a period of rapid expansion found the financial institution running 76 branches in 68 communities the year before.
Lane said “exponential growth” in electronic transactions — roughly 66 per cent last year, compared to 50 per cent in 2012 — has reflected changes in the way people use financial institutions. At the same time, urban population growth has reduced the demand for multiple rural branches.
“It’s more about the community than it is about the credit union … Certainly, this was not a cost-cutting move, per se, as much as it was recognizing the changing habits of members,” Lane said.
Despite cutting the number of branches it operates, Affinity Credit Union’s membership grew last year, expanding to 135,000 from 134,000 in 2014. The credit union crossed the 100,000-member threshold in 2013, following mergers with other Saskatchewan credit unions.
Affinity Credit Union also posted “solid” financial results in 2015, with assets under management growing 11 per cent to $5.9 billion, Lane said. The Saskatoon-based credit union reported an 8.4 per cent increase in deposits, a 7.4 per cent jump in loans and three per cent profit growth, which expanded to $32.7 million from $31.7 million in 2014.