UCP government promises to ‘clarify’ ATB Financial’s mandate
Crown corporation should provide ‘maximum profitability,’ says Toews
The Alberta government will be pressing Crown corporation ATB Financial to better manage its costs and deliver maximum profits for Albertans, though Finance Minister Travis Toews said Friday the sale or privatization of the institution is not being contemplated.
Contained within this week’s provincial budget is a commitment by the UCP government to “strengthen” the strategic direction of ATB, the Alberta-based financial institution that operates in 247 communities across the province. The budget document says the government will be clarifying ATB’S mandate to manage its business in a commercial and cost-effective manner and avoid undue risk of loss while earning rates of return “similar to, or better than, comparable financial institutions.”
“Right now we’re not contemplating a sale of ATB, but this mandate does speak to the fact that our expectations are, as the owners of ATB, that ATB provide maximum profitability back to the ownership,” Toews told reporters. “We believe there is value in strengthening the mandate on behalf of Albertans.”
Toews provided no further details on the review and did not say whether the provincial government has any concerns about the way ATB is currently operating. According to ATB’S financial reports, the Crown corporation earned a net income of $45.8 million in the quarter ended June 30, 2019, a 215-per-cent increase from the previous quarter but a 20-percent decrease from the same time last year.
ATB Financial had a $44.1-million provision for loan losses in the quarter, something the institution attributes to Alberta’s ongoing economic uncertainty, as well as “the struggles our customers have faced post-recession, as a number of high-dollar energy customer accounts became impaired, along with the entire loan portfolios’ credit quality deteriorating.”
As the largest Alberta-based financial institution in the province, ATB has been uniquely exposed to the challenging economic conditions of recent years, said Joe Ceci, Calgary-buffalo MLA and former
NDP finance minister. But he said the institution has also helped to weather the storm. Under Ceci’s watch, the NDP allocated $1.5 billion to ATB to help it expand the loans they were able to offer to small and mid-sized businesses.
“They were really helpful in that regard,” Ceci said. “Albertans could count on them. Small businesses, large businesses and just regular customers.”
Ceci said he is concerned the UCP government might ultimately try to sell off or privatize ATB. During the spring provincial election campaign, Ceci disclosed that Scotiabank had at one point been interested in purchasing the institution and on Friday he reiterated that point.
“I can tell you when I was the finance minister there were many entreaties and people coming, saying ‘Is ATB for sale?’ And we would say no,” Ceci said. “They play an important part in the needs of Albertans, particularly in rural
areas where they’re often the only storefront (financial institution) around for folks.”
On Friday, ATB Financial provided a statement saying it does not expect the provincial budget to have much of an impact on its operations.
“ATB Financial and the government share a positive working relationship, something that will continue,” the statement said. “ATB remains steadfast in our support of Albertans and Alberta business, just like we’ve done for the past 81 years.”
For the quarter ended June 30, 2019, ATB’S net contribution to the government of Alberta was $73.9 million, an increase of $113.3 million from the previous quarter but a 10.3-per-cent reduction from the same quarter in 2018.
Albertans could count on them. Small businesses, large businesses and just regular customers.