VANCOUVER, B.C., Aug 23, 2019 – Central 1 Credit Union (Central 1) today announced its second quarter 2019 financial results. Financial income more than doubles to $28.7 million, up $15.7 million compared to the same period last year, driven by strong Treasury performance.
Higher earnings support the significant investments in strategic initiatives that continued throughout the second quarter of 2019. This is consistent with Central 1’s long-term strategic plan to deliver digital banking, payments modernization, expand treasury services, and continue delivering on core products and services.
Central 1 is accelerating the development of our Forge Digital Banking platform to enable our clients across Canada to create market-leading customized experiences for their customers. During the quarter, Central 1 secured many additional Forge client commitments giving Canadian financial institutions access to the tools and capabilities that come with the Forge platform. Forge implementation activities also expanded beyond the Champions to broader client availability.
Activities in the second quarter led to two additional milestones for Forge this summer. On July 31, Alterna Bank was the first to release the Forge-based mobile app. On August 1, we launched the full retail suite on Forge comprising a public website, mobile banking app and online banking capabilities. This means all three Forge services are now in active use across Canada. BC-based First West Credit Union is the first to release all three retail channels.
“We’ve had a strong second quarter. Our Treasury team has performed well, generating strong earnings, and we continue to invest in digital banking and payment solutions for our clients,” said Mark Blucher, President and CEO of Central 1. “With the rollout of our full retail suite on Forge, we’re creating a competitive edge for credit unions and other financial institutions. Our clients across Canada can now offer their members leading digital banking experiences. Central 1 is building momentum and making good strategic progress.”
Central 1’s second quarter results reflected strong net financial income of $28.7 million, up $15.7 million at the same period last year. The securities portfolio continued to show strong net realized and unrealized gains as decreasing market yields and narrowing credit spreads drove up the fair value of securities.
Prior year’s comparative quarter results benefited from one-time gains of $37.1 million relating to transactions surrounding Central 1’s equity investments. Excluding these one-time gains, profit after tax for the second quarter of 2019 was $9.2 million higher than the same period a year ago.
Second quarter highlights compared to the same period last year:
- Profit after tax of $12.7 million, compared to $1.3 million, after excluding the one-time gains of $37.1 million reported in the same period last year. This represents a return on average equity of 4.5 per cent, compared to 2.2 per cent in 2018.
- Net financial income of $28.7 million, up $15.7 million from $13.0 million.
- Assets of $17.9 billion, down 7.3 per cent from $19.3 billion.
Consistent with the second quarter results, decreasing market yields and narrowing credit spreads led to a $32.1 million increase in net realized and unrealized gains. Previous changes in our asset mix contributed to stronger interest margin in 2019. Year-to-date financial income was $38.7 million higher compared to the same period in 2018. Prior year’s year-to-date results benefited from one-time gains relating to transactions surrounding our equity investments. Excluding these one-time gains, profit after tax for 2019 was $36.5 million higher than a year ago.
About Central 1
Central 1 is a preferred partner for financial, digital banking and payment products and services – fuelling the success of businesses across Canada. With $17.9 billion in assets, we leverage our scale, strength and expertise to power progress for more than 250 credit unions and other financial institutions, enhancing the financial well-being of more than 5million customers from coast to coast. For more information, visit www.central1.com.
Caution Regarding Forward Looking Statements
This press release contains forward-looking statements based on assumptions, uncertainties and management’s best estimates of future events. These include, without limitation, statements contain the words “may,” “will,” “intends” and “anticipates” and other similar words and expressions. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made. Actual results may differ materially from those currently anticipated. Security holders are cautioned that such forward-looking statements involve risks and uncertainties. Certain important assumptions by Central 1 in making forward-looking statements include, but are not limited to, competitive conditions, economic conditions and regulatory considerations. Important risk factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include economic risks, regulatory risks and other risks detailed from time to time in Central 1’s periodic reports filed with securities regulators. Given these risks, the reader is cautioned not to place undue reliance on forward-looking statements. Central 1 undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws.
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Central 1 Credit Union
Chief Investment Officer
Central 1 Credit Union
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