Ontario Credit Unions and Caisses Populaires
SYSTEM OUTLOOK 3Q08
INSIDE
Summary Results……………….….……………………………………………Page 3
Financial Highlights………….. ………………………….……………….…. ..Page 4
System Financial Statements………………………………………………….Pages 5 and 6
December 2008
The information presented in this report has been prepared using a variety of sources, including unaudited reports submitted to DICO by Ontario’s credit unions and caisses populaires. While DICO believes that the information contained in this report would be useful to readers, and considers the financial statements to be reliable, their accuracy and completeness cannot be guaranteed. Ce document est également disponible en français.
Electronic Publication:
Note: Income Statement results are now based on aggregate year to date annualized information for each institution. Comparative results have been restated to reflect this change. Results are based on the latest available information. Comparative results may therefore not always agree with previously reported information for the same period as a result of additional information received after the reporting date.
Summary Results 3Q08
Selected Aggregate System Performance Indicators / As at September 30th2008 / 2007
Regulatory Capital (Total) / 7.12% / 7.25%
Class 1 Institutions (Leverage) / 8.49% / 8.71%
Class 2 Institutions (BIS) / 13.20% / 13.72%
Liquidity (Gross) / 14.25% / 13.18%
Asset Growth / 7.8% / 5.4%
Delinquency (greater than 30 days) / 1.14% / 0.96%
Year to Date (YTD annualized)
Net Interest Income (Financial Margin) / 2.61% / 2.85%
Other Income / 0.83% / 0.78%
Return on Average Assets (ROAA) / 0.37% / 0.40%
Return on Regulatory Capital / 5.17% / 5.59%
Efficiency Ratio / 85.8% / 84.6%
Capital: Aggregate capital increased by $97 million during the latest twelve months. Aggregate regulatory capital declined to 7.12% compared to 7.25% at 3Q07. Aggregate capital (leverage) for Class 1 institutions is 8.49%while aggregate capital (BIS) for Class 2 is 13.20%.
Growth: Assets increased by $2.0 billion or 7.8% in the latest twelve months to $27.8 billion. Total loans increased by $1.5 billion or 7.2% while deposits increased by $1.9 billion or 8.2% in the same period. Off-balance sheet assets declined marginally in the latest quarter and declined by $280 million year over year to $5.0 billion.
Profitability: The return on average assets (ROAA) increased to 0.37% compared to 0.34% at 2Q08 and 0.40% for the same period in 2007. The year over year decline in net income is primarily the result of lower interest rates which led to a decline of 0.24% decline in the financial margin. This was partially offest by an increase in other income and a reduction of 0.12% in operating expenses. The efficiency ratio declined marginally as a result of lower revenue.
Credit Risk: In the latest twelve months, loan costs have declined to 0.11% compared to 0.13% at 3Q07 although gross delinquency has increased to 1.14% compared to 0.96% at 3Q07.
Loan Mix: The loan mix has changed modestly as a result of continued strong commercial loan growth and slower growth in residential mortgage loans and personal loans. Commercial loans now account for more than 26% of total loans compared to 14% for personal loans.
Product / % of loan portfolio / Change($millions) / % Change in Outstanding Loans
2008 / 2007
Personal Loans / 14% / 15% / ($23) / (1%)
Mortgage Loans / 56% / 56% / $771 / 6%
Commercial Loans / 26% / 25% / $725 / 14%
Aricultural Loans / 4% / 4% / $40 / 5%
Loan Yields: The overall loan yield declined marginally due to slightly lower overall interest rates and a gradual shift away from higher yielding personal loans.
Selected Loan Yields (YTD annualised) / As at Sep 30th2008 / 2007
Total Loans / 5.95% / 6.16%
· Personal Loans / 8.52% / 8.74%
· Mortgage Loans / 5.12% / 5.08%
· Commercial Loans / 6.38% / 6.61%
· Agricultural Loans / 5.92% / 5.90%
3Q08 SYSTEM OUTLOOK, December 2008 Page 3
Financial Highlights 3Q08
3Q08 SYSTEM OUTLOOK, December 2008 Page 4
System Balance Sheet 3Q08
3Q08 SYSTEM OUTLOOK, December 2008 Page 5
System Income Statement 3Q08 (with Industry comparison)
3Q08 SYSTEM OUTLOOK, December 2008 Page 6