Le Lézard
Classified in: Business, Covid-19 virus
Subject: EARNINGS

Central 1 reports fourth quarter and 2020 results


VANCOUVER, British Columbia, Feb. 26, 2021 (GLOBE NEWSWIRE) -- Central 1 Credit Union (?Central 1' or ?the organization') reported a profit after tax of $36.1 million for the year ended December 31, 2020, a $1.9 million increase in profit after tax of $34.2 million in 2019.

Central 1 has consistently maintained strong operational resilience to support credit unions in B.C. and Ontario. In 2020, the organization made significant and immediate changes to support our employees, members and clients during the pandemic. Central 1 focused on maintaining essential products and services, while delivering core business functions for the credit union system and clients.

"Central 1 delivered solid earnings during an uncertain macroenvironment driven by the global pandemic. Our strong balance sheet and diverse business lines are a testament to the strength and resilience of our business and our ability to effectively operate and progress our strategic initiatives in a challenging environment," said Sheila Vokey, Central 1 Interim President and CEO. "Our success is underpinned by our people who have been unwavering in their commitment to support our members and clients."

Treasury and Mandatory Liquidity Pool
Treasury continues to deliver strong and consistent contributions to Central 1 earnings. Treasury reported an increase of $27.3 million in profit after tax, primarily driven by a $19.0 million increase in net financial income. In addition to a strong financial performance in 2020, liquidity at Central 1 continues to be robust as deposits remain at an all-time high, increasing by over $5.2 billion during 2020.

On January 1, 2021, Central 1 successfully transitioned the Mandatory Liquidity Pool (MLP) from a deposit structure to an investment structure, representing a significant change in liquidity management for the credit union system in B.C. and Ontario. The initiative ensured the MLP is bankruptcy remote and creditor-proof while maintaining a cost-effective and capital efficient structure for the credit union system to manage its liquidity, drive market confidence and comparability, and ensure the system and individual credit unions continue to thrive.

Digital & Payments Services
As the reliance on digital banking solutions increased this year due to the impact of COVID-19, Central 1 focused on streamlining and accelerating its Digital Banking Platform launches and product enhancements. The organization empowers clients to confidently meet the changing demands facing their organizations.

Central 1 received strong support from its members on its payments strategy which is designed to position the credit union system and financial services industry for growth and innovation. In addition, Central 1 launched its Payments Customer Advisory Council (Payments Council) to maintain strong collaboration between Central 1 and its payments clients.

Central 1 processed 1.8 million Interac e-Transfer® transactions on behalf of Canadian credit unions and other financial institutions, totaling almost $760 million. The organization also facilitated a total of 28,000 Canada Emergency Business Account applications worth over $1 billion in loans during 2020.

2020 consolidated financial results compared to 2019

Despite the impact from the pandemic, Central 1's consolidated results in 2020 reflected a $1.9 million increase in profit after tax from 2019. Excluding MLP results, Central 1's 2020 results saw a profit after tax of $33.8 million, up $27.1 million from the previous year. Strong growth in Central 1's investment portfolios combined with the reduction in external debt, due to a significant increase in deposit funding from credit unions, contributed to a $15.1 million increase in interest margin from 2019. Since the first quarter of 2020, credit spreads continued to narrow to levels experienced prior to the COVID-19 pandemic, resulting in an increase of $7.5 million in net realized and unrealized gains from 2019. 2020 results also reflected higher Interac e-Transfer® volumes due to increased usage of online payments during the pandemic and a lower spend on corporate expenditures and strategic initiatives. The combined impact of these movements led to strong financial results.

The MLP reported a profit after tax of $2.3 million in 2020, down $25.2 million year-over-year. The lower yield curve and higher demand for short-term investments in anticipation of MLP segregation led to the $18.0 million reduction in interest margin within the portfolio.

Fourth quarter 2020 compared to fourth quarter 2019

Statement of financial position
Total assets as at December 31, 2020 were $23.1 billion, an increase of $5.2 billion from December 31, 2019, of which $4.1 billion was in the securities portfolios due to strong growth from member credit union deposits. Deposits at Central 1 remain at an all-time high, reflecting elevated liquidity within the credit union system.

Central 1's 2020 Management's Discussion and Analysis and Financial Statements have been filed with SEDAR and posted at www.sedar.com and www.central1.com/investor-relations.

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 assets of $23.1 billion as at December 31, 2020, (following MLP segregation on January 1, 2021, total assets were $14.0 billion), 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 5 million 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 relating to our financial performance objectives, vision and strategic goals, the economic, market and regulatory review and outlook for the Canadian economy and the provincial economies in which our member credit unions operate and the impacts of the COVID-19 pandemic, as well as statements that 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. Securityholders 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, regulatory considerations, and the impacts of the COVID-19 pandemic. 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, risks and uncertainty from the impact of the COVID-19 pandemic 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.

Contacts Media
Ian Colvin
Head of Communications
Central 1
T 236 688 6594
E [email protected]

Investors
Brent Clode
Chief Investment Officer Central 1
T 905 282 8588 or 1 800 661 6813 ext. 8588
E [email protected]



These press releases may also interest you

at 02:00
C.K. McWhorter, chairman of the McWhorter Foundation, voices concerns over outdated perspectives in corporate leadership, exemplified by recent remarks from Nelson Peltz regarding Disney's film direction. After encountering instances of racism and...

at 02:00
OKX, a leading crypto exchange by trading volume and a leading Web3 technology company, has issued updates for March 29, 2024. OKX...

at 00:25
Shanghai Junshi Biosciences Co., Ltd ("Junshi Biosciences," HKEX: 1877; SSE: 688180), a leading innovation-driven biopharmaceutical company dedicated to the discovery, development, and commercialization of novel therapies, announced its financial...

at 00:24
In the news release, Roborock Reports 2023 Full Year Financial Results, issued 28-Mar-2024 by Roborock over PR Newswire, we are advised by the company that in the first bullet point of "Growth across Product Categories", the USD amount should read...

28 mar 2024
Royal Bank of Canada ("RBC") today announced it has completed the acquisition of HSBC Bank Canada ("HSBC Canada"). "Today marks one of the most exciting times of our 155-year history and a pivotal milestone in our long-term growth story as we...

28 mar 2024
The opening ceremony of the Boao Forum for Asia (BFA) Annual Conference 2024 was held in Boao, south China's Hainan Province on Thursday, with China's top legislator Zhao Leji stressing China's economic potential, appealing to international investors...



News published on and distributed by: