Summary Results 4Q 2011

Transcription

1 Ontario Credit Unions and Caisses Populaires SECTOR OUTLOOK 4Q11 February 2012 In This Issue Summary Results.Page 1 Sector Financial Highlights.Page 3 Sector Financial Statements..Page 5 Selected Performance Trends...Page 6 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. Contact Us info@dico.com Summary Results 4Q 2011 Selected Aggregate Sector Performance Indicators As at December 31 st Number of Insured Institutions Number of Members 1,571,366 1,598,309 Regulatory Capital (Aggregate Leverage Ratio) 7.20 % 7.46 % Class 1 Institutions (Leverage) 8.37 % 8.27 % Class 2 Institutions (BIS) % % Liquidity % % Asset Growth 8.80 % 4.87 % Delinquency (greater than 30 days) 1.16 % 1.40 % Year to Date (annualized) Net Interest Income (Financial Margin) 2.51 % 2.53 % Other Income 0.63 % 0.72 % Return on Average Assets (ROAA) 0.51 % 0.44 % Return on Regulatory Capital 6.97 % 6.03 % Efficiency Ratio 80.8 % 82.4 % Capital Aggregate capital increased by $89.6 million during the latest twelve months although the aggregate leverage ratio declined to 7.20% compared to 7.46% at 4Q10. The change is primarily the result of adjustments relating to conversion to the new International Financial Reporting Standards (IFRS) which became effective January 1, 2011 and in particular the accounting treatment of mortgage securitizations and employee benefit plans. Total impact on aggregate sector capital to date is approximately 0.22%. The aggregate leverage ratio for Class 1 institutions increased to 8.37% from 8.27% at 4Q10 while aggregate risk weighted capital (BIS) for Class 2 institutions declined to 13.61% from 14.31%. One Class 1 credit union did not meet the minimum regulatory capital level. Growth Sector assets increased by $2.7 billion or 8.80% in the latest twelve months to $33.8 billion. This higher than normal increase is due in part to the conversion to IFRS and the treatment of mortgage securitization transactions which are now reported on balance sheet (approximately $1 billion). Total loans increased by $2.7 billion (10.6%) and deposits increased by $1.6 billion (5.7 %) in the same period. Off-balance sheet assets decreased by $350 million to $5.2 billion. 4Q11 SECTOR OUTLOOK, February

2 ELECTRONIC PUBLICATION: The Sector Outlook is available in PDF format (readable using Adobe Acrobat Reader) and can be downloaded from the Insured Institution section on DICO s website at NOTE : Income Statement results are based on aggregate year to date annualized information for each institution. Comparative results may not always agree with previously reported information for the same period as a result of additional information received after the reporting date. Results are based on the latest available information as at February 8, Profitability Return on average assets increased to 0.51% from 0.44% at 4Q10. While the low interest rate environment continues to impact on the sector s income with lower loan yields and investment income, credit unions have responded to these challenges by reducing loan costs and lowering operating expenses. Loan costs declined by 5 basis points while operating expenses declined by 10 basis points. As result, the efficiency ratio improved to 80.8% compared to 82.4% at 4Q10. Credit Risk Total loan delinquency declined to 1.16% compared to 1.40% at 4Q10. During the same time, commercial loan delinquency decreased to 2.11% from 2.63%. Loan Mix Personal loans have grown marginally during the last year and as a result, represent a declining portion of the loan mix. In contrast, residential mortgage lending had strong growth of 14.8% or $2.1 billion, due in part to changes under IFRS which retains securitization transactions on balance sheet. This represented approximately $1 billion or half of the growth in mortgage loans. During the same period, commercial loan growth was 7.5%. % of loan portfolio Change % Change in Product ($ millions) Outstanding Loans Personal Loans 11 % 12 % $ % Mortgage Loans 57 % 55 % $ 2, % Commercial Loans 28 % 29 % $ % Agricultural Loans 4 % 4 % $ % Loan Yields Overall loan yields continue to decline mostly due to lower mortgage rates. In contrast yields on personal and commercial loans have increased modestly. Selected Loan Yields (YTD annualized) As at December 31 st Total Loans 4.81 % 4.92 % Personal Loans 6.85 % 6.52 % Residential Mortgage Loans 4.11 % 4.34 % Commercial Loans 5.42 % 5.39 % Agricultural Loans 4.69 % 4.77 % 4Q11 SECTOR OUTLOOK, February

3 Sector Financial Highlights 4Q 2011 ONTARIO SECTOR Selected Bank Information 4Q Q Q 2011 PROFITABILITY Net Interest and Investment Income 2.51% 2.53% 1.67% Loan Costs 0.11% 0.16% 0.18% Other (non-interest) Income 0.63% 0.72% 1.68% T otal Income 3.03% 3.09% 3.17% Total Non-Interest Expenses (Operating Expenses) 2.53% 2.63% 2.11% Net Income/(Loss) before Taxes and 0.50% 0.46% 1.06% Non-recurring & Extraordinary items Efficiency Ratio (% Operating Expenses to Total Income) 83.54% 85.01% 79.80% Efficiency Ratio (% Operating Expenses, before dividends & interest rebates to Total Income) 80.75% 82.43% 66.57% Return on Average Assets (ROA) before dividends etc. 0.61% 0.54% 0.79% Return on Average Assets (ROA) 0.51% 0.44% Return on Regulatory Capital before dividends etc. 8.40% 6.87% 16.53% Return on Regulatory Capital 6.97% 6.03% CREDIT RISK, as at the quarter-end Gross Delinquency greater than 30 days (% of total loans) 1.16% 1.40% Gross Delinquency greater than 90 days (% of total loans) 0.63% 0.83% OFF BALANCE SHEET ACTIVITY Off balance Sheet Assets ($millions) 5,194 5,543 (Includes mutual fund sales and administered loans etc.) Income on Off Balance Sheet Activity ( % Other Income) 12.93% 25.15% OTHER INDICATORS, as at the quarter-end % average assets*, Year to date at... Total Number of Active Insured Institutions Total Assets ($ millions) 33,756 31,026 3,039,999 Average Assets per insured institution ($ millions) Median Assets ($ millions) Regulatory Capital 7.20% 7.46% (as a percentage of net assets) Number of Insured Institutions below 5% Capital 2 7 Liquidity 13.68% 14.31% * Year to date annualized unless otherwise stated. Totals may not agree due to rounding 4Q11 SECTOR OUTLOOK, February

4 Sector Financial Statements Balance Sheet 4Q 2011 ONTARIO SECTOR 4Q Q Q Q 2010 ($000) ($000) (Percentage of Total Assets) ASSETS Cash and Investments 5,204,798 5,132, % 16.5% Personal Loans 2,963,587 2,957, % 9.5% Residential Mortgage Loans 16,070,359 13,995, % 45.1% Commercial Loans 7,777,758 7,232, % 23.3% Institutional Loans 65,649 78, % 0.3% Unincorporated Association Loans 17,440 13, % 0.0% Agricultural Loans 1,127,000 1,065, % 3.4% Total Loans 28,021,793 25,343, % 81.7% Total Loan Allowances 132, , % 0.5% Capital (Fixed) Assets 369, , % 1.2% Intangible & Other Assets 292, , % 1.1% Total Assets 33,756,194 31,025, % 100.0% LIABILITIES Demand Deposits 11,553,281 10,599, % 34.2% T erm Deposits 10,020,199 9,885, % 31.9% Registered Deposits 7,652,313 7,168, % 23.1% Other Deposits 214, , % 0.7% Total Deposits 29,439,809 27,864, % 89.8% Borrowings 1,393, , % 1.1% Other Liabilities 536, , % 1.7% Total Liabilities 31,369,390 28,728, % 92.6% MEMBERS' EQUITY & CAPITAL Membership Shares 75,712 74, % 0.2% Retained Earnings 1,487,257 1,293, % 4.2% Other Tier 1 & 2 Capital 835, , % 2.9% Accumulated Other Comprehensive Income (12,149) 8, % 0.0% Total Members' Equity & Capital 2,386,804 2,297, % 7.4% Total Liabilities, & Members' Equity & Capital 33,756,194 31,025, % 100.0% Totals may not agree due to rounding 4Q11 SECTOR OUTLOOK, February

5 Sector Financial Statements Income Statement 4Q 2011 ONTARIO SECTOR Canadian Chartered Banks ** Percentage of Average Assets * 4Q Q Q 2011 Interest and Investment Income Loan Interest Income 3.82% 4.00% 2.06% Investment Income 0.35% 0.34% 0.74% 4.17% 4.34% 2.80% Interest Expense Interest Expense on Deposits 1.52% 1.65% 0.82% Interest Rebates & Dividends on Share Capital 0.02% 0.02% Dividends on Investment Capital & Other Capital 0.09% 0.11% Other Interest Expense 0.03% 0.03% Other Interest Expense and Dividends 0.14% 0.16% 0.31% 1.66% 1.81% 1.13% Net Interest & Investment Income 2.51% 2.53% 1.67% Loan Costs 0.11% 0.16% 0.18% Net Interest & Investment Income after Loan Costs 2.40% 2.37% 1.49% Other (non-interest) Income 0.63% 0.72% 1.68% Net Interest, Investment & Other Income 3.03% 3.09% 3.17% Non-interest Expenses Salaries and Benefits 1.36% 1.40% 1.10% Occupancy 0.23% 0.26% 0.35% Computer, office & other equipment 0.25% 0.25% Advertising & Communications 0.15% 0.16% Member Security 0.13% 0.12% Administration 0.23% 0.27% Other 0.18% 0.17% 0.66% 2.53% 2.63% 2.11% Net Income/(Loss) Before Taxes and Nonrecurring 0.50% 0.46% 1.06% & Extraordinary items Non-recurring & Extraordinary gains/(losses) 0.08% 0.07% 0.00% Taxes 0.07% 0.09% 0.23% Minority Interests 0.00% 0.00% 0.01% Net Income/(Loss) 0.51% 0.44% 0.81% Average Assets ($000) 32,763,716 30,400,185 $ 2,928,672,000 * Year to date annualized ** Source: Canadian Bankers Association, Detailed Financial Statistics. Totals may not agree due to rounding. 4Q11 SECTOR OUTLOOK, February

6 Selected Financial Trends Selected Performance Trends Selected Growth Trends 4.50% 20.00% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% ROA Financial Margin Gross Margin Operating Expenses Assets Loans Deposits 20.0% Loan Growth 10.00% Loan Yields 9.00% 15.0% 8.00% 10.0% 7.00% 5.0% 6.00% 5.00% 0.0% 4.00% 5.0% 3.00% Personal Mortgages Commercial Total Personal Mortgages Commercial Total 3.00% Loan Delinquencies 0.23% Loan Costs 2.50% 0.21% 0.19% 2.00% 0.17% 1.50% 1.00% 0.15% 0.13% 0.11% 0.50% 0.00% 0.09% 0.07% 0.05% Personal Mortgages Commercial Total 4Q11 SECTOR OUTLOOK, February