Northern Savings Credit Union has sold a money-losing technology company and has reduced the size of its Prince Rupert head office staff.

Northwestern B.C. credit union scales back

Gone is money-losing technology company; head office size also reduced

  • Oct. 25, 2015 8:00 p.m.

NORTHERN Savings Credit Union has laid off 12 of its 44 Prince Rupert head office employees now that it has sold off a money-losing stand alone technology services company and is reducing the size of its southern B.C. mortgage portfolio.

The latter two moves means there is a reduction in head office activity, says interim credit union chief executive officer Barry Delaney in explaining the lay offs.

“We’re making a prudent move to go back to being the traditional credit union that we are,” he said last week.

The stand alone technology company, Solutions Only of Victoria, with 31 employees, was sold last month to CGI Group Inc., a huge technology services company, and Northern Savings has now signed a contract for it to provide technology services.

Delaney said Solutions Only was costing Northern Savings money and it didn’t fit into its core business which is servicing credit union members.

Solutions Only was built by Northern Savings from the ground up years ago when the economy in the north was tough and another revenue source was needed.

“I don’t fault the people who did that at the time,” said Delaney. “But we should have done a strategic review five years ago. The economy has changed. By keeping that company as long as we did, it was a financial drag on the credit union.”

Moving into the southern B.C. mortgage business, primarily around Victoria and in the Okanagan, in 2004 was also viewed as a way to diversify revenue when the northern economy was in tough shape.

But the value of that portfolio, which is approximately $450 million, has now grown too large for Northern Savings which has an asset base of just under $1 billion, Delaney said.

“In terms of size, it was about the same size as the rest of the credit union put together,” he said of mortgage portfolio held outside of the north.

“With that, the risk is high. This is a matter of risk management,” said Delaney.

Reducing that risk means selling approximately $150 million of the credit union’s southern B.C. mortgage portfolio.

Delaney did note that when interest rates were higher prior to the economic downturn of 2008-2009, the mortgage business brought in strong returns.

The partial sale of its southern B.C. mortgage portfolio will bring in a profit but it will not be enough to cover the write down of the technology company sale, Delaney added.

“But our members should know we have strong reserves. We are not in a deficit situation,” he said.

“We just couldn’t have these financial drags. It’s the members’ money.”

Northern Savings noted its 75th anniversary this year and traces its roots back to 1940 when several smaller credit unions were formed in Prince Rupert and on Haida Gwaii.

Those credit unions merged over the years becoming Northern Savings in 1995 and, a year later, the credit union expanded into Terrace.

It acquired the Terrace and District Credit Union in 1996.

Delaney was brought in as the interim CEO earlier this year, replacing Ken Doleman who ran the credit union for three years.

A search for a permanent CEO continues.

 

 

 

 

 

Just Posted

College buys a yurt to boost student success

Round tent-like structure part of college instructional shift

Soup kitchen sees “groundswell of community support”

Donations toward looming tax bill push non-profit back in the black

Terrace husband and wife honoured for saving each other’s lives

BC Ambulance presented each a Vital Link Award for separate incidents of CPR

Council supports lobby for fair share of cannabis tax revenue

The City of Terrace is throwing its support behind a West Kelowna… Continue reading

Airport registers modest passenger increase

Manager anticipates further growth in 2018 as expansion project nears completion

REPLAY: B.C. this week in video

In case you missed it, here’s a look at replay-worthy highlights from across the province this week

VIDEO: Dramatic video shows return of B.C. snowboarders

Two snowboarders were rescued near Rossland, B.C. on Sunday after being lost overnight.

Tom Brady leads Patriots back to Super Bowl, top Jaguars 24-20

New England to face winner of Sunday night’s game between Minnesota and Philadelphia on Feb. 4

Liberals quietly tap experts to write new paternity leave rules

Ideas include creating an entirely new leave benefit similar to one that exists in Quebec

Insurers say Canadian weather getting hotter, wetter and weirder

Average number of days with heavy rain or snow across Canada has been outside norm since spring 2013

Final phase of MDMA-assisted psychotherapy trials to kick off in B.C.

Doctors hope to get psychedelic-assisted psychotherapy legalized in Canada and the U.S. by 2021

VIDEO: Thousands join women’s march events across B.C.

Today marks one year since the first Women’s March on Washington

Two Canadians, two Americans abducted in Nigeria are freed

Kidnapping for ransom is common in Nigeria, especially on the Kaduna to Abuja highway

Are you ready for some wrestling? WWE’s ‘Raw’ marks 25 years

WWE flagship show is set to mark its 25th anniversary on Monday

Most Read