Canada's top credit union Vancity plots bank-focused revamp

financialpost.com:

Canada’s biggest credit union outside of Quebec, Vancity, has historically marketed itself as being “Main Street, not Wall Street” — member-owned, values-led and locally focused.

Close to the top of new chief executive Wellington Holbrook’s agenda is expanding the commercial bank the Vancouver-based credit union quietly owns half a continent away in Toronto, two blocks from Canada’s financial nerve centre of Bay Street.

“We’re always going to be a community-based financial institution that’s focused on our members — but we do own a Schedule I bank,” said Holbrook, referring to Vancity Community Investment Bank, in his first sit-down interview since taking over in January. “We are thinking about what the bank could be for the future, and doing way more with it.”

Holbrook has more incentive to shake things up coming in on the back of Vancity’s worst financial results for years. Vancity posted a $3.3 million loss for 2023, ending a long run of healthy returns. Soaring global interest rates prompted members to shift their money into higher-rate term deposits, which spiked Vancity’s funding costs as the credit union continued to hold lots of loans issued when rates were at record lows.

So Holbrook is on the hunt for opportunities, including a “top-to-bottom” review of the strategy for Vancity’s bank — part of an overhaul he dubs Vancity 2.0 — that could see the unit play a bigger role.

Today, Vancity’s bank mainly provides “niche” business-to-business lending. It’s offered 32 clean energy loans and financing for about 3,400 units of affordable housing to date, according to its website. Its assets were $366 million as of a September regulatory filing — a fraction of the credit union’s $35.5 billion total assets under