Vancity and First Credit Union in British Columbia, Canada, have announced their intention to explore a potential merger.
They say the move would strengthen local community banking in the province and enhance member access to financial services in communities on the North Sunshine Coast, Vancouver Island, and Bowen, Texada and Hornby Islands.
The partnership, they add, “will support an innovative vision for the collective future of community banking”.
The move comes amid a growing trend for consolidation in the credit union sector, prompted by the need to achieve scale in the face of increased competition, escalating operating costs, and the need for sustainable organic growt.
“By creating this opportunity together, we have the chance to preserve and grow local community banking,” said Wellington Holbrook, president and CEO of Vancity. “And we’re showing how we can develop a sustainable, resilient and scalable co-operative banking alternative for British Columbia.”
“Vancity shares our values, vision for the future of community banking, and commitment to making a difference,” said Linda Bowyer, president and CEO of First Credit Union. “By uniting our strengths, we will ensure long-term support for our members and communities, both today and in the future.”
The proposed merger is guided by the key principles shared by both credit unions and will strengthen community banking, the organisations add.
First Credit Union says it will maintain its community presence while allowing its members access to an expanded branch network. It is hoped that the partnership will also give First’s members, and the employees serving them, access to Vancity’s wider array of financial products and services, deeper capital, larger networks, and growing technological capacity.
Related: Three major Saskatchewan credit unions explore merger
“The distinct identities of both credit unions will be maintained as will a commitment to local employment,” the organisations add.
Both credit unions will be working with the BC Financial Services Authority (BCFSA) throughout the process to ensure all regulatory requirements are met, and if consent is granted, the merger will ensure continued access to banking services in communities served by First Credit Union.
A joint press statement from the organisations says: “Both credit unions envision the merger as the start of an innovative model for the future of co-operative, community banking across B.C. Both credit unions believe this model can be expanded to enhance community-centred services across the province and to address the needs of members, strengthen local economic resilience, help sustain community identity and local autonomy, and deliver positive social impact.”
Bowyer added: “With Vancity, First Credit Union has a shared commitment to uplifting and strengthening the members and communities we serve. Together, we’re not just expanding access to financial services, we’re creating a future where everyone can thrive.
“This is an exciting new chapter, and we can’t wait to get started on it together.”
Related: Credit unions look at financial squeeze, fintech and mergers
Holbrook said: “Credit unions are more than financial institutions; they power local economic development and return a ton of value back to the community. First Credit Union was the first financial co-operative in B.C., inspiring all credit unions that followed and kicking off the rapid growth of community finance across the province.”
Both credit unions have pledged to share information with members about the benefits of the proposed merger. In accordance with applicable legislation, Vancity’s members will not need to vote on the intended transaction and, as the final stage of approval, First Credit Union members will vote as the entity whose assets are being transferred to Vancity.
Established in 1939, First Credit Union operates in the traditional territories of the Coast Salish Peoples, specifically the K’òmoks, Klahoose, Tla’amin and Squamish Nations and serving the needs of community members in Courtenay, Cumberland, Powell River, Union Bay, Bowser, and on Bowen, Hornby, and Texada Islands.
Vancity is Canada’s largest credit union, with 570,000 member-owners, and more than 50 branches located in Metro Vancouver, the Fraser Valley, Victoria, Squamish and Alert Bay, within the territories of the Coast Salish and Kwakwaka’wakw people. It has $36bn in assets plus assets under administration.
