Two Credit Unions merging to serve members better

First Calgary Financial and Chinook Financial to merge Nov. 1

js381 Two credit unions merging to serve users better

What began last year as a collaboration between two of Alberta’s largest credit unions to benefit their members by discovering efficiencies in their respective systems has resulted in a formal merger taking effect Nov. 1.

In 2013, First Calgary Financial and Chinook Financial Ltd., Alberta’s second- and third-largest credit unions respectively, announced a partnership formed on their common goals.

However, as the partnership between the two credit unions grew, it became apparent that, given the marketplace, they could serve members better and compete more efficiently as a single unit rather than as two separate organizations, says Paul Kelly, president and CEO of First Calgary Financial.

Factors such as compliance costs, low interest rates and increasingly stringent regulations led both credit unions to rethink their futures. So, the idea to merge under the banner of Connect First Credit Union was born.

“Both credit unions had the view that we needed a minimum-sized scale to compete in the banking business — and that really was the driver,” says Kelly, who will become Connect First Credit Union’s CEO when the two financial institutions merge.

“Both credit unions are fine, financially, and even in the near-term we felt that we could do well, but for the long-term perspective we believed that a merger was required, just to give us the scale to be able to compete.”

Kelly says an important aspect of the merger process is continuing to find efficiencies in both credit unions’ systems. For example, the technologies used by each credit union can potentially be maximized by working as a single unit, saving costs that can then be redistributed to members.

“More scale gives us more opportunity to be efficient, so that those fixed costs can (be) spread over a larger membership base,” Kelly explains.

While the two credit unions are merging, they’re keeping their respective brand names. Kelly says this is because each organization has worked to build brand loyalty among members, and both First Calgary Financial and Chinook Financial want to retain that familiarity for people.

This is Part 1 of a two-part story. Part 2 will look at the membership benefits of the merger. If you have feedback, please call the New Scoop editorial team at 800-294-0051, ext. 23, or e-mail deron@axiomnews.com.

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