We power progress for credit unions to successfully enhance the well-being of Canadians.

Board of Director’s Report

Rick Hoevenaars

Central 1 members, including those who comprise the Board, face a time of change and opportunity, and I want to thank all of you for your input and voice throughout 2016 as we work towards a new structure to support the credit union network across Canada.

As we all know, the pressures on the credit union business model continue to increase, and Central 1 needs to be prepared to challenge and shift the status quo, and contribute to a future that will continue to support the financial well-being of Canadians.

Central 1’s Board members have the significant task of helping to drive the organization forward and giving direction to Central 1 in a way that fulfills their fiduciary duty, while making decisions that will have a long and lasting impact for our members, their members, our network, and our employees.

In 2016, Central 1 began a process of deeper engagement about what the desired future of the second tier of the Canadian credit union system, or network, could look like. In Spring, Central 1 circulated a first discussion paper on the Future State of the credit union support system as a catalyst to start a conversation across our network and our country.

Feedback on the questions put forth in the paper during in-person and virtual consultation sessions provided us with valuable perspectives on the issues and the trade-offs that need to be dealt with if we are to move forward successfully.

This input created the pillars of a second discussion paper, If not now, when? which recognizes the requirements of credit unions, and also outlined some of the challenges that will need to be addressed as we move forward from theory into implementation into the future of a newly imagined second tier.

A significant element of this discussion is a national payments strategy. In November, the CEO Payments Strategy Committee released a proposal on a future organization and structure. As a key part of a successful Future State, Central 1 continues to be committed to the vision of a restructured payment business to gain greater efficiencies and new innovations.

The Committee has done a great deal of work to articulate this vision, and Central 1 will continue to have robust discussions with the group in a way that we anticipate will create a payments structure to best benefit the credit union system. Our Board also has a fiduciary duty to ensure that such a transaction is in the best interests of Central 1 and our members.

As the largest shareholder of Credit Union Central of Canada, Central 1 continues to work with the Canadian Credit Union Association in supporting their success in key strategic functions, which we believe is an important step in continuing to create a national entity that can meet the expanding needs of credit unions.

Finally, the Board would like to commend Don Wright and the Central 1 staff on a successful year in 2016. We know it’s been a year of serious evaluation, reflection and completion of a significant work load, and your efforts are greatly appreciated. Your contributions to Central 1 and the credit union network are continuing to make a positive difference.

President & CEO Message

Don Wright

Looking back on 2016, I am quite proud of the progress Central 1 has made in supporting the success of our credit union members. We have now finished the second year of our three-year strategic plan. That plan was built around the concept of member-centricity – working with our members to understand their unique and collective needs, and leveraging our scale and expertise to anticipate and deliver the solutions that credit unions want so that they, in turn, can serve their members’ needs. All with the ultimate objective of enhancing the well-being of Canadians.

Year over year, our Member Voice survey has told us that our efforts to better meet member needs are resonating, as the satisfaction and value results improved over 2015 results. We continue to innovate new products and services and build partnerships across the financial services industry to provide the type of solutions demanded by consumers today.

New and improved product offerings included expanded omni-channel solutions, and Open Anywhere™, developed by Central 1, enabling prospective credit union customers to open and fund new accounts online in minutes, using their mobile, tablet or desktop devices.

We take our fiduciary responsibility very seriously to manage and grow members’ assets that they entrust to us. Our financial position remains strong. At the end of 2016, Central 1’s total assets were $17 billion, up from $14.9 billion the year before. Our net income after taxes was $57 million, compared to $52 million in 2015.

A significant focus of 2016 is where we are headed as a credit union system, and in particular, how the second tier of centrals and other entities meant to support credit union success needs to evolve to reflect a dramatically changing landscape. We engaged our members through our Future State consultative process, and heard from you that to survive we need to move forward thoughtfully, but with urgency. Some first significant steps were working with Canadian Credit Union Association and Credit Union Central of Saskatchewan to transition Marketing & Research and Government Relations to better support the national platform and credit unions across the country.

While I am proud of what Central 1, working with its members, accomplished in 2016, I know much more needs to be done. Many of the robust conversations with members and other stakeholders to define what members need and how they need us to deliver it has culminated in a cultural shift at Central 1. In 2016, we reframed our purpose into our ‘why’ and we outlined our values – how we execute our plans. Our vision continues to be Canadian credit unions’ most valued and trusted partner; at Central 1, it’s clear to all of us that we are here to power progress for credit unions to successfully enhance the wellbeing of Canadians. We look forward to demonstrating our values of courage, collaboration and curiosity as we fulfill our role to power the progress of credit unions. We thank all of our credit union members for your continued feedback, input and participation in our network as we move forward.

2016 Financial Targets Achieved

Central 1 reported strong financial performance for 2016. Profit for the year increased 8.8 per cent over last year, and return on equity exceeded financial objectives. We continue to work to meet our strategic priorities to be a liquid, well-capitalized, financial institution that generates a return for the benefit of our members. Increased use of our innovative digital banking products also benefits our member credit unions, which in turn helps them advance investment in their communities.