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Saturday, November 21, 2009 |
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Saturday, November 21, 2009 |
News Release: May 27, 2009 Record loan growth in challenged economy highlights ATB Financial’s fiscal year Edmonton, Alberta – Record loan results – particularly in its Alberta business portfolio – highlighted a fiscal year that saw ATB Financial (“ATB”) substantially grow its business in spite of the downturn in Alberta’s economy. ATB reported net income of $6.4 million in 2008-09. Net income was $231.2 million before a provision for potential losses on ATB’s holdings of asset-backed commercial paper (“ABCP”) of $224.8 million. This compares to net income last year of $30.0 million, or $283.1 million before ABCP. Gross loans grew by a record $3.2 billion to $22.8 billion, a 16.2-per-cent increase from 2007-08. ATB continued to fulfill its role as a trusted partner of Alberta businesses, as business loans jumped to approximately $9.0 billion, a 21.9-per-cent increase. Total personal and business deposits rose a record $3.2 billion, or 17.8 per cent, to approximately $21.0 billion. “There has been a lot of talk about a ‘credit crunch’, but our results from the past year show that we are more committed than ever to helping Albertans and Alberta businesses,” said ATB President and CEO Dave Mowat. “We produced outstanding loan and deposit results in one of the most challenging economic environments in recent history. That is something our 5,000 associates take enormous pride in, because it is tangible proof of how hard they are working to put Albertans first.” In spite of record loan and deposit growth, net income excluding ABCP was down 18.3 per cent, which reflects the impact of decreases in the prime lending rate, Canada’s competitive deposit market, and increased operating expenses. Operating revenue, excluding ABCP, was $907.0 million, up 7.3 per cent from last year. As part of the Pan-Canadian Investors Committee, ATB played a major role in the restructuring of ABCP, which was completed in January 2009 and converted notes from short-term to longer-term instruments maturing in six to nine years. ATB will continue to revalue its ABCP holdings quarterly until maturity. “The fact that we have remained profitable while absorbing two consecutive years of substantial provisions related to ABCP speaks to the strength and stability of our organization,” Mowat said. “With record loan and deposit growth, increased customer satisfaction scores and record associate engagement scores, ATB associates stepped up their performance when it was really needed.” Mowat noted that ATB’s 5,000 associates met performance targets in 2008-09 and will be paid performance pay, though senior executives’ performance pay will be adjusted as a result of ATB’s decrease in net income. In view of ATB’s net income forecast for 2009-10, performance pay will be reduced by at least 25 per cent for associates and at least 50 per cent for senior executives. “The resilience and resourcefulness of our customers and our associates is quite amazing. 2009-10 will not be an easy year, but Albertans have a persistent streak that always seems to carry them through,” Mowat said.
Operational Highlights Personal and Business Financial Services (PBFS) – ATB’s largest line of business includes branches and agencies throughout Alberta. Assets, primarily consisting of loans, grew $1.6 billion, or 10.6 per cent, over the last year. Operating revenue increased by $16.6 million, or 2.8 per cent. PBFS opened seven new branches in Alberta in 2008-09, including the first branch opened by a major financial institution on an Alberta post-secondary campus, at SAIT Polytechnic. Corporate Financial Services (CFS) – This line of business provides services to Alberta’s mid- and senior-market companies in three sub-lines – Energy, Commercial, and Food & Forestry. CFS’s assets grew $1.5 billion, or 37.2 per cent over the last year. Operating revenue increased last year by $36.6 million, or 37.2 per cent. ATB Investor Services (IS) – This line of business is responsible for growing and protecting wealth for more than 47,000 customers. At year-end, client assets under management and administration were $3.9 billion, down $159.2 million from last year. Operating revenue decreased by $4.7 million, or 10.2 per cent from last year. In 2008-09, IS was rated No. 1 in client satisfaction in Alberta versus the Big Five banks. ATB in the Community – ATB’s associates contributed more than $2.5 million through a combination of charitable donations, fundraising and volunteer time. Highlights included associate-led campaigns for the United Way (through which ATB raised a record of over $611,000), STARS Air Ambulance, Habitat for Humanity, and its Teddy for a Toonie Campaign, through which a record $630,000 was raised for the Stollery and Alberta Children’s Hospital foundations. ATB is also an active sponsor of a wide range of community events and organizations. About ATB Financial – ATB Financial is the largest Alberta-based financial institution, with assets of $26.5 billion. It provides Personal and Business Financial Services, Investor Services, and Corporate Financial Services to more than 670,000 Albertans in 244 communities. It provides service through 164 branches and 133 agencies, telephone and Internet banking, a Customer Contact Centre, and Automated Banking Machines. ATB Financial was established in 1938 and has been a provincial Crown corporation since 1997. This year, it was named one of Canada’s 50 Best Employers by Report on Business Magazine, one of the 75 Best Workplaces in Canada by the Great Place to Work Institute, and one of Alberta’s Top 40 Employers by Mediacorp Canada Inc. For further information please contact: Shawn Ohler |
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