Financial Services Regulatory Authority of Ontario reports Ontario credit union assets up 4.6% to CAD 98.7bn as margins remain squeezed and mortgage delinquencies rise

The Financial Services Regulatory Authority of Ontario published its Q3 2024-25 Sector Outlook Report, finding that Ontario credit unions continued to grow assets but faced ongoing pressure on profit margins as higher interest paid on deposits more than offset increases in loan interest income and slightly higher investment income. Sector assets totalled CAD 98.7 billion at quarter-end, up CAD 4.4 billion (4.6%) year-on-year, with notable portfolio growth in cash and investments (21%), personal loans (4.3%), residential mortgages (1.8%), commercial loans (4.7%), and agricultural loans (9.8%). Return on Average Assets was 21 bps and flat quarter-on-quarter; while 1 bp higher than last year, FSRA noted a methodology change added 5 bps, implying a 4 bp decline year-on-year on a comparable basis. Thirty-day delinquency on residential mortgages was 72 bps, up 29 bps year-on-year and 9 bps from last quarter. The report also cites a 1.25% reduction in the Bank of Canada benchmark rate over four months as a factor expected to support profitability recovery, while warning that a subdued economic outlook may continue to weigh on near-term asset growth; FSRA also updated Q2 2024 financial highlights to adjust net interest income and net income for Dividend in Retained Earnings.