1. Year in Review
Looking back on 2018, first and foremost I wish to acknowledge and thank Talka’s dedicated staff and Board for making it a very busy and prosperous one. Without their combined efforts the accomplishments listed below would not have been possible.
On the financial front, Talka’s net income after taxes amounted to $582,693 which represents an 8.1% improvement over 2017. I should also highlight that Talka’s interest rebate distribution to members was $475,263 in 2018 or 15.3% higher than last year.
Growth in total assets was a modest 2% but double-digit growth is often not sustainable in the long term due to its negative effects on regulatory ratios such as liquidity and capital. On that front, Talka was able to strengthen its capital base and increase its capital ratio from 7.2% to 7.5% while reducing its liquidity ratio from 20.4% to 17.6% in 2018. When Talka takes in member deposits but is not able to put the money out in loans and mortgages, the excess is invested in shorter term investments. Not having enough liquidity would prevent the credit union from granting any new loans but having too much usually results in lowering the credit union’s net interest income.
2. Strategic Initiatives
Each year the Board performs a SWOT analysis to analyse the strengths, weaknesses, opportunities and threats after careful consideration of the competition, economy, regulatory environment and technology trends to determine which direction the credit union should chart a course towards. The outcome of this strategic planning process is a high-level plan for management and staff to develop specific action plans and deliver on these initiatives.
- The list below summarizes some of the strategic initiatives that were completed in 2018;
- Two banking system projects to improve security and automate posting of daily clearing files
- Introduced new credit and debit cards with flash or tap functionality
- FX Notes, a new foreign currency offering for those travelling abroad
- IFRS 9 Loan Allowance to meet new accounting standards
- DICO Monthly Information Return to address data requirements of Ontario credit union’s regulator
- New VOIP telephone system to increase the number of incoming lines and add individual extensions and voicemail boxes so that members can directly speak with the staff member they choose
3. What’s Coming in 2019
Talka is very excited about its’ rollout of a new website with enhanced search engine optimization (SEO) features and digital marketing opportunities. As whose seeking financial services more easily adopt digital banking and move away from traditional bricks and mortar banking, Talka must keep pace with these trends. A fresher looking website will better appeal to the millennial generation and we will continue to add new features and content as we go.
Further investments in technology infrastructure projects to upgrade Talka’s back office support are also a strategic priority in 2019. A total computer hardware refresh is required since the existing server, printer and shared network are out-of-date.
To enhance our FINTRAC compliance regime, Talka has also purchased new Anti-Money Laundering software and engaged Central 1 as its CAMLO service provider.