Canadian CEO Finds 'Stress' in U.S. Mergers
The merger trend in Canada is based more on traditional conditions as compared to the U.S. variety, which appears to be impacted more from economic stress, the president/CEO of one of Toronto's largest CUs said.
"I think it's safe to say that we have fewer distressed mergers urged on by regulators as you have in your country," said Jack Vanderkooy, president/CEO of the $1 billion DUCA Financial Services CU, which itself disclosed plans for a merger, its first in years, of another Ontario CU.
Small CUs across the provinces, he said, share similar size and economic scale problems as their U.S. counterparts but the Canadian economy has not witnessed the sharp loan losses felt by CUs in the states, said Vanderkooy.
"Mergers continue to take place for the usual reasons--when a replacement cannot be found for a retiring CEO etc," said Vanderkooy. However, the pace of involuntary mergers seems to run at a much faster clip in the U.S. than in Canada.
This week, DUCA Financial Services said it has begun discussions with management of the $160 million Virtual One Credit Union of Mississauga, Ontario for a merger slated for completion by next January.