Finance Credit woes reach Fédération des caisses populaires acadiennes as it reports record profit

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At least one New Brunswick financial institution did not escape the chill when third-party, asset-back commercial paper froze up last summer.

The Fédération des caisses populaires acadiennes recorded a charge of $8.4 million in its 2007 financial statements, 18.28 per cent of its $46.3-million investment in ACBP.

The caisses populaires might recoup this if financial players agree to convert these short-term instruments into long-term debt, federation president Camille Thériault said Monday.

Thériault said he supports the efforts by the Pan-Canadian Investors Committee for Third-Party Structured ABCP, chaired by Toronto lawyer and businessman Purdy Crawford, to salvage more than $30 billion of stranded debt.

Regardless of the outcome, the federation reported an otherwise stellar year with a record profit of $27.7 million before taxes and dividends.

The federation represents 34 caisses populaires - credit unions - in New Brunswick. It is the largest francophone New Brunswick financial institution.

At its annual meeting Friday and Saturday in Bathurst, the federation reported a nine-per-cent increase in interest income to $101 million compared to $93 million in 2006.

Deposits reached $2.3 billion, up 15 per cent from 2006. Total assets grew by 12 per cent to $2.7 billion.

In other words, the caisses populaires can cover any ACBP losses, Thériault said.

"You never like to take a provision," he said. "But even with the provision that we took, $27.7 million is the biggest profit ever of our organization," Thériault said.

"Now we're going to do like everyone else, see what's going to happen in the vote on the Crawford committee and in the end, probably if it goes through, turn our short term into long term and get that money back later on."

"You take a provision because you're not sure, and then we'll see what happens in the longer term," he said.

Subsidiary Acadia Life Insurance Company recorded earnings of $6.6 million, up $1.3 million from 2006.

Acadia Financial Services, mutual fund sales grew by 24 per cent. As of Dec. 31 the mutual fund portfolio totalled $108 million, up 15 per cent.

The federation recorded a $37-million increase for corporate and governmental loans, seven per cent more than in 2006. Consumer loans and other personal loans rose by six per cent or $36 million. Residential mortgage loans rose by 11 per cent or $93 million. Loans before provision for credit losses portfolios grew by $165 million or eight per cent.

The corporate loans portfolio reached $589 million, and the consumer loans and other personal loans $620 million. The residential mortgage loans portfolio exceeds $952 million.

The federation returned $6.8 million in member dividends, 25 per cent more than in 2006. The organization distributed an estimated $2 million in donations, sponsorships and scholarships.

The federation was founded in 1946 as the mouvement des caisses populaires and employs more than 1,200 people. It is headquartered in Caraquet.

At the weekend meetings, the organization renewed Thériault's contract as president for another five years. He is completing his fifth year in this job.