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ATB stands by customers as Alberta economy begins to turn corner

Posted on: May 25, 2017

Edmonton—Loans held steady, deposits grew, assets climbed, loan loss provisions lightened, and net income returned to health during ATB Financial’s fiscal year ending March 31, 2017.

“It’s not news to anyone that the structural changes to the economy that Albertans faced in 2016 made it, financially speaking, one of the worst years in the history of the province,” said ATB President & CEO Dave Mowat.

“It’s a different world taking shape, the rate of growth is slower than what we have previously experienced in Alberta, but we are turning the corner.”

While profits have not yet returned to the record mark achieved two years ago, ATB’s year-end results reflect an economy that is again finding its stride.

Overall, ATB earned a net income of $150.8 million, up from the previous year’s level of $108.1 million. The key reason for the rise in profit was a decline in loan loss provisions, which fell from $387.6 million in the previous year to $235.0 million. The $235.0-million provision is a conservative estimate of possible loan losses that ensures the results reported reflect risk that may be present in the Alberta economy. Actual loan write-offs for the year were $187.0 million.

“Even when things were at their worst, our team members didn’t panic, we didn’t change our credit criteria,” Mowat said. “We listened to our customers, we heard what they needed and we went to work with the faith that when we eventually turned the corner, we’d still be in it together.”

“In that sense, this last year has been vintage ATB.”

Loans stood at $40.8 billion, up from $40.4 billion the year before. Deposits grew from $30.9 billion to $33.9 billion, an increase of 9.9 per cent year over year.

ATB’s operating results were led by its Corporate Financial Services business, which posted net income of $221.9 million, a bounceback from $31.2 million the year before. ATB Investor Services’ net income jumped 15 per cent year-over-year to $36.0 million. ATB Business & Agriculture authorized 12,263 loans to small and mid-sized businesses during the fiscal year, worth a total of $3.0 billion. That helped Business & Agriculture post net income of $66.5 million for the fiscal year, down from $110.8 million the previous year.

“ATB’s decision to stand shoulder to shoulder with our business and agriculture clients is reflected in those numbers,” said Mowat. “Now, we expect those numbers to grow, just as the numbers in Corporate Financial Services grew after we didn’t flinch in that area of our business.”

In May 2016, a wildfire in Fort McMurray displaced more than 90,000 residents, destroyed 2,000 homes and buildings, and left behind almost $9 billion in damage. ATB’s Disaster Relief Assistance Program, formed and administered by ATB’s Retail Financial Services business, helped 1,974 customers with deferred loan payments, temporary overdrafts or overdraft protection, Mastercard payment relief and account fee waivers.

During the fiscal year, ATB welcomed 24,291 new customers, bringing the number of ATB customers to 725,961. Among that number were those first-time customers holding 2,524 new mortgages, as ATB continued its legacy of helping Albertans realize their goal of owning their own homes.

ATB’s commitment to serving customers meant opening the doors to two ATB Entrepreneur Centres, one in Calgary, the other in Edmonton, to support business owners as they plan and start to grow their dreams. As well, ATB forged a unique arrangement with Cashco Financial to offer alternatives to payday loans and to provide better banking services to Albertans not properly served by traditional financial institutions. And ATB also established Four Directions, an ATB agency serving primarily homeless citizens in an inner city Edmonton community and using innovative biometric technology to replace the need for more traditional types of identification.

ATB demonstrated its passion for transforming banking by joining a small group of banks and financial institutions that offered customers Apple Pay for credit and debit cards. ATB was the first financial institution in Canada to make a crossborder payment using blockchain technology, and the first full-service financial institution in North America to successfully facilitate payments using chatbot technology on Facebook Messenger. As well, ATB released a new mobile banking app and unveiled Prosper, an innovative platform that tailors online investing and saving advice to a client’s needs.

ATB donated $3.3 million to charities, spent $7.8 million on community-focused sponsorships, and fundraised $1.5 million through corporate social responsibility initiatives. Those donations included corporate matching to ATB’s annual Teddy for a Toonie campaign, which raised $804,000 for the Stollery and Alberta Children’s Hospital foundations. ATB team members also donated $703,000, including corporate matching, to the United Way.

ATB was named the second-best place to work in Canada in 2017 by the Great Place to Work Institute. Team member engagement reached the record-high 89 per cent.

For complete financial results, including management’s discussion and analysis, click here.

For more information or to schedule an interview, please contact:

Glenn Kubish
ATB Financial

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