Saskatoon, Sask.-based First Nations Bank of Canada reported lower net income for fiscal 2012 as it took on additional staff to manage a new operating system.
Net income for the fiscal year ended Oct. 31, 2012 was $1.24 million compared to a net income of $1.27 million in 2011.
The bank says 2012 income was positively impacted by a net reversal of credit losses and an increase in net interest income, primarily due to loan growth of $11.0 million.
However, the increases to income were offset by an increase in expenses related to a systems transition and the additional employees to manage the new operating system.
“Fiscal 2012 was a time of transition for the First Nations Bank,” said Keith Martell, CEO. “This year was the point when we took the last step toward full independence, through the development and implementation of our own operating system. This prepares us to more fully meet the financial services needs of the Aboriginal market in Canada during the next stage of our growth and expansion” he added.
Total assets at the fiscal year decreased $26.2 million from the prior year end. This decrease was due to a $27.4 million decrease in the total customer deposits, as a result of the timing of cash transactions by some large customers.
The total number of customer accounts, both commercial and personal, continued to grow in fiscal 2012. The decrease in deposits, as well as the $11.0 million growth in loans and a $2.8 million capital investment in bank operating systems, resulted in a $41.6 million decrease in cash balances at fiscal year end. Despite this decrease the bank remains in a strong liquid position, with capital ratios in excess of ‘well capitalized’ regulatory benchmarks.
The bank’s annual shareholders meeting will be held on Thursday April 11 in Yellowknife.
First Nations Bank of Canada is a domestic, federally chartered bank offfering personal and business banking services with a primary focus on Aboriginal customers. It has branches in Saskatchewan, Ontario, Manitoba, Yukon, Nunavut and Quebec.