Vancouver-based Central 1 Credit Union (Central 1) saw its first-quarter (Q1) profit fall after the Bank of Canada’s surprise rate cut in January contributed to lower gains on investments.

Profit for the quarter ended March 31 was $11.4 million compared with $20.6 million in Q1 2014, announced Central 1, the primary liquidity manager, payments processor and trade association for member credit unions in British Columbia and Ontario, on Wednesday.

During the quarter, the yield curve in Canada flattened and credit spreads narrowed in response to the central bank’s rate cut.

“These factors contributed to net realized gains of $4 million and net unrealized gains of $6.7 million on financial instruments, compared with a total net gain of $20 million the previous year,” Central 1 said.

Net financial income for Q1 2015 was $15.7 million, compared with $27.5 million a year earlier.

Return on average equity of slipped to 4.9% vs 9.4% in Q1 2014, reflecting lower earnings and a higher capital base.

Total assets under administration (AUA) for Central 1 were $13.6 billion in Q1 vs $12.4 billion a year ago.

Meanwhile, B.C.’s credit union system’s total AUA was $62 billion as of Q1, up by $2.7 billion, or 4.5%, vs the corresponding period a year earlier.

The B.C. system earned $78.5 million before taxes in the Q1, down slightly from $79.2 million in Q1 2014.

Deposits were $55 billion at the end of the quarter, up by 4.3% from $52.8 billion in Q1 2014.

Net loans increased by 4.4%, or $2.3 billion, led by commercial and personal mortgages.

AUA for Ontario’s credit union system totalled $37.1 billion at the end of Q1, up by $3.7 billion, or 11.2%, from a year earlier.

The Ontario system earned $35.3 million before taxes in Q1, down from $45.9 million in 2014.

Although financial income improved by 4.1%, non-financial expenses, which include salaries and other operating expenses, increased by 8.6%.

Deposits were $30.6 billion at the end of Q1, up by 8.7% from $28.2 billion year-over-year, while loans increased by 11% to $31.9 billion.