The value of services produced by chartered banks, trust companies, caisses populaires and credit unions, increased in 2005 at their fastest rate since the turn of the millennium, Statistics Canada said today.

The increase was stemmed from robust growth across most business lines, the government agency sadi.

In total, these deposit-accepting intermediaries produced services worth $61.7 billion, up 6.8% from 2004. This was the fastest annual rate of growth since 2000 when the high-tech boom fuelled growth of 10.6%.

Services recorded strong growth across all business lines, except for the fiduciary services portfolio, which was last year’s weakest performer. There was also a substantial drop in net interest income in the treasury and investment banking services portfolio.

Fiduciary services continued to be consolidated into larger wealth management portfolios, which included broader investment banking services.

Financial settlements related to a high profile business failure and other transfers to international operations affected some intermediaries. Both weighed negatively on the treasury and investment services portfolio.

Net interest income increased a healthy 4.5% to $31.8 billion last year. This growth reflects strong gains in revenue across lending, deposit and investment businesses. These gains occurred despite low interest rates and a narrowing of the gap between interest rates charged to borrowers and those paid to depositors.

Non-interest income recorded a strong 9.4% increase to $30 billion. Revenue from fee-based services in the corporate segment was fuelled by widespread growth in volume. As well, self-directed brokerage, full-service brokerage and mutual fund business experienced strong growth. Higher levels of issuing securities of credit card receivables in a process known as securitization also contributed to this notable growth.

In addition, deposit-accepting intermediaries increased their provision for credit losses by 64.3% to $2.5 billion last year. Provisions for credit losses reflected changes that management expected in losses from impaired loans and other credit instruments.

StatsCan noted that the year-over-year growth in this account was exaggerated by high levels of loss recoveries in 2004. Although economic conditions were favourable in 2005, higher volumes of personal and corporate loans as well as recorded losses pushed provisions for credit losses higher.