MGMT 3076- MANAGING FINACIAL INSTITUTIONS

BARBADOS PUBLIC WORKER’S CO-OPERATIVE CREDIT UNION

&
VISION CREDIT UNION
P.E.A.R.L.S HISTORICAL COMPANY ANALYSIS

Done by:
Torrian Chase - 416000925
Richad Beckles - 416001152
Shaquille Smith - 416001299
Andre Harewood - 416002824
Kason Monrose - 416002177

Lecturer- Mr. Gregory Hinkson

March 22nd, 2019
Contents
Executive Summary.............................................................................................................................2
The Barbados Public Worker’s Co-operative Credit Union Ltd- Overview...................................3
Vison Credit Union Ltd-Overview.....................................................................................................4
PEARLS ANALYSIS...........................................................................................................................6
PROTECTION................................................................................................................................6
Effective Financial Structure..........................................................................................................7
Vision Credit Union.....................................................................................................................7

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 Executive Summary

The main aim of this project was to perform a financial investigation between the

Barbados Public Workers Co-operative Credit Union limited and Vision Credit union in

Canada. All sources of funds and financial statements from Vision Credit union were

translated from Canadian to Barbados dollars in favour of a fair comparison. PEARLS

Analysis ratios were utilized in order to perform a financial investigation between the

financial statements of both Credit Unions. PEARLS stand for Protection, Effective Financial

Structure, Asset Quality, Rate of Return, Liquidity and Signs of growth. Within this

assessment various ratios of each category were used.

Barbados Public
Workers Co-
Operative Credit
Union- Overview
The Barbados Public
Workers Co-operative
Credit Union Limited has
been the largest credit

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union in Barbados since
1970. The BPWCCUL has
five (5) branches across
Barbados; Belmott
Road Bridgetown,
Emerald City, St.Philip,
Black Rock and Mile & A
Quarter. From last years
consolidated annual
report, the credit union
has an asset value of
approximately $1.4
Billion.
In 1968 the Civil Service
Association Trade Union

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(which represented the
majority of civil
servants in Barbados)
form a Savings Society.
A year after, being
registered as a credit
union
became the main
objective. This objective
was achieved on May 6
th
, 1970 when The
Barbados
Civil Service Association
Credit Union Limited was
registered. However, it
wasn’t until in 1977
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when the name changed
to The Barbados Public
Workers’ Co-Operative
Credit Union Limited
(BPWCCUL) in an
attempt to broader its
bond of membership. As
of today, membership in
this
credit is open to all
Barbadians, residents
and non-residents.
The Barbados Public
Workers Co-operative
Credit Union offers a
variety of products and
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services to its members.
These include products
such as Thrift Club for
children, saving
accounts, Investment
accounts, Loans and
Mortgages (Vehicle
Loans, Student loans,
Personal
Loans, Mortgages),
Deposits/Payment
Accounts and services
such as Financial
Educational
Units (Service to
members to assist them
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in setting and attaining
financial goals and
achieving
economic stability),
Legal Services and
Wedding Services. In
addition, BPWCCUL has
a Capita
Financial Service that
was acquired in 2010

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The Barbados Public Worker’s Co-operative Credit Union Ltd- Overview

The Barbados Public Workers Co-operative Credit Union Limited has been the largest

credit union in Barbados since 1970. The BPWCCUL has five (5) branches across Barbados;

Belmott Road Bridgetown, Emerald City, St. Philip, Black Rock and Mile & A Quarter. From

last years consolidated annual report, the credit union has an asset value of approximately

$1.4 Billion.

In 1968 the Civil Service Association Trade Union (which represented the majority of

civil servants in Barbados) form a Savings Society. A year after, being registered as a credit

union became the main objective. This objective was achieved on May 6th, 1970 when The

Barbados Civil Service Association Credit Union Limited was registered. However, it wasn’t

until in 1977 when the name changed to The Barbados Public Workers’ Co-Operative Credit

Union Limited (BPWCCUL) in an attempt to broader its bond of membership. As of today,

membership in this credit is open to all Barbadians, residents and non-residents.

The Barbados Public Workers Co-operative Credit Union offers a variety of products

and services to its members. These include products such as Thrift Club for children, saving

accounts, Investment accounts, Loans and Mortgages (Vehicle Loans, Student loans, Personal

Loans, Home Equity Loans, Season Lines of Credit, Unsecured Lines of Credit, Share

Secured Loans, Mortgages), Deposits/Payment Accounts and services such as Financial

Educational Units (Service to members to assist them in setting and attaining financial goals

and achieving economic stability), Legal Services and Wedding Services. In addition,

BPWCCUL has a Capita Financial Service that was acquired in 2010.

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 Vison Credit Union Ltd-Overview

Vision Credit Union Limited (VCU) was first incorporated in 1950 as Camrose

Saving & Credit Union Limited to serve East Central Alberta residents. At that time the credit

union accumulated a total of 21 members and had $178 in assets.

Sixteen years later, Vision Credit union open its first branch office in Edberg and

membership had increases to approximately 1,122 members. Quickly after the first branch

was open, the credit union open another branch in Camrose as well as two more in Stettler

and Coronation. This took VCU total number of branches to four.

In 1984, VCU combined with Vegreville District Savings & Credit Union and

Flagstaff Credit Union before changing their name to Battle River Credit Union. The credit

union further expanded their branches to a total of eleven in 2000 when they became owners

of seven banks of Montreal Branches. With this expansion, the credit union had 17,000

members and an asset value of $579 million. Later in that same year the credit union was

awarded “Credit Union of the Year” award and again in 2008.

It wasn’t until May 1st ,2014 when the credit union name changed to Vision Credit

Union after The Battle River Credit Union merged with Caisse Horizon Credit Union. This

merge allowed VCU to gain six more branches serving Northern Alberta Region. As of today,

the credit union has 17 branches with an asset value over $1 Billion and serves approximately

23,000 members as membership is open to residents of Alberta who is 18 years or older.

Vision Credit Union offers a variety of Products and Services to its members.

Products are offered in four (4) groups; Consumer, Agriculture, Commercial and Education.

Consumer consist of products such as residential mortgages, home equity line of credit,

personal line of credit, personal loans & RRSP loans. The Agriculture group consists of 4-H

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member loans, agriculture line of credit, agriculture mortgages and machinery & input loans.

The Commercial consist of two products; commercial lines of credit and commercial

mortgages. Finally, the education group consist of student revolving line of credit. The VCU

also offers four types of Insurance; Group Life & Health Insurance, Loan & Mortgages

Protection, Travel Insurance and Term Life, Whole Life and Universal Life.

In addition, VCU provides Investment Services through Credential Asset

Management Inc, personal services that contributes to the growth and prosperity of the

communities it serves and financial services in rural as well as urban areas.

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 PEARLS ANALYSIS

PROTECTION

The protection or “P” part of the PEARLS analysis is a set of ratios used in order to

acknowledge that members have a safe place to deposit their money. This is measured by 5-6

crucial ratios which evaluates the quality of the loan portfolio, financial investments,

management and adequacy of provisions. A decision was made to use P6 out of the 6 crucial

ratios. P6 will be used to calculate the solvency of the Credit Unions.

Protection Goal
P6 -Solvency (Net Value of Assets/Total >= 100%
Shares & Deposits)

Solvency refers to a company’s ability to meet its long term financial obligation or in

other words pay its debts. In relation to P6, this measures the worth of one dollar in member-

client savings after adjusting for known and probable losses.

This ratio was done for a 5-year period (2013-2017) to measure the credit unions

ability to meet their long-term financial obligations or to pay their debts. In analyzing the

ratios of BPWCCUL, their ratios were 11%, 11%, 13%, 11% and 12 % respectively. This

suggest that BPWCCUL was lacking solvency over the 5 years analyzed.

In comparison with Vision Credit Union, they had a ratio of 15% in 2013 and 13% from

2014-2017. This also means that this credit union was also insolvent over the 5-year period

analyzed.

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Effective Financial Structure
The Effective financial Structure helps to enhance institutional solvency, Liquidity

and Profitability. These 4 Efficiency Ratios were used to evaluate Vision Credit Union and

Barbados Public Worker’s Credit Union.

Vision Credit Union 2017 2016 2015 2014 2013

E1 70-80% 82% 84% 83% 77% 74%
E5 70-80% 88% 88% 88% 88% 86%
E7 10-20% 6% 6% 6% 6% 7%
E8 Minimum 10% 6% 6% 6% 6% 7%

BPWCUUL 2017 2016 2015 2014 2013

E1 70-80% 83% 82% 81% 81% 81%
E5 70-80% 87% 85% 83% 82% 81%
E7 10-20% 0.0077 0.0077 0.0079 0.0081 0.0082
E8 Minimum 10% 9% 9% 9% 9% 8%

Efficiency Ratio E1 Vision Credit Union ratio for E1 is calculated by “Net

Loans/Total Assets”. The following percentages were calculated between 2013 to 2017:

74%, 77%, 83%, 84%, 82%. The desirable standard for this ratio is set at 70%-80% and over.

Vision Credit Union were within the recommended range for the years 2013 and 2014 and

over average for 2015, 2016 and 2017 respectively therefore concluding that they are

performing up to standard. In contrast the Barbados Public Workers Credit Union were all

above average from 2013-2017 with the following ratios: 81% in 2013, 81% in 2014, 81% in

2015, 82% in 2016 and 83% in 2017 respectively.

Efficiency Ratio E5 This ratio assesses the percentage of total assets that are

financiaed by the savings of the memebers the optimal range for this ratio is Between 70%-

80%. The results from this ratio can be depicted from the above table. From the evidence

provided we can conclude that both Vision Credit Union and Barbados Public Workers Credit

Union are doing above average

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 Efficiency Ratio E7 This ratio evaluates the members share capital against assets.

The recommended range for this ratio should be held between 10%-20%. For the The

Barbados Public Workers Cooperative Credit Union the results were under 10% suggesting

that they are extremely low in contrast to Vision Credit Union. Vision credit union were also

below the expected requirement meaning that both credit unions were below.

Efficiency Ratio E8 Both Credit Unions are depicted as below the average range of

10%. The Barbados Public Workers Credit Union were below the average at a constant rate of

1% while Vision were below by either 3% or 4%. This indicates that both credit unions were

operating below the standard of 10%

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Asset Quality
BPWCC
U Vision Credit Union
A2 <= 5%
2017 3% 2%
2016 3% 1%
2015 3% 1%
2014 3% 1%
2013 3% 1%

ASSET QUALITY RATIO 2: Vision

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