Executives at Meridian Credit Union Ltd. were discussing growth plans at a strategy session about five years ago when an outside advisor asked a pointed question: How could they achieve their goals without paying more attention to the Greater Toronto Area?
For the leadership of Ontario’s biggest credit union, which had a strong presence in other areas in the south of the province, such as the Niagara region, the realization came as a jolt.
But the discussion evolved into a plan to expand its footprint in a GTA market dominated by Canada’s big banks. Since then, the credit union has gone from around five branches in the Toronto area to nearly 20.
“We said the GTA is a strategic growth market for us, and we want be focused on moving that forward,” said Bill Maurin, president and CEO of Meridian, in an interview this week with the Financial Post. “Building branches was one part of that. Building a digital channel was one part of that. And certainly building the right community partnerships is another key piece.”
Another piece of that strategy fell into place Monday, when Meridian announced a 15-year, $30.75-million strategic partnership with Civic Theatres Toronto (which has rebranded as TO Live), that will see Toronto’s Sony Centre for the Performing Arts renamed Meridian Hall in September.
While the money involved is far less than the $800 million over 20 years Bank of Nova Scotia is paying as part of a deal that included the naming rights to Scotiabank Arena — home of the Maple Leafs and Raptors — it continues Meridian’s push onto Big Bank turf.
“Our market share in total is obviously small compared to the banks, but on a relative basis, we are acquiring a greater percentage … than a lot of our competitors are,” Maurin said.
Meridian had 91 branches, more than 300,000 members and $20.6 billion in assets under management as of the end of last November. It is also making progress in opening a Canada-wide bank of its own, called “motusbank,” and has been adding approximately 25,000 net new customers annually in recent years, Maurin said.
Meridian’s gains have come as credit unions across Canada have slowly but steadily been increasing their assets, growing market share and adding to their workforces.
According to the Canadian Credit Union Association, their share of domestic assets rose to 7.1 per cent of the market in 2017 from 6.1 per cent in 2008. In deposits, credit unions increased their market share to 8.5 per cent from 8.1 per cent.
They have also been adding workers. The Conference Board of Canada’s 2018 report card on Toronto’s financial services sector showed that employment among credit unions in the city increased at an average annual growth rate of 5.4 per cent from 2007 to 2017, from 1,053 in 2007 to 1,784 employees in 2017.
We can’t blanket the city with 200 branches or anything like that.… The branches we’ve opened to date, we’ve had strong initial market impact and ongoing success
Bill Maurin, CEO, Meridian
According to its latest annual report, Meridian opened five new GTA locations in 2017, but its footprint still pales in comparison to the network run by the deeper-pocketed big banks.
“We can’t blanket the city with 200 branches or anything like that,” acknowledged Maurin. “We were able to do the market research to find the type of folks that would resonate with what the Meridian brand is all about. So we’re really happy. The branches we’ve opened to date, we’ve had strong initial market impact and ongoing success.”
Despite its decision to slap the Meridian name on a building that is just a short walk away from the big banks’ offices on Bay Street (“the largest soft-seat theatre in Canada,” the Sony Centre’s website notes), Maurin says the credit union’s decision-making is more concerned with its members.
“Were we trying to do a ‘Hey-look-at-us’ to the banks? No. Absolutely not,” he said. “We don’t base any of our business decisions on that.”