Ontario’s Credit Union Sector continues to remain stable, but are not immune to volatile economy

In its fourth quarterly outlook report for the credit unions and caisses populaires sector, the Financial Services Regulatory Authority of Ontario (FSRA) found that the sector remains stable during this period of global economic volatility, but loan delinquency has increased and there is the possibility that future quarters will see ongoing impacts of inflation and higher interest rates.

Here are some of the key findings:

  • Liquidity in 4Q-2022 remained strong at 10.9% although 400 bps below last year, a time when there was softness in core lines of business.
    Profitability in 4Q-2022 was 43 bps, 13 bps below last year and 3 bps below last quarter. Increases in loan interest and investment income were more than offset by higher interest, borrowing and non-interest expenses.
  • Sector assets totaled $90.8 billion, reflecting a year over year increase of $6.9 billion (up 8.2%). Residential mortgage loans grew $6.9 billion (up 15.4%) but growth has begun to slow as prices and volumes weakened and borrowing costs increased from levels earlier in the 12-month period; commercial loans grew $1.0 billion (up 4.7%) and cash/investments fell $1.4 billion (down 11.8%).
  • Total loan delinquency was 38 bps, up 4 bps year over year and 6 bps from last quarter. This means 0.38% of the loans in this sector were overdue more than 30 days, which is higher than last year at 0.34% and last quarter at 0.32%.

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FSRA continues to work on behalf of all stakeholders, including consumers, to ensure financial safety, fairness, and choice for everyone.

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