Three months of merger negotiations between Abbotsford, B.C.-based Prospera Credit Union and North Vancouver-based North Shore Credit Union ended in failure on July 30 when Prospera’s board of directors decided to pull out of the process.
“We realized that at this time the merger with North Shore just didn’t make sense for us,” Prospera chair Karen Laing told her credit union members in a letter. “We felt that the momentum we have gained over the past little while has us poised for prosperity and that leveraging that from within, rather than through a merger at this time, was a better option for us.”
The proposed merger, which was announced April 17, would have created B.C.’s third-largest credit union, with more than $4 billion in assets, 28 branches in the Lower Mainland and Interior, 100,000 members and about 800 employees.
As it stands, Prospera is B.C.’s fourth-largest credit union, with $2.3 billion in assets, 16 branches in the Lower Mainland and Interior, and 60,000 members, while North Shore Credit Union has $2 billion in assets, 12 branches and 40,000 members.
The idea for a consolidation came about as a result of Prospera’s search for a new CEO earlier in the year. During the search, North Shore president and CEO Chris Catliff emerged as a short-list candidate.
When Prospera approached Catliff about the position, he suggested the two credit unions should get together and talk about merging. In fact, Catliff became chair of the merger task force.
Both sides were optimistic as the talks began and early in the process it had been agreed that the name of the new entity would be Prospera Credit Union since the merged financial institution would represent much more than Greater Vancouver’s North Shore region.
It was also agreed that Catliff would be the new organization’s president and CEO.
Both sides, however, say serious concerns soon became evident during negotiations.
Prospera says there were three significant issues that led to its decision to pull out of the talks.
“During the due diligence process, it became evident that Prospera is in a very strong financial position to grow our business and enhance our service without the challenges and significant costs of a merger,” it told its members.
“Prospera is widely considered one of the most valuable credit union brands in B.C. and we felt many of the characteristics and brand values would have been diluted through this merger,” it added.
For North Shore Credit Union it’s back to business as usual with Catliff resuming his duties as president and CEO.
Meanwhile, Bruce Howell continues as Prospera’s interim president and CEO while the credit union resumes its search for a permanent president and CEO. IE
B.C. credit unions halt merger talks
Prospera Credit Union says it is “poised for prosperity” on its own
- By: Brian Lewis
- August 28, 2007 August 28, 2007
- 11:20