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Email this3:41 pm
December 12, 2009
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Meridian Credit Union's 2023 annual report is out and, on numbered page 2, look at how they describe their Motus Bank subsidiary:
"[...] and as of December 31, 2023, we continue to manage motusbank and our commercial equipment leasing and financing subsidiary, OneCap"
This is notable because Motus Bank continues, now two years in, under a "strategic review" status, with options considered including a full sale of the business (either as a share sale or asset sale), wind down of the business, immediate full shut down of the business, or integration into Meridian Credit Union. It appears they've also been trying, unsuccessfully, to find a buyer thus far. Also within the annual report, it says they aim for "integration" of the Motus and OneCap businesses, so could be leaning towards merging all Motus Bank products into existing Meridian Credit Union products.
Meanwhile, the only other reference is that Meridian has a $200 million guarantee for Motus' participation in the Canada Housing Trust and Canada Mortgage Bond mortgage securitization programs, of which $23 million is used. This is $200 million in "trapped capital" Meridian could unlock and put to better use, such as reinvesting in its antiquated technology platforms, opening and renovating branches, investing in employee training and compensation, or launching new products, nevermind the ~$20 million in annual net losses Motus continues to rack up. 🙁
Absent is any mention of active Motus members, which have likely dropped below 1,000.
Cheers,
Doug
4:47 pm
January 11, 2020
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That’s interesting. I have a product with Motus as when they were first launched they had some good competitive offerings. Since then they have offered nothing compelling and I rarely even get communication from them. They literally have done nothing to try and build their business. So strange they would even start and then do nothing. My product is due this yr and you can count on membership being 999 afterwards 🙂
8:04 pm
October 21, 2013
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Thanks, Doug.
Just wondering... how do you lose 20 million a year on 1000 customers and remain in business at all? For that, we should all be getting concierge banking service and at least 10% on our deposits!
8:57 pm
June 18, 2019
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First one out the gate to always reduce deposit interest rates. Meridian is not so much different.
6:55 am
October 27, 2013
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I am surprised this entry is still on the HISA chart.
9:06 am
December 12, 2009
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Loonie said
Thanks, Doug.Just wondering... how do you lose 20 million a year on 1000 customers and remain in business at all? For that, we should all be getting concierge banking service and at least 10% on our deposits!
It's a good question, and I'm not sure I have all the information to answer that, but I'll try. For starters, they have a board of directors that consists largely of Meridian Credit Union Limited directors, including board chair Karen Farbridge, a retiree who runs her own consulting company, serves as the elected mayor of Guelph, and serves as board chair of both Meridian and Motus Bank. Despite Motus Bank's financial results also being consolidated within Meridian's, Meridian sees fit to pay her an extra $45,000 per year as board chair of Motus in addition to the $45-60,000 she earns from chairing Meridian. The same is true of most other non-employee directors of Motus Bank, who are also Meridian directors. That adds up to a significant extra cost.
The other big issue is staffing. Motus has staffed their contact centre more than sufficiently, with nearly around the clock and seven day a week hours of service, not simply relying on Meridian contact centre staff (who, in large part, work in the same building in St. Catharines).
Contrast that with Motive Financial, which has thousands more customers than Motus, but fewer than 5-10 employees dedicated to the operation, which leads to perennial onboarding issues and a poor client experience. If Motus were actually growing and had the banking technology infrastructure to match, this would be okay and a clear differentiator; I'd probably even recommend Motus. But they don't.
Meridian needs to bite the bullet and end this train wreck; they could even blame it on their former CEO, Bill Maurin, if they really wanted.
Cheers,
Doug
10:43 am
April 27, 2017
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I know the elected mayor of Guelph and pretty sure his name isn’t Karen.
2:17 pm
December 12, 2009
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mordko said
I know the elected mayor of Guelph and pretty sure his name isn’t Karen.
Sorry, former mayor. Looks like she either didn't run again as mayor or lost election in 2022.
5:13 pm
April 6, 2013
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Loonie said
…
Just wondering... how do you lose 20 million a year on 1000 customers and remain in business at all? For that, we should all be getting concierge banking service and at least 10% on our deposits!
That's easy if one is spending over $19 million a year just on staff and computers.
These are from their OSFI filings:
| Motus Bank ($ thousands) | Q1 (2023) | Q2 (2023) | Q3 (2023) | Q4 (2023) | 2023 |
| Salaries, pensions, other staff benefits | $1,520 | $2,968 | $4,544 | $6,023 | $15,055 |
| Computers & equipment | $401 | $804 | $1,200 | $1,591 | $3,996 |
| Total | $1,921 | $3,772 | $5,744 | $7,614 | $19,051 |
The online-only banking market is crowded now. A free online-only chequing account is not really outstanding. 2¼% on an online-only savings account is not either.
A 6.69% five-year fixed-rate closed mortgage doesn't stand out either now when Tangerine Bank is offering 5.44% and Simplii is offering 5.49%.
5:52 pm
November 5, 2022
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It's really looking like some of these Credit Unions are really just a local small pond for a CEO to take over, and then rake in millions in salaries and benefits for his/her cronies and friends on the board.
It would be the perfect thing to take over, as most of the "owners" have no idea of what is going on and don't vote, and unlike a normal bank you don't have Shareholders breathing down your neck. So you take it over in cahoots with your buddies on the board, and then just spend all day dreaming up creative ways to increase your Exec performance bonuses. Pretty sweet gig.
9:19 pm
December 20, 2019
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From the end of 2023
https://www.motusbank.ca/MotusBank/media/motusbank/pdf/Pillar-3-Disclosure-December-2023.pdf
Add up all provinces and Ontario has more business than all the other provinces combined.
If I were a betting man I would forecast a folding into Meridian.
9:50 am
December 12, 2009
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KamWest said
From the end of 2023
https://www.motusbank.ca/MotusBank/media/motusbank/pdf/Pillar-3-Disclosure-December-2023.pdfAdd up all provinces and Ontario has more business than all the other provinces combined.
If I were a betting man I would forecast a folding into Meridian.
Yeah, that's how I'd bet as well. It's all a matter of whether Meridian's board wants to change their bond of association to open membership to all residents of Canada, as the Ontario credit union legislation do allow it. It'd be a bit 'messier', but they could also fold in the Ontario members' deposits and mortgages into existing Meridian products and memberships, and then wind down or sell the credit products of Motus customers outside of Ontario and close the deposit products of Motus customers outside of Ontario.
The Motus balance sheet continues to decline since December 31st last year. As at July 31, 2024, they have about $140 million in mortgage and other lending exposure, and about $120 million in deposits. That's tiny. Like Hubert Financial tiny, but not Hubert Financial cost structure.
Cheers,
Doug
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