Second month's worth of balance sheet data for Motus Bank available | motusbank | Discussion forum

Loonie said
Thanks, Doug. Seems like they are picking up speed. Looks like they took in roughly 23 million in May. This could account for their inability to cope with demand. Someone like me would have taken up a couple of hours of their time between one thing and another.

Any info on number of new clients?

Nope, unfortunately, the OSFI filings don't state those sort of figures, like number of customers (gross or net of discontinued relationships). The only data we have is an initial press release put out by Motus or Meridian, possibly at Meridian's 2019 AGM in April, that said they'd attracted ~2,700 clients in the first couple weeks of launch. Even if we assume that same growth rate, which is possible though somewhat less likely, that assumes they may have as many as 18-20,000 customers, though it's probably somewhat less than that. Assuming this was accurate, dividing that by the ~$23 million in deposits gets you $1,150 per customer. Of course, deposits are not divided perfectly equally like this, but the data does seem to show that Motus Bank has been successful in attracting new customers, but likely isn't meeting their expectations in terms of dollar value of deposit growth and certainly not in lending. At any rate, this likely explains their inability to cope with demand in that they're attracting new relationships but not really getting the dollars they'd hoped.

As an "owner" of Motus through Meridian, I would be interested in their profitability.  

Unfortunately, this data won't be out until approximately 1 month after Motus Bank's fiscal second quarter 2019, which ended June 30, 2019, as OSFI filings on income and expenditures are disclosed quarterly versus balance sheets, which are disclosed monthly. I will be interested in this - likely due out in August or September - because, so far, they've not shown any expenses, which suggests Meridian Credit Union may be subsidizing the operation. Whether Meridian is subsidizing it or not, Motus Bank will either be a direct or an indirect drag on Meridian Credit Union's net income over the short- to medium-term.

Cheers,
Doug

Loonie said

I agree.
I would probably move my Motus money over to Alterna, where i can get the other features I need but have to pay for the cheques.

Have you looked into ASAP Cheques or DiscountCheques.com? Both use the same MICR ink and paper thickness/size requirements of Payments Canada accredited printers, but as was explained to me, Payments Canada requires them to purchase special software to win Payments Canada's stamp of approval. So, despite that they aren't Payments Canada approved, they guaranteed their cheques will clear or they'll refund your full purchase price (which they haven't had to do, so that says something of Payments Canada's asinine accreditation process!). You can get 200 cheques for about $35 + shipping, which is equivalent to about $10 all-in (tax in shipping) per book of 50 cheques each. By contrast, D+H charges $40 (or more!) for 50 cheques (100 cheques if your FI subsidizes the cost 50%). DiscountCheques.com has the same pricing as ASAP Cheques, but is 160 cheques for the same price, so it's marginally more expensive on a book of 50 cheques basis.

And, the reality is, many Canadian credit unions use either of ASAP Cheques or DiscountCheques.com as their preferred, default cheque supplier. So, that alone gives me a lot of comfort and confidence. 😉

Otherwise, if it's just free cheques you're after, why not look to Simplii Financial? They're arguably more responsive than Tangerine of late. I'd love to know why you'd prefer not to deal with them. They have free and unlimited cheques, free and unlimited Interac e-Transfers, unlimited linked bank-to-bank transfer accounts, fast 1 business day or same business day EFT transaction processing times, surcharge-free access to CIBC ATM network (including for deposits), and access to funds limits up to $5,000 available with no holds, depending on creditworthiness.

Beyond that, you could look to other Ontario credit unions that offer free cheque books for seniors over age 60. Also, if it's just about free cheques, don't you get free cheque books with your Meridian Credit Union chequing account for seniors?

I say, give them a little longer, at least until into September. By then, all the Spring and most of the Summer real estate deals will have closed.

I agree...sit tight, and see how rates shake out. If you have a Motus account, keep it. If you don't, stay on hold until September and keep your money where it is. The rate differential is likely inconsequential, especially so for only a month or two.

Right now, they need to focus on running a smooth ship, never mind getting any more business to deal with!

Their scripted response to me via e-mail seems like they don't seem concerned with their strict policy of holding all deposits, regardless of client's tenure or creditworthiness, and their slow as molasses EFT processing times. So, that's why I'm so pessimistic on Motus Bank. 🙁

Has anyone been seeing ads for them? I don't read the print newspapers any more, and I simply can't remember if I've seen online ads, as I tend to ignore them. Are they using any other media, especially outside of Ontario?

No, that's one of the problems. Instead of paying third party lead generators a commission, who, in turn, share a portion of that commission with partner sites like GreatCanadianRebates and HighInterestSavings Cash Back that provide a portion of that shared commission with the new customer that signed up, they should follow Tangerine's, Simplii's, and B.C. credit unions' lead of offering cash back sign up purchases directly to customers. They also need to advertise more than just sponsored Facebook posts and paid search ads. They're trying to operate this business on the cheap, with no marketing spend, but if that was the goal, they arguably could've just launched a virtual banking branch of Meridian Credit Union without having to put up $60 million in Meridian Credit Union member owners' money in retained earnings Meridian would otherwise invest on its own balance sheet! Ontario legislation permits credit unions to deal out of province, and Meridian updated its bond of association to remove Ontario residency requirements in 2015.

Cheers,
Doug

Motus Bank has finally added their first public regulatory filing (B-20, showing the composition of their lending book), for the quarter ended March 31, 2019, or the fiscal first quarter for Motus Bank.

Link: https://www.motusbank.ca/MotusBank/media/motusbank/pdf/B20-Disclosures.pdf

Most of this we already knew from my summaries above and here, but one interesting thing that was notable is that its first lending book went to...Alberta! We also see a bit more of the breakdown, with $65,000 booked as a conventional uninsured mortgage (at least 20% down) and $267,000 registered as a home equity line of credit. No breakdown as to number of mortgages or whether the HELOC was drawn or undrawn and what percentage, but what's interesting is the dates. Most of the lending from the first month's worth of balance sheet data I reported was booked prior to Motus Bank's public launch.

One wonders how that was possible, though one explanation might be that the initial month's worth of lending was for Motus Bank staff. Perhaps a senior manager or executive acquired a condo in Lake Louise or Sylvan Lake as a winter or summer vacation getaway, eschewing the high prices of Ontario's cottage country? 😉

Motus Bank has also added a "Corporate reports" page to the "Corporate Governance" page on its website where the regulatory disclosures (supposedly published quarterly) and annual audited financial statements will appear.

Link: https://www.motusbank.ca/About-Us/Corporate-Governance

Cheers,
Doug