Trust companies and savings companies post overall drop in profitability in 2008

Deposit institutions

Montréal – The Autorité des marchés financiers (AMF) has released the 2008 report on trust companies and savings companies, tabled today in the Québec National Assembly by Minister of Finance Raymond Bachand. The report shows that the overall profitability of trust companies and savings companies dropped in 2008.

Trust companies – 20.7% decrease in profitability
Trust companies operating in Québec posted a 20.7% decrease in profitability over the past year, from $753.7 million in 2007 to $597.5 million in 2008. The return on common shareholders’ equity thus dropped from 13.4% to 9.6%.

Trust activities based on assets under administration fell by 14.7% to $2.4 billion in 2008. Financial intermediation activities rose by 13.3%, from $94.6 billion to $107.2 billion.

Quebeckers accounted for 9.9% of deposits received by trust companies and 25.3% of their mortgage loans.

The report states that, as at December 31, 2008, a total of 36 trust companies were licensed to carry on business in Québec—3 with a Québec charter and 33 with a federal charter. Furthermore, 29 of these companies, 2 of which had a Québec charter and 27 a federal charter, were registered with the AMF under the Deposit Insurance Act and therefore authorized to receive deposits from the public.

Savings companies – 55.3% decrease in profitability
Savings companies operating in Québec posted a 55.3% decrease in overall profitability in the past year, from $999.2 million in 2007 to $446.8 million in 2008. The return on common shareholders’ equity thus dropped from 12.2% to 4.9%.

Cumulated total assets of all savings companies jumped 7.2% over the past year, from $117.2 billion in 2007 to $125.6 billion in 2008.

Quebeckers accounted for 9.3% of deposits received by savings companies in 2008 and 12.7% of their mortgage loans.

The report also states that, as at December 31, 2008, a total of 7 savings companies with a federal charter were conducting financial intermediation activities in Québec. They were registered with the AMF under the Deposit Insurance Act and therefore authorized to receive deposits from the public.

The 2008 annual report on trust companies and savings companies is available (in French only) on the AMF website, under the heading Publications/Documents regarding the AMF/AMF annual reports.

The Autorité des marchés financiers is the regulatory and oversight body for Québec's financial sector.

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