DBRS Confirms Concentra at R-1 (low), Stable Trend

DBRS has today confirmed the Short-Term Instruments rating of Concentra Financial Services Association (Concentra or the Company) at R-1 (low) with a Stable trend. The rating continues to be based on a high level of implied support from Credit Union Central of Saskatchewan (SaskCentral). Under DBRS’s rating methodology, DBRS has assigned Concentra a Support Assessment of SA1, reflecting a strong expectation of timely support from SaskCentral.

Although no guarantees are in place, Concentra’s rating has been assigned based on the rating of SaskCentral without being notched down due to the strategic importance of the Company to SaskCentral and the Saskatchewan credit union system. In the absence of support from SaskCentral, Concentra’s rating would be lower.

On a standalone basis, Concentra’s strengths include asset quality and liquidity. Profitability is better than many other institutions operating in the credit union space. Concentra’s major challenges include improving its funding base (quality, cost and diversification) and improving geographic diversification. Interest rate exposure, which in the past has resulted in volatility in profitability and internal capital generation, has improved and it will be important for Concentra to maintain this more disciplined approach.

Notes:
The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

The applicable methodologies are Rating Canadian Provincial Credit Union Centrals, Credit Unions and Desjardins Group (April 2011), Global Methodology for Rating Banks and Banking Organisations (June 2012) and DBRS Criteria: Intrinsic and Support Assessments (February 2009), which can be found on the DBRS website under Methodologies.

The sources of information used for this rating include company documents. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.