August 4, 2010
Sunova's 2013 annual report includes a couple bits of info on their Hubert division:
Average interest rate on HISA: 1.87%
Total Interest paid in 2013: $4,012,649
If you assume an average 2% interest on Hubert deposits (to account for higher-interest GICs), that ballparks to around $200 million in Hubert deposits (average $80K/customer). The average rate may be a bit higher, but even at an unrealistic 2.5%, that is $160 million and $65K/per customer.
Sunova has around $1 billion in member deposits (over 30K members), so Hubert would seem to be providing 15-20% of their funding.
December 12, 2009
The danger in these sort of "extrapolation-up"-type comparisons and analyses is things do not always "equate" equally on the way "up" the financial statement and/or balance sheet. I'm seriously doubting that Hubert is providing 15-250% of Sunova's overall funding, as am I doubting heavily that they've grown to provide 20% of their overall member deposits. You don't take into account what percentage of their portfolio is GIC versus HISA as well as the relative "duration" (i.e., maturity profile) of their GICs - for instance, a good chunk could've been taken out several years ago at north of 4%.
Also, consider, if Hubert was providing 20% of their funding, they'd be trumpeting that number in their annual report. They only disclose total members, average HISA rate (not the percentage of their deposits which are demand rather than term) and total interest paid (whether that's just HISA interest or combined HISA/GIC).
I'd rather see you scrap this analysis and go back to Hubert and press them to provide what percentage of their deposits come from the Hubert Financial transit number. This information is easily available to them; whether they want to disclose it is another matter.
February 22, 2013
Another issue with the analysis is using an "average $80K/customer". That is easily calculated but may not (or may) tell the real story. I used the numbers from the OP to build a model and if the top 400 depositors are allocated as follows:
Count ----------- Deposit ----------- Total
100 ----------- $1,000,000 ----------- $100,000,000
100 ----------- $500,000 ----------- $50,000,000
100 ----------- $250,000 ----------- $25,000,000
100 ----------- $225,000 ----------- $22,500,000
then the bottom 2050 depositors would average just over $1000 each.
The median number would be a more appropriate measure.
August 4, 2010
Actually, I took a weighted average of Sunova's liabilities distribution against the current Hubert rates, which came out right around that 2% mark (although Hubert duration probably skews longer term than the overall customer base). That's where the 20% comes from, although I didn't think it would actually be that high. But Doug makes a good point about the interest rates - they were higher back when Hubert started up, and that would push up the averages a bit more again along the upper end.
But if you look at it the other way around, $4 million in Hubert interest even at 3% is $134 million (over 13% of $1 billion in deposits), 3.5% is 11.4% and 4% is 10%. Since 4% would be the highly unlikely scenario that most of Hubert's deposits are in old high-interest 4-5yr GICs, that's probably a floor, and Hubert is almost certainly somewhere in the 10-20% range of total deposits. Given's Doug's catch of the higher old rates, it is most likely in the 12-15% range.
It might be interesting to compare the 2010 Annual report against 2011/2012 - if Hubert brought in a big pile of long-term GICs at a rate much greater than their branches it might show up against the noise in the liabilities chart.
As for gs's quibble about "average" - that's what an average is; it came out of the numbers and I noted it- it could represent everyone having $1 deposited and the Bank of Canada creating a $10 billion account for 1 week. I take no responsibility for misuse by others... A median might indeed also be useful, and I would be very happy to calculate one for anyone caring to provide the balance amounts for every Hubert account!
August 4, 2010
As for getting any additional info from Manitoba credit unions, it is to laugh! I was curious a few years ago as to why Manitoba rates were so high, and one of the things I checked was the risk-weighted capital levels. CUs in other provinces all disclosed this in their annual reports, often as a provincial regulatory requirement. Manitoba (uniquely?) did not so require, and while a minority reported, many (including Sunova) did not. A couple (including Sunova) after being prodded would only disclose that it was "above X%". It now appears to be a required disclosure, but I think that has to do more with Manitoba adopting general international reporting standards rather than any specific desire to be more forthcoming.
While it would be fun to know the exact distribution of the Hubert deposits, what would be even more interesting is how much of it is from out of province, and for all the Manitoba CUs generally. It would just be a drop in the bucket in the big picture, but presumably the rest of Canada is providing a nice little chunk of extra capital to fund Manitoba mortgages, gopher farms, and whatever. This is another reason there wouldn't be any "trumpeting" - I'm surprised Sunova included the interest number. As far as I know that's the only breakout of any online division financial number I've ever seen.