Motus Bank's days as a going concern appear numbered | motusbank | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

sp_Feed Topic RSS sp_TopicIcon
Motus Bank's days as a going concern appear numbered
May 4, 2024
3:41 pm
Doug
British Columbia, Canada
Member
Members
Forum Posts: 4254
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

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

May 4, 2024
4:47 pm
MattS
Member
Members
Forum Posts: 151
Member Since:
January 11, 2020
sp_UserOfflineSmall Offline

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 🙂

May 4, 2024
8:04 pm
Loonie
Member
Members
Forum Posts: 9289
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

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!

May 4, 2024
8:57 pm
sk
Member
Members
Forum Posts: 9
Member Since:
June 18, 2019
sp_UserOfflineSmall Offline

First one out the gate to always reduce deposit interest rates. Meridian is not so much different.

May 5, 2024
6:55 am
AltaRed
BC Interior
Member
Members
Forum Posts: 2966
Member Since:
October 27, 2013
sp_UserOfflineSmall Offline

I am surprised this entry is still on the HISA chart.

May 5, 2024
9:06 am
Doug
British Columbia, Canada
Member
Members
Forum Posts: 4254
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

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

May 5, 2024
10:43 am
mordko
Member
Members
Forum Posts: 874
Member Since:
April 27, 2017
sp_UserOnlineSmall Online

I know the elected mayor of Guelph and pretty sure his name isn’t Karen.

May 5, 2024
2:17 pm
Doug
British Columbia, Canada
Member
Members
Forum Posts: 4254
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

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.

May 5, 2024
5:13 pm
Norman1
Member
Members
Forum Posts: 6860
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

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%.

May 5, 2024
5:52 pm
InterestThis
Member
Members
Forum Posts: 303
Member Since:
November 5, 2022
sp_UserOfflineSmall Offline

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.

Please write your comments in the forum.