CUMA Manager of the Year Award Co-sponsored by… And the 2003 honour is awarded to … Marty Komsa, President & CEO Windsor Family Savings Credit Union

Credit Union Leaders Speak Out! Andy Poprawa, President & CEO Deposit Insurance Corporation of Ontario

Deposit Insurance Corporation of Ontario “Season of Change” Credit Union Managers’ Association September 17, 2003 Deposit Insurance Corporation of Ontario

Overview How are we doing? Where are we going?

How Are We Doing? Overall system condition is good Risk of failures has been declining Overall system performance stable Some credit unions/caisses populaires performing better than others

Quick - System Condition at 2Q03 (   from 2Q02) 269 institutions  (16) from 285 All except 3 met minimum (5%) capital requirements Average size $78 M (17M) from $61 M System Assets $20.8 Billion (3.4B) from $17.4B System Capital 6.69%  from 6.73% Liquidity 21.3%  from 17.5% Commercial loans  by 13%

Quick System Performance (   from 2Q02) at 2Q03 Margins  from 3.00% to 2.97% Non-interest expenses  from 3.33% to 3.22% Non-interest income  by .08% Loan Costs  from .16% to .12% Gross Delinquency (> 30 days)  from 1.38% to 1.01% ROA  from 29 bp to 36 bp

DICO July 31, 2003 financial results Quick - DICO Financial DICO July 31, 2003 financial results No major failures during 2003 No new insurance losses to date Recoveries of $5.5 million on past losses Gross operating expenses 14.4% below budget Reserve Fund of $56 million vs. target of $56 million by year end

Quick - DICO Operational On-Site Verifications (OSVs) 91 completed/in progress as at end of 3Q03 Intervention Programs – improvements since last conference update of 2002 Program 2003 (# of MIs) 2002 Watchlist 6 28 Pending Supervision 3 Supervision 5 13 Administration 1

Distribution of Assets By Premium Category @ 2Q03 vs 2Q02

Where Are We Going? OSVs Small Credit Union Initiative CUCO Task Force recommendations Exit interviews & final reports Materiality Appeals Commercial loan reviews Small Credit Union Initiative Dedicated staff On-site reviews Streamlined processes

Where Are We Going? Standards (By Law #5) Review Expanded advisory committee Industry Chair Proposed standards circulated for comment in September Interest Rate Risk Regulation Capital Rules DICO Contingency Financing & Investment Policy Research on consumer awareness

Questions & Dialogue