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 Credit Union Managers’ Association September 17, 2003 “Season of Change”

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

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 Program2003 (# of MIs) 2002 Watchlist628 Pending Supervision 36 Supervision513 Administration01

Distribution of Assets By Premium 2Q03 vs 2Q02

Where Are We Going?  OSVs  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