DBRS Morningstar Changes Trend on Central 1 Credit Union to Stable from Negative, Confirms Long-Term Ratings at A (high).

ENPNewswire-August 31, 2021--DBRS Morningstar Changes Trend on Central 1 Credit Union to Stable from Negative, Confirms Long-Term Ratings at A (high)

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Release date- 30082021 - DBRS Limited (DBRS Morningstar) changed the trend on Central 1 Credit Union's (Central 1) ratings to Stable from Negative.

DBRS Morningstar also confirmed all of Central 1's ratings, including its Long-Term Issuer Rating at A (high) and Short-Term Issuer Rating at R-1 (middle).

DBRS Morningstar views support from the Provinces of British Columbia (B.C.; rated AA (high) with a Stable trend by DBRS Morningstar) and Ontario (rated AA (low) with a Stable trend by DBRS Morningstar) for Central 1 as likely, which reflects the importance of the credit unions in these provinces. This importance and the role of Central 1 in serving the credit unions are evident, particularly in B.C. where the provincial regulator, B.C. Financial Services Authority, named Central 1 as a Domestically Systemically Important Financial Institution within the Canadian credit union system. Accordingly, DBRS Morningstar assigned Central 1 a Support Assessment as SA2. Furthermore, in DBRS Morningstar's view the provinces are considered capable of providing such support, if needed. The level of support results in a one-notch uplift to Central 1's Long-Term Issuer Rating from the Intrinsic Assessment (IA) of the B.C. and Ontario Credit Union Systems (the Systems).

KEY RATING CONSIDERATIONS

The trend change to Stable reflects DBRS Morningstar's view that the considerable uncertainties facing financial institutions because of the Coronavirus Disease (COVID-19) pandemic have begun to abate. Moreover, B.C.'s and Ontario's economies are beginning to show signs of gradual recovery in 2021, amid the backdrop of a global economic recovery and the accelerated deployment of vaccines.

The ratings of Central 1 consider the fundamental strengths of the Systems. Specifically, these ratings reflect the IAs of 'A' for the B.C System and A (low) for the Ontario System. Central 1 provides liquidity management, payment solutions, and clearing and settlement services to the B.C. System and to most of the Ontario System. These credit unions own Central 1, and the IAs of these two systems incorporate an analysis of the combined financials of the individual credit unions in each province.

The ratings and Stable trends also reflect the strong market shares of credit unions in B.C. and growing market shares for residential mortgages and deposits of credit unions in Ontario. Furthermore, the solid performance of the relatively diverse provincial economies of B.C. and Ontario is supportive of the ratings. DBRS...

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