C&WJCCU, COK Sodality merger gets green light for December 1

The merger of C&WJ Co-operative and COK Sodality has cleared a primary hurdle, approval of members, paving the way for the two credit unions to combine into one over this weekend.

At a specially convened general meeting of the 321 C&WJCCU members present and voting last Saturday, 304 said yes to the tie-up. None were against but 17 members abstained.

That meeting followed a similar vote by COK Sodality members earlier this month, and paves the way for Jamaica’s largest credit union with a total membership of over 400,000 to emerge on December 1.

The merger will take place via transfer of engagements. This means that COK will be transferring all its assets and its liabilities, and members, to C&WJCCU. COK Sodality Co-operative Credit Union comes to the merger with 250,000 members; four branches, down from five, having closed the Winchester location recently; and, as of September 2024, some $13.28 billion in assets, inclusive of a loan book of $8.9 billion; and deposits of $10.8 billion.

The merger partners are both headquartered in Kingston, with branches spread inside and outside the capital.

C&WJCCU, the full name of which is Community & Workers of Jamaica Co-operative Credit Union Limited, has about 150,000 members served by 19 branches across most parishes, the exceptions being St Thomas, Portland, St Catherine and Trelawny.

Not all of the 23 branches under the combined entity will survive the merger.

C&WJCCU Joyce West Johnson says the effective date of the merger would be this Sunday. But, for now, previous COK Sodality members will continue to access services at their current branches, and the same will obtain for the C&WJ members.

“Effective December 1, 2024, COK will no longer exist. All the assets, liabilities and obligations of COK will pass to C&WJCCU. The name of the entity going forward will be C&WJCCU,” West Johnson told the Financial Gleaner in between a busy round of meetings on Monday to effect the merger.

“The next step is that we will be doing all the formalities to now implement the merger, effective December 1, 2024. In terms of the operations, nothing will change for the members. They will continue to access their services at their current locations,” she said.

Over the ensuing months, the credit union’s action list includes a system conversion to serve all members from all present branches, to be followed later by branch consolidations.

“We both have branches in some areas, and that is where we will generate a good amount of synergies. Branch consolidations are expected in the next few months as well. Once we are able to integrate the systems and processes, the branch consolidations will come on stream,” West Johnson said, adding that there will be a constant flow of information to the 400,000 members.

“In another few months, we will be updating the members as to exactly when it is that will happen, and advising of all the branches that they will have available,” West Johnson added.

C&WJ’s absorption of COK Sodality is its eighth merger deal since 2010.It gobbled up smaller entities during a time when the movement’s umbrella body, the Jamaica Cooperative Credit Union League (JCCUL) was marshalling credit unions in preparation for a new regulatory regime that would see the community banks coming under the supervision of the central bank. That supervision would result in tighter rules on capital strength and loan risk, with some operators seen as unlikely to meet the requirements the Bank of Jamaica would impose. The movement chose to act pre-emptively by pushing vulnerable members towards combining operations, the upshot of which was a shrinkage of the credit union market by around half in 15 years, from more than 40 members to now 24, as of Sunday.

Of note, COK, then known as City of Kingston Co-operative Credit Union Limited, was one of the first to secure a merger deal amid the early talks for the new regulatory regime, when, in November 2009, it gobbled up Sodality Co-operative Credit Union Limited.

West Johnson says the merger of COK Sodality into C&WJ is all about strength.

“The merged entity is going to be stronger together, better services, better products, better technological advancements that will support our members, support our volunteers, and support our communities. The entity will support its stakeholders and be better able to do so,” she said.

Since their establishment, beginning 1941, credit unions have been self-regulated; numbering as high as 96 in the 1970s, but is now a quarter of that level because of a series of mergers that brought the movement to 46 in 2010 and further to 24 at present time, with more deals said to be pending.

JCCUL CEO Robin Levy is predicting that other mergers on the cards could shrink the sector further to 18 within another year.

Levy told the Financial Gleaner that while the sector was keen to maintain the intimacy of customer contact that is a part of the credit union experience, mergers were necessary to deal with modern operational realities.

As of June 2024, sector membership stood at over one million, total assets were estimated at $182.7 billion, with loans at $126.4 billion, while savings were at $144 billion.

neville.graham@gleanerjm.com