Declining farm incomes and higher input cost loans appear to have increased provisions for loan losses at Farm Credit Canada (FCC).
Billing itself as Canada’s largest provider of capital to agriculture, FCC turned in the 26th consecutive year of growth.
But the Crown Corporation almost tripled loan loss provisions last year to $103.3 million from $30.9 million.
One customer’s losses accounted for the largest portion of the increased loan loss provision.
Impaired loans are expected to be $123 million for the current fiscal year ended March 31, 2020.
The FCC annual report showed credit impaired loans are still an acceptable .5 per cent of the $36.5 billion loan portfolio.
Profit for the Crown fell 6.1 per cent to $656.7 million, mainly from the increased loan losses.
Interest income was $1,151 billion, up from $1,072 billion.
Administration expenses declined seven per cent to $426.3 million from $456.8 million.
FCC’s market share of agriculture related loans slipped to 29.1 per cent from 29.8 per cent.
The chartered banks loan market share was up .4 per cent to 35.5 per cent while credit unions’ share decreased by .1 per cent to 15.6 per cent
FCC loans increased 4.5 per cent to $36.017 billion during the year with more than 20,000 customers across Canada.
Every sector experienced an increase in loans led by oilseeds and grains – up $714 million to $11.06 billion — and agri-business, which increased $332 million to $3.64 billion.
Ontario leads FCC loans with $10.75 billion followed by the West at $10.3 billion, Quebec at $4.7 billion and the Atlantic region at $1.25 billion.
During the year FCC gave $4.3 million to communities in initiatives and raised over 9.5 million meals in the campaign against hunger.
Ron Walter can be reached at ronjoy@sasktel.net
