Desjardins to buy Province of Ontario Savings Office

Desjardins Credit Union is buying the 28-branch Province of Ontario Savings Office (POSO) for $50 million, Ontario finance minister Janet Ecker announced Tuesday.

Desjardins has also committed to invest another $120 million on expanded services, training and improvements.

The provincially-owned Savings Office was created by the Ontario government in 1922. It has $2.8 billion on deposit from more than 100,000 customers.

While the savings office does not currently have many services traditional banks do (for instance, it does not offer bank machines, consumer loans, mortgages, RRSPs, or mutual funds), the institution does pay higher-than-bank interest on deposits.

It has 23 branches in 17 communities. It also provides banking services in northern Ontario through agencies located in five communities where there are no other banks or trust companies. Desjardins has pledged to keep those remote agency offices open indefinitely.

"Over the past 80 years, we understand that POSO has built a strong relationship with its customers throughout Ontario, and we want to ensure that the new Desjardins Credit Union Inc. meets and exceeds these customer expectations," Desjardins Credit Union chair Jean-Guy Langelier said.

"There will still be a familiar face behind the counter ready to offer the best customer service, but with more staff and more financial choices available," he said.

The province signalled in its 2001 budget that it would be "getting out of the banking business" by seeking a buyer for the Savings Office.

Last September, Finance minister Janet Ecker released a request for proposals to qualified bidders interested in buying the institution. The Conservative government said the new owner would be required to "maintain POSO products and services for a minimum of three years."

The sale is effective April 1, 2003.

The Desjardins Credit Union is part of the Quebec-based Desjardins Group, the sixth-largest financial institution in Canada.