Hello and welcome to The Top Line. I’m Brieanna McCutcheon.
Olympia Financial Group conducts most of its operations through Olympia Trust Company, where it provides trust and custodial services to investors in Canada’s private capital markets. The company serves clients from across Canada and is a significant player in this niche market.
To talk more about this, we are joined by Craig Skauge, President of Olympia Trust Company, to find out more. Hello and welcome, Craig.
TMH: For viewers that may not know much about the company, can you lay out and simplify what your business model is?
CS: Well, we operate in a number of areas. The main area we operate in is servicing businesses and individuals that partake in what is called the private capital markets. So, we have individual self-directed retirement savings accounts, tax-free savings accounts and the like, we have a corporate shareholder services business that handles annual meetings, dividend disbursements, etc., for smaller public companies and private companies as well. We have a compliance software division for exempt market dealers, global payments and a currency division, and then we also do health spending accounts for small businesses.
TMH: If we look back at the beginning of the month, Olympia did a 29% increase to the company’s monthly cash dividend. Why was this decision made?
CS: Well, I mean fundamentally, if you look at our earnings, we could afford it, and we have a long track record of sharing with our shareholders. So we felt that it was a dividend that we could afford to increase, and we also felt simultaneously that we could continue to add to our balance sheet with some of the additional earnings.
TMH: Your Q3 results were also published at the beginning of the month. With earrings up more than 100 per cent to $5.25 million. What does the company attribute this success to?
CS: A lot of it is based on two things. One, we are sitting on a lot larger amounts of cash than we historically have been, and corresponding, the interest rates have increased, as is well noted by everyone. So those two things combined have helped with the increased earnings as well as additional account fees generated from the acquisitions we made last year.
TMH: As you know, interest revenue and trust income increased more than 100 percent to $6.42 million. What was the cause of this?
CS: Well again, we made two strategic acquisitions last year. Along with those came tens of thousands of self-directed investor accounts that had fairly significant aggregate cash balances associated. So we’re sitting on more cash than we historically have been, and in addition, the bank account has continued to raise interest rates as well.
TMH: The company also increased direct and administrative expenses by 36 percent, amounting to over $12 million. Is it safe to say the company shares the wealth when it achieves overall revenue success?
CS: It does. We have very entrepreneurial management contracts with a lot of our senior executives. So they share both the upside when times go down and the downside when earnings and profits have decreased.
TMH: Going forward into 2023, do you foresee the acquisitions you invested in during the 2021 year continuing to bring in money?
CS: Yeah, absolutely. I mean, we’re sitting on a larger client base, which will help increase our fee revenue accordingly, and most cash balances, as I’ve spoken to, will, of course, help interest earning so long as interest rates maintain or continue to increase.
That’s all the questions we have today, and thanks for joining us. Again, that was Craig Skauge, President of Olympia Trust Company.
To find out more about the company, you can follow them on the TSX, where they trade under the symbol OLY.
For more information, please visit olympiafinancial.com
A special thanks to our viewers for joining us for this interview. See you all again soon.
FULL DISCLOSURE: This is a paid article produced by The Market Herald.