Media Release – What Would $3 Billion Buy for Albertans?: A Valuation Analysis of ATB Financial

Press Release, Housing Affordability, Frontier Centre

Winnipeg: The Frontier Centre for Public Policy released today A Valuation Analysis of ATB Financial. In this policy study, Ian Madsen, CFA, examines a variety of indicators to ascertain the value of the Alberta Crown Corporation.  To do so, Madsen follows well-established practices and methodologies that include two different approaches in order to gain an insight into the monetary worth of what used to be known as the Alberta Treasury Branches operating now as ATB Financial.

ATB is an historic Alberta institution that has played a role in the development of the province going back to the 1930s, a time in which Eastern banks were considered hostile to Western interests and rural communities had difficulties securing banking services.  ATB is also a unique institution in the Canadian context as the sole banking enterprise owned by a provincial government. 

Through social, political and technological forces, the circumstances in which the Alberta government created and developed ATB have changed.  People today bank from their mobile phones and ATB has now grown to be a competitive force in the marketplace. It even competes with many an Alberta enterprise. Of the market share that does not include chartered banks in Alberta, ATB has a 60 per cent share, while credit unions collectively have a 40 per cent share.  Moreover, ATB has benefitted from its Crown status from a variety of hidden subsidies from the Alberta taxpayer, which gives it an advantage to compete against some of the same taxpayers indirectly contributing to such subsidies.

In the paper, Madsen carefully compares ATB with other financial companies of similar size and nature that are publicly listed and traded, and also estimates an intrinsic value for ATB using the present value of the net cash flows that it generates.  Madsen ascertains that the current rough value of ATB may be between $1.4 and $3 billion.  Knowing the approximate worth of ATB provides Albertans with necessary information to make decisions about the future of ATB.

In economic terms, there is a real cost to the Alberta taxpayer in retaining ATB in the hands of its government.  “The valuation of the ATB,” writes author Ian Madsen, “offers to Albertans, policy makers and the Albertan public at large, crucial information that may be used to assess the opportunity costs of keeping the ATB, and concerned Albertans can then better decide what they may need to forgo, in terms of provincial programs and services, for the sake of retaining ownership of the ATB.”  The author concludes the valuation by suggesting some scenarios through which Albertans could decide how to deal with ATB.

Ultimately, it will be up to Alberta voters to decide what to do.   We only hope “to spark a debate as to whether that value locked into the institution best serves Albertans where it is, or whether it should be used to better benefit Albertans in the smarter use of these valuable funds,” writes Frontier’s president Peter Holle.


Download a copy of A Valuation Analysis of ATB Financial  HERE.


For more information and to arrange an interview with the study's author, media (only) should contact:

Ian Madsen, CFA



Ian Madsen is an investment and financial analyst based in Surrey, BC. He earned a BA in Economics from the University of Alberta and an MBA in Finance from the University of Toronto. He has managed institutional investment portfolios, lectured at colleges, managed investment research operations, and developed financial valuation models. For several years Ian was vice president at a U.S. investment research firm with extensive operations in India, where he worked and managed staff. He also ran his own investment counseling firm and advisory newsletter. He holds the Chartered Financial Analyst (CFA) designation and is a former president of the Saskatchewan and Edmonton CFA Societies.