RANKIN INLET - The Atuqtuarvik Corp. has entered into a memorandum of understanding with the First Nations Bank of Canada that will see banking available in a number of Nunavut communities.

Once finalized near the end of April, the deal will see Atuqtuarvik (a Nunavut Tunngavik Inc. investment corporation) become one of three major shareholders in the First Nations Bank of Canada (FNBC).

Atuqtuarvik Corp. employees Tracy Wallace and Emily Beardsall, right, go over business files at their head office in Rankin Inlet. The corporation is working on a five-year deal with the First Nations Bank of Canada to expand banking in Nunavut. - Darrell Greer/NNSL photo

The parties are working under a five-year agreement, which will see the FNBC open a full-service branch in Iqaluit within the next two years.

The FNBC has also agreed to open three agency banking outlets in Nunavut during the agreement.

The agencies are not full-service branches and, as such, will be located in established businesses in the communities they serve, much like many of Nunavut's postal outlets operate.

Atuqtuarvik president Ken Toner said the first step in the process will be for a community to express interest in having a banking agency.

He said Atuqtuarvik will work with the FNBC to complete market studies on interested communities.

"We're not going to open an agency unless it can make money, so the market study will determine the prime candidates for agencies to be established in," said Toner.

"There are minimums we have to establish for our investment.

"The agencies may come before the full-service branch in Iqaluit, or they may come after, depending on what kind of business plan we can help them put together.

"We've been working with the FNBC for the past six to eight months on creating a plan to do that."

There is no specific intent to establish one agency in each region of Nunavut.

Toner said the establishment of the three agencies will be driven by the market, not regional location.

He said the FNBC has to compete with every other bank in the marketplace, so there won't be a big difference in the cost of products or services it offers.

"We still have a few minor issues to be resolved by the FNBC's annual general meeting on April 24, including completing the share offering.

"The bank is committed to lending into the Nunavut marketplace as soon as possible and we've agreed to help identify businesses here.

"Atuqtuarvik has never had any problem with that, doing about $10 million worth of business a year for the past six years.

"We have $70 million worth of capital, of which close to $60 million is already deployed."

Toner said Atuqtuarvik never intended to lend to a client indefinitely.

He said the firm's goal is to help clients become more viable and, once that's accomplished, move to a bank.

"The FNBC is interested in buying part of our portfolio, so we'll be doing a transference of some of our deals over to them.

"So, there will be no problem for the FNBC to meet the deal requirement that states it will lend at least $5 million into the Nunavut marketplace during the first year."

Toner said the FNBC is focused on the aboriginal marketplace, which is only a sideline for many other banks.

He said the FNBC is the only bank in Canada totally owned by aboriginals.

"The FNBC gives shareholders, such as the Atuqtuarvik Corp., the opportunity to earn a return on its investments when the bank becomes more profitable a little further down the road.

"The bank is familiar with most aboriginal issues, and 70 per cent of its employees are aboriginal."

Toner said the FNBC tries to employ a representative number of people in any marketplace it serves.

He said the bank brings a number of positive aspects to the table that don't exist in Nunavut right now.

"This bank understands the marketplaces that exist in Nunavut and that's what we need here.

"It's a bank that we're working with to get a long-term commitment to the small hamlets of Nunavut."