ATB Financial is making moves to expand within the province's urban centres, especially the hot Calgary market.

Dubbed "Alberta's $15-billion success story" by CEO Bob Normand, the Edmonton-based Crown corporation will not be venturing beyond Alberta's borders nor will it be privatized anytime soon.

Normand has announced the financial institution plans the biggest expansion of its 67-year history, adding 25 new branches in the next five years. Calgary will receive most of that growth with 13 new outlets to be opened by 2010, including five in the next 12 months.

Bob Normand

"It's simply common sense to build where the people are, and frankly that means building branches in Alberta's growing centres, and in particular more branches here in Calgary," Normand said at a Calgary Chamber of Commerce luncheon last week.

ATB, which holds $15 billion in assets, currently has 15 branches in Calgary and a total of 149 provincewide.

Normand said that the 2005 Calgary expansion alone represents an $8-million capital investment that is expected to create 50 jobs initially, a number that will likely increase over the years as the branches establish themselves and grow their client base.

The 2005 Calgary expansion targets so-called "greenfield sites" located in newer communities, such as McKenzie Towne, Rocky Ridge, Deerfoot Meadows, Saddleridge and Creekside.

Edmonton will receive five in new branches by 2010, while the remainder will be scattered among the smaller cities of Grande Prairie, Fort McMurray, Lethbridge, Red Deer and Medicine Hat.

In addition, roughly 100 new financial advisers will be hired - about 40 for Calgary - to shore up ATB's growing investors' services group, which Normand said recently topped $1 billion in funds under administration.

The focus on Calgary is no accident. Normand cited statistics showing the city generates almost 40 per cent of Alberta's GDP, has the second lowest unemployment rate in the country, and has a fast-growing population expected to surpass 1.3 million by 2014.

"For us, it means more people looking for mortgages, more people needing wealth management advice, and it also means businesses are expanding to accommodate growth and they need capital to do that," he said.

ATB hopes to strengthen its commercial and personal finance position in urban centres, but Normand was quick to note that ATB has "no plans to close any of our rural branches; they provide a strong support for our urban expansion."

Agribusiness, once the foundation for ATB's success, now accounts for just 11 per cent of its business compared to residential mortgages which represents 44 per cent of total loans.

Speculating that the expansion is a possible move towards privatization, both members of the audience and reporters queried Normand about the possibility that the Crown corporation would be auctioned off. He responded that the topic has never come up during his watch.

"There's always lots of speculation in the press, people talk to me about it, but no I've had no discussions of that sort with any government minister, nor would I expect it either," he said, adding that growth outside of Alberta would have to wait until the Alberta legislature changed ATB's charter and mandate.

Banking analyst Darko Mihelic, from Toronto-based First Associates Investments Inc., agreed that it is unlikely that ATB would be sold.

"Why would (the province) do it? It's flush with cash," he said.

Mihelic added that if it were privatized, ATB would probably be swallowed up by one of the "Big Six," Canada's largest banks.

He also noted that other small, western-based financial institutions have fared well on open market. He cited Edmonton-based Canadian Western Bank as a tiny financial institution - with assets of just $5 billion compared with those of TD Bank Financial Group, which exceed $310 billion - that has increased its asset base by an average of 12 per cent for 10 years running, which represents an almost unheard growth among banks.

"Based on that, I would think that (ATB) could do something very similar," Mihelic said. "But from a profitability point of view, it does have some unionized employees, which make its cost structure a little inflexible; there are things it would have to do to improve profitability."

(John Ludwick can be reached at ludwick@businessedge.ca)