Tuesday, September 30, 2014

The Great Divide

Second quarter financial performance data for federally-insured credit unions show that there is a growing divide between the largest credit unions and smallest credit unions.

Large credit unions -- those with more than $500 million in assets -- reported a return on average assets of 96 basis points, while small credit unions with less than $10 million in assets reported a loss with a return on average assets of minus 5 basis points.

Eight hundred and forty small credit unions reported a loss through the first six months of 2014. In addition, only 894 small credit unions (or 43 percent of small credit unions) reported higher earnings for the first six months of 2014 compared to a year earlier.

In comparison, only 3 credit unions with more than $500 million in assets reported losses through the first half of 2014. Also, 231 out of 448 large credit unions (or nearly 52 percent of large credit unions) reported higher earnings through the first half of 2014 compared to the same time period in 2013.

In addition, small credit unions posted negative growth rate in net worth, membership, and loans during the first six months of 2014.

Large credit unions, on the other hand, reported that net worth grew by 9.69 percent, membership increased by 6.35 percent, and loans expanded 10.9 percent.

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