Will Lowering Your Dividend Rates Slow Share Growth?

Shares grew an amazing 5.5% in the first quarter, while total credit union loans increased only 0.6%. As the shares flooded in, some credit unions tried save a few bucks and slow the inflow by reducing their dividend rates. But this tactic has only worked to a certain extent.

 
 

Shares grew an amazing 5.5% in the first quarter, while total credit union loans increased only 0.6%. As the shares flooded in, some credit unions tried save a few bucks and slow the inflow by reducing their dividend rates. But this tactic has only worked to a certain extent.

Below is a graph showing average dividend paid versus share growth for the top 100 credit unions in asset size. Although there is a small trend toward higher growth rates when dividends are higher, many large credit unions have been growing shares 15-20% with average rates between 1.5-1.75% over the past 12 months. One credit union has grown shares over 30% in the past year while keeping their average dividend below 1.5%.

 

 

 

June 17, 2003


Comments

 
 
 
  • Getting an up to date view of what other CUs are experiencing is very helpful. I'm glad to be a subscriber. Thanks!
    Anonymous
     
     
     
  • Could have been interesting except I kind of needed reasons why it didn't work.
    Anonymous
     
     
     
  • Any discussion regarding regular shares and their behavior is time well spent!
    Anonymous