Dividends Have Slipped, But Is A Turnaround On The Horizon?

In honor of International Credit Union Day, a look at how credit union dividends have shifted over time and why a rebound might be just around the corner.

ANNUAL DIVIDENDS
FOR U.S. CREDIT UNIONS | DATA AS OF 06.30.22
© Callahan & Associates | CreditUnions.com

  • Low-yielding liquid core deposits have remained the most popular share account types since the pandemic began. This preference — combined with near-zero interest rates — resulted in a natural decrease in dividend payouts. Rising interest rates, however, should support higher dividend payouts in the future.
  • Another type of dividend that is tied to membership, not interest rates, is the patronage dividend. Patronage dividends are akin to a bonus credit unions pay members to thank them for their support. Increased loan demand coupled with increased interest rates will lead to increased yields and stronger credit union earnings, and stronger earnings provide the opportunity to reward members in the form of patronage dividends.
  • Although total dividends have declined, credit unions haven’t stopped giving back to their members. Stable capitalization and an overall healthy balance sheet allowed the industry to invest in staff, products, and services. Although tangible rewards like dividends have thinned, credit union relief efforts and internal investments have rewarded members in new ways.
October 15, 2022

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