How Are Credit Unions Holding Up As ROA Dips Down?
Rising expenses and inefficiencies are contributing to declining returns for the industry.
Rising expenses and inefficiencies are contributing to declining returns for the industry.
Asset quality, liquidity, and revenue are all on the minds of credit union leaders. Here’s what the data has to say about that and more.
Rising interest rates helped credit unions boost margins in 2023; however, increased provisions ate into ROA.
What might performance in 2023 mean for 2024?
Credit union performance in the third quarter echoed that of the second, with continued tightening of liquidity, diminishing ROA, and deteriorating asset quality.
As credit unions repriced their asset portfolios, higher loan and investment yields bolstered margins and revenue. However, stiff competition for liquidity increased the cost of funds.
A look back at the Great Recession and subsequent industry performance offers an understanding of risks and opportunities in the current economic climate.
After two years of swings, first-quarter return on assets at credit unions was back in line with where things stood before COVID-19 upended the economic environment.
Credit union success on the balance sheet and income statement in the third quarter is creating new opportunities for future impact.
The lasting effects of the COVID-19 pandemic — and the national economic response to it — linger on credit union financial statements.

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