CU CEO Confidence In Doldrums
PLANO, Texas-Credit union executives' outlook on the nascent economic recovery remains static, with Southwest Corporate FCU's CEO Confidence Index second quarter results nearly identical to the first quarter.
The index registered 20.73, a slight decline of .22 from the last quarter. That number is up precipitously from the all-time low of 7.9 recorded in Q1 2009, but well off the high of 47.4 the index registered in Q2 2004.
In the poll, CEOs are asked to rate confidence acorss six areas of economic expectations on a five-point scale. Three of the six gauges in the most recent survey-member financial condition expectations over the next six months, CU financial conditions and loan demand-also remained nearly static, varying less than one point from last quarter.
"Most credit unions don't know what to expect from the economy. This is one year we can't predict. Low interest rates, the corporate stabilization program, and new regulations coming out all will affect overall earnings," Helen Delin, CEO at $36 million NAS JRB CU in New Orleans, La., said in a statement. "Credit unions were told that 2010 would be the most difficult year, so we're just holding our breath, hoping to get through 2010 and see conditions improve."
Expectations for share deposit growth fell more than seven points quarter to quarter, while current financial conditions of both members and credit unions ticked up slightly.
"The consumer continues to be wary of the weak employment climate and lost household wealth, to the point that many are deferring large ticket purchases, such as homes, cars and appliances," said Brian Turner, director of Southwest Corporate Investment Services' advisory service. "[P]ent up loan demand could spark a short-term burst of activity later this fall-particularly in vehicle lending. This burst would not be enough, however, to create sustainable growth."