ARLINGTON, Va.— As interest rates inch up, credit union ROA is dipping along with net interest margin, according to NAFCU’s October Economic & CU Monitor.
The monthly survey of NAFCU members showed that net interest margin for survey participants decreased by one basis point in August to 2.49%; ROA fell by eight basis points to 0.78%. CUs’ average net worth ratio slipped by seven basis points to 10.62%.
NAFCU said though the long-term trend for ROA has been favorable since 2008, declining fee income should continue to exert downward pressure on ROA.
The survey also found that member growth remained strong at 4.8% for August. Year-over-year share growth remained at 5.8% and loan growth increased to 8.4% from 7.8% in July.
Looking at education and training budgets, the report indicated that 38% of respondents plan to increase those spending lines in 2014, while 3.4% said they expect to decrease them.
