LAKE BLUFF, Ill.-Keep those expense cutting knives out and quit waiting for a return of the pre-recession net interest margins, one person is urging.
Credit unions' expense ratios remain "way too high," said Mike Moebs of Moebs $ervices, who stressed that CUs need to reduce non-interest expense by a minimum of 20% and increase fee income by at least 20%. "It's simple numbers. Do that and we will get net income of above 1%-or we are going to face the same thing that the banks have faced and closing after closing will go on," said Moebs, whose firm recently
A nother fact: net interest margin will never reach pre-September 2008 levels, he said, noting that credit unions must prepare for further assessments from NCUA. That money will also allow credit unions to increase their capital position and grow. "Again, I am not calling for a massive amount of profitability, I am calling for just enough," said Moebs, referring to his financial formula. "Do these two things and credit unions will be prepared for any additional assessments and they will start rebuilding their capital."
