ALEXANDRIA, Va. – NCUA reported this morning that the continued economic slowdown pushed lending at the nation’s credit unions down almost 5% for the first quarter, one of the worst quarters for lending on record.
Deposits continued to pour into credit unions in the first quarter, increasing almost 11%, putting increased pressure on bottom lines. Even still, return-on-average assets for the industry was 0.47, but that is before most credit unions set aside funds they will need to pay an NCUA assessment later this year, which could wipe out the ROA for many of the nation’s 7,498 federally insured credit unions.
"Even though the industry’s delinquency and charge-off ratios edged lower in the aggregate, credit unions in certain markets are confronted with much higher loan losses – particularly in “sand states” where many real estate and business loan portfolios are underwater,” said Debbie Matz, chairman of NCUA.
“Some of the short-term numbers are moving in the right direction,” Chairman Matz pointed out. “However, credit unions still have a long way to go before overcoming all of the residual issues from the economic downturn of the past two years.”
