Squeeze Continues For CUs

Register now

ALEXANDRIA, Va. - (05/23/05) -- The continued low rate environmentfor loans and interest-earning assets maintained its grip on creditunions in the first quarter, squeezing profitability to anotherlackluster return-on-average assets (ROA) of just 0.92%. That's thesame as in 2004 and near five-year lows. Otherwise credit unionshad a strong quarter, according to NCUA, with the average loandelinquency ratio dipping to a three-year low of just 0.64%, andthe charge-off ratio declining to 0.5%. Shares grew by a healthy2.5% in the quarter, traditionally a strong period for depositgrowth, while loans expanded by 1.1%. Membership also grew by astrong 0.6% during the three months. The number of federallyinsured credit unions continued to decline, slipping below 9,000for the first time since the advent of the National CU ShareInsurance Fund--to 8,945--at March 31.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER