Published in: CUNA Finance Council
Credit unions posted record profits last year. However, liquidity, repricing and interest rate risks should be key areas of focus for financial cooperatives in 2019.
Don’t Let Strong Industry Performance Lead to Complacency
As the most recently available data show, the U.S. depository system experienced growth in profitability towards the end of 2018, benefitting from widening net interest margins and declining provisions for loan losses relative to average assets. Third quarter average credit union ROA jumped to 1.02%, up from 0.81% one year ago; ROE jumped to 9.52%. Both ROA and ROE for the industry were at the highest levels in over ten years. Total net income grew 33% over the year, posting $3.69 billion—the highest ever. Net interest income and operating revenue saw notable increases, as both increased 11% from the year earlier.
Source: Aggregated data from SNL