Industry Analysis & Industry Trends
Like the rest of Australia's Finance subdivision, credit unions have been hurt by the successive cash rate cuts over the past five years. As the Australian economy transitions from an emphasis on mining to non-mining sectors, the Reserve Bank of Australia has cut the cash rate to historic lows. This has had a detrimental effect on the interest income generated from credit unions' loan portfolios. Even more damaging was the effect of many credit unions exiting the industry as they converted to bank status, which led to a portion of the industry's revenue and asset base being instead reclassified to the National and Regional Commercial Banks industry. As a result, industry revenue is forecast to decline at an annualised 15.8% over the five years through 2015-16 to reach $1.7... purchase to read more
Industry Report - Industry Key Buyers Chapter
The Credit Union industry exhibits a moderate level of market share concentration, which has been increasing over the past five years. The top four credit unions are expected to account for an estimated 67.2%. The industry has undergone consolidation for many years, particularly as many operators have transitioned to operating as banks and exiting the industry, and there is no sign of this process slowing.
Over the past five years, numerous credit unions were reclassified as mutual banks and exited the industry classification, according to the Australian Prudential Regulation Authority (APRA). This has increased the level of industry concentration. One example includes the Australian Defence Credit Union, which was reclassified as a bank in 2015 to become Australian Military Bank... purchase to read more