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 SWOT Analysis Chapter
The Credit Unions industry is in the declining stage of its economic life cycle. Industry value added, which measures an industry's contribution to the economy, is forecast to decline at annualised 5.2% over the 10 years through 2020-21. This represents a significant underperformance of overall GDP, which is projected to rise at an annualised 2.6%, indicating the industry's contribution to the economy is declining.
One of the major factors in the industry's decline has been the exit of numerous credit unions over the past five years, which has led to industry assets falling and employment declining. There has also been little product innovation due to limited resources and the companies in the industry has struggled to diversify into new markets... purchase to read more