Credit edit: Credit unions being reclassified as banks has caused revenue declines

Following successive cash rate cuts have negatively affected the Credit Unions industry's performance over the past five years. In an effort to stimulate the Australian economy, the RBA has cut the cash rate to historic lows. The cuts have had a detrimental effect on the interest income generated on credit unions' loan books. Even more damaging has been the effect of many credit unions exiting the industry due to their conversion to banks. As a result, a portion of the industry's revenue and asset base has been reclassified to the National and Regional Commercial Banks industry. Subsequently, industry revenue is expected to decline at an annualised 13.0% over the five years through 2017-18, to $1.53 billion. Industry revenue is anticipated to decline by 7.0% in more.

Industry Statistics & Market Size
Annual Growth 13-18
Forecast Growth 18-23

Industry Threats & Opportunities

  • Many credit unions have exited the industry due to their conversion to banks
  • Enterprise numbers are declining as larger players transform into banks to remain competitive
  • Credit unions are projected to increase their brand visibility and expand their loan portfolios
  • Industry Report - Industry Products Chapter

    Operators in the Credit Unions industry largely offer the same products and services as the commercial banks, though of a more limited variety due to their smaller size and reduced resources. Unlike banks, which have a customer base split between retail and commercial clients, credit unions primarily service retail customers. As a result, credit unions' most popular products are residential mortgages and other retail banking services.Residential mortgagesResidential mortgages mainly consist of housing loans for homeowners and investors. These loans can be variable or fixed-interest mortgages with maturities that can be over 20 years. His...purchase to read more.

    Additional Insights for the Credit Unions Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Credit Unions Industry are

  • Access to the latest available and most efficient technology and techniques
  • Having an extensive distribution/collection network
  • Financial position of the company (as against financial structure)
  • IBISWorld analysts also discuss how external factors such as Cash rate and Consumer sentiment index in the Credit Unions industry impact industry performance..

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    What's in this report

    What is the Credit Unions Industry?

    The industry consists of financial institutions known as credit unions or cooperatives, which are owned by their members. Industry players provide their members with banking services, mainly deposit taking and lending.

    Industry Products
  • Residential mortgages
  • Personal loans
  • Commercial loans
  • Deposit accounts and other
  • Industry Activities
  • Mortgage lending
  • Personal lending
  • Commercial lending
  • Deposit accounts
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Cash rate
  • Consumer sentiment index
  • Mortgage affordability
  • Residential property yields

  • Current Performance
  • Cash rate
  • Bad debts
  • Regulation
  • Consolidation and exit
  • Chart: Revenue Growth

  • Industry Outlook
  • Funding limitations
  • Cash rate
  • Competition and reforms
  • Consolidation
  • Table: Credit Unions Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Credit Unions Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Accounting Services
  • Custody, Trustee and Stock Exchange Services
  • Legal Services

  • Products & Services
  • Residential mortgages
  • Deposit accounts and other
  • Personal loans
  • Commercial loans
  • Chart: Credit Unions Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Owner-occupied property buyers
  • Household and commercial sector
  • Investor property buyers
  • Chart: Major Market Segmentation for the Credit Unions Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Interest expense
  • Wages
  • Other
  • Chart: Cost Structure Benchmarking – Sector vs Credit Unions

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Credit Unions Industry

  • Industry Globalization
    Credit Union Australia Ltd, Australian Central Credit Union Ltd, Queensland Country Credit Union Ltd,
  • Table: Credit Union Australia Ltd - financial performance
  • Table: Australian Central Credit Union Ltd - financial performance
  • Table: Queensland Country Credit Union Ltd - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Credit Unions Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Credit Unions Industry
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • Total Assets (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Common Equity Tier 1 (Cet1)
  • Capital as defined by Basel III regulations that are used in calculation of capitalisation ratio, and includes common equity and retained earnings.
  • Interest Rate
  • A rate charged on funds borrowed (lent) that is repaid (paid out) over and above the principal amount borrowed.
  • Mortgage
  • A loan financing the purchase of real estate with specified payment periods and a fixed or variable interest rate.
  • Mutual Organisations
  • Organisations owned by and for the benefit of members. They exist for raising funds from their members, which are used to provide common services to all members.
  • Write-Off
  • A loan that is deemed to be not collectible where the remaining amount is written off as an expense.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Credit Unions market research report provides the latest industry statistics and industry trends, allowing you to identify the products and customers driving revenue growth and profitability. The industry report identifies the leading companies and offers strategic industry analysis of the key factors influencing the market.

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    This report on Credit Unions:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
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    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Credit Unions market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
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