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New Avenue to Sustain Bottom Line Credit Union Growth

November 30, 2012


The November 2012 article by Parth Kapoor titled The Importance Of Non-Interest Income To Sustainability highlights some very interesting revenue trends.

From the article:

Credit unions are adapting to the low-rate environment and posting strong financial performance. Loan rates are down across the board, which has forced credit unions to find new sources of revenue. Non-interest income is now up to 1.07% of average assets — that’s an increase of nine basis points from 2011 — and non-interest income now represents 28.0% of total income for credit unions.

“Consumers are flocking to credit unions for all the right reasons,” says Hank Sigmon, CFO of First Tech Federal Credit Union ($5.6B, Palo Alto, CA). “But in this ultra-low-rate environment we are having trouble generating sufficient retained earnings and capital to support that growth. The Federal Reserve announced that it is going to keep interest rates low, so the net interest margin will remain under pressure for some time.

To accommodate for that pressure, credit unions are exploring new avenues to ensure sustainable growth to their bottom lines regardless of larger, macroeconomic pressures.

Financial institutions from all accross North America have been reaching out to workforce optimization vendors, like FMSI, as an example of one of these “new avenues” to sustain bottom line growth.  Learn more about improving the utilization of your workforce by downloading FMSI’s workforcue utilization white paper.

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