Credit Unions in the US Industry Market Research Report Now Available from IBISWorld

Share Article

As the industry consolidates, it will be better able to compete with other lending institutions, allowing both revenue and profit to improve over the next five years. For this reason, industry research firm IBISWorld has updated its report on the Credit Unions industry.

News Image
Competition from commercial banks, savings banks and other lenders is pushing fees down.

The Credit Unions industry has been on a roller-coaster ride over the five years to 2013. Revenue is expected to grow an average of 4.4% annually over the period. The housing market crash and financial crisis of 2008 caused banks to limit their lending. Credit unions quickly filled this void and increased their lending, in turn increasing industry revenue. Revenue continued growing in 2012 on the back of a stabilizing economy and a larger customer base due to loosening member requirements. According to IBISWorld industry analyst Caitlin Newsom, these growth trends are expected to continue over 2013, with revenue rising an estimated 5.4% to $46.7 billion. However, revenue did not grow every year. In 2010 and 2011, revenue faltered due to corporate credit unions' failures from the housing market crash.

Even though revenue is growing, the industry is consolidating, primarily to cut costs and take advantage of economies of scale. Over the five years to 2013, the number of credit unions has contracted at an average annual rate of 2.9% to total 6,313 enterprises. “Credit unions are better suited to offer lower interest rates, thanks to their nonprofit status and dedication to providing satisfying customer service. As a result, membership has consistently grown over the past five years and is expected to continue climbing to record levels over the five years to 2018,” says Newsom. The Credit Unions industry has been facing tough operating conditions, and firms are realizing that operational efficiencies are required to compete effectively against larger financial institutions, such as major commercial banks. Most credit unions are small, and hold relatively small shares of credit union assets and revenue. IBISWorld estimates that the largest player in 2013 is Navy Federal Credit Union. Many smaller companies have merged to be able to offer more services. Furthermore, many credit unions are beginning to see the benefits of cooperative agreements, where firms essentially join forces, eventually leading to consolidation. As a result, IBISWorld expects industry consolidation to increase in the next five years, leading to rising market share concentration over the period.

In the next five years, the industry is set to continue on a steady upward trajectory. Revenue and membership will continue to grow as demand returns and credit unions service a larger portion of the US population. As the industry consolidates, it will be better able to compete with other lending institutions, such as commercial banks, savings banks and other nonbank lenders, which can offer greater access and a wider selection of services due to their size. As consolidation continues and online services increase, credit union membership is expected to keep growing over the next five years. For more information, visit IBISWorld’s Credit Unions in the US industry report page.

Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189

IBISWorld industry Report Key Topics

This industry consists of financial institutions known as credit unions or cooperatives. Credit unions are member owned and provide banking services, mainly deposit taking and lending, to these same members.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Gavin Smith
Visit website