Competition from commercial banks, savings banks and other lenders is pushing fees down.
Los Angeles, CA (PRWEB) September 12, 2013
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,” according to IBISWorld Industry Analyst Caitlin Newsom. Revenue continued growing in 2012 as a result of a stabilizing economy and a larger customer base due to loosening member requirements. This growth trend is expected to continue over 2013, with revenue forecasted to increase 5.4% to $46.7 billion. However, revenue did not grow every year over the five-year period. 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 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,” says Newsom. 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.
In the next five years, the industry is set to continue on a steady upward trajectory. 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.
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IBISWorld industry Report Key Topics
The Credit Unions 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.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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