Credit Unions in Canada Industry Market Research Report Now Available from IBISWorld

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Over the next five years, consolidation, which has allowed credit unions to reduce labour costs and take advantage of new technologies, will continue to help credit unions increase their asset base, enabling them to better compete with commercial banks on fee pricing and interest spreads.

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Firms will consolidate to increase their asset base and better compete on fee pricing

Following the collapse of the financial system in the United States, the Canadian economy fell into a recession in late 2008. Despite financial uncertainty and a tighter lending environment, the Credit Unions industry has managed to achieve moderate growth over the past five years. While a historically low overnight rate has hindered growth of interest income, it has also helped to stabilize credit unions' loan portfolios, allowing them to offer members very reasonable interest rates. Unlike the US recession, Canada's housing market did not completely collapse, offering some consistency to credit unions. Consequently, industry revenue is expected to increase at an average annual rate of 3.6% to $11.4 billion in the five years to 2013, with revenue estimated to rise 3.8% in 2013. Unfortunately, Canada's housing market is expected to falter in 2013, as housing starts are expected to drop 9.4%. Such a drop will hurt residential mortgage portfolios due to lower house prices and less real estate activity, says IBISWorld industry analyst Eben Jose. Additionally, persistent pressure from commercial banks will limit credit unions' ability to gain market share in key markets, such as personal banking and commercial banking customers.

The Credit Unions industry has a low level of market share concentration, with Vancity being the only major company in 2013. Most credit unions are small and hold relatively small shares of assets, and the need for a greater variety of services and economies of scale has resulted in consolidation, continues Jose. Credit unions continue to meet these needs through merger and acquisition activity. For example, Meridian Credit Union, which operates in Ontario, recently completed the acquisition of all of Desjardins Group's credit unions in the province. Rising external competition is nothing new for the industry. In fact, it has been taking place for the past decade. As a result, the Credit Union industry has been consolidating, with the number of enterprises declining at an annualized rate of 5.7% to 845 companies in the five years to 2013. Such consolidation has led to gains in economies of scale, because industry participants have been able to reduce labour, aided by new technology.

In the five years to 2018, IBISWorld expects the industry to continue to consolidate. The implementation of the Jobs and Economic Growth Act, which aims to improve credit unions' ability to expand nationally, will help credit unions' compete with commercial banks, but it will not offset banks' advantages in leverage and technology. Consolidation will continue to help credit unions achieve economies of scale and increase their asset base. With increased size, they will be able to compete better on fee pricing and interest spreads. For more information, visit IBISWorld’s Credit Unions in Canada industry report page.

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IBISWorld industry Report Key Topics

This industry consists of financial institutions known as credit unions and caisses populaires. These institutions 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 and Canadian 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 or call 1-800-330-3772.

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Gavin Smith
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