Until credit unions can place a larger share of assets intomember loans, deposit growth may continue to stall.
|That's the forecast according to CUNA Mutual Group's DecemberCU Trends Report.
|Growth will also be controlled by continued low deposit pricing,the report noted. CUNA's data showed the national average ratespaid on deposits fell again to new record lows. This trend isreaffirmed by NCUA third quarter data that showed credit unions'cost-of-funds at just 59 basis points, down 15 basis points from ayear ago.
|During the past year, the 9.2% annual gain in regular sharesaccounted for 63% of savings growth and the 12.3% gain in sharedrafts contributed 32%, the data showed. When combined with moneymarket accounts, 116% of the savings gain was attributable toliquid deposit accounts; certificates of deposit and individualretirement account balances were down year-to-date andyear-over-year.
|Savings and assets unexpectedly ticked up in October, thelatest month tracked, with 78% of the deposit gain attributable toan increase in share draft balances, said CUNA Mutual ChiefEconomist Dave Colby in the report. November deposits were expectedto be higher than usual due to five payroll Fridays in themonth.
|Meanwhile, total credit union assets climbed to $1.087 trillionin October, reflecting 5.4% annual growth. Colby said the long-termtrend rate of asset growth was 6.2% or 77 basis points higher.
|Still, not all credit unions are growing assets, Colby pointedout. According to third quarter data, 2,306 of them or 34%,reported asset declines during the past 12 months. These creditunions hold 10% of industry assets, he added.
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