Credit unions are demonstrating improved efficiency with declining wages-to-income ratios and stronger loan book growth, according to the latest RBK credit union benchmarking report.
Loan book growth was led by demand for home improvement and car loans, and bad debt provisions have decreased to all-time lows.
Reserves remain strong, with all credit unions exceeding the minimum regulatory requirement of 10%.
Nearly two-thirds of credit unions paid dividends in 2024, a substantial increase on the previous year, and the report shows credit unions are making good progress in operational resilience frameworks, although testing remains the primary barrier to full implementation and cybersecurity concerns have intensified.
“Financial indicators have shown considerable improvement across the sector. Investment portfolios are trending downward as a percentage of assets, aligned with the shift towards increased lending. This is a positive development for Credit Unions whose primary mission is providing financial services to members," said RBK partner Ronan Kilbane.
“Human resource management has emerged as a key focus area. With nearly all credit unions expecting to maintain or increase hiring in 2025/2026, addressing structural gaps will be important for sustainable growth.
“Looking ahead, the sector faces several challenges. The operational resilience frameworks that were a key focus in 2024 need further development, with testing remaining the most significant barrier to full implementation.”
Wages-to-income ratios improved in spite of a 4% increase in salaries, and ESG considerations have become mainstream, with over 80% of credit unions now incorporating an ESG policy into their policy framework.
The report found that many credit unions appear to approach vulnerability scanning as a compliance exercise rather than an integral security measure, and a large number of credit unions lack understanding of their Common Bond penetration.
The full report can be seen here.
Photo: Ronan Kilbane. (Pic: Supplied)
