Credit Union lending rises by 7%

The Bank of England has published its annual Credit Union statistical report based on annual return data for the credit union financial year. The report showed that total Credit Union members has surpassed 2 million in the UK for the first time, driven by a rise in Adult members in 2018 (3%). Whilst Loans to Credit Union members has also risen (7%) in the UK and has passed £1.5 billion for the first time.

Commenting on the statistics, ABCUL’s Head of Policy & Communications, Matt Bland, said “This week’s data shows a British credit union sector which is continuing the painstaking and difficult work of building sustainable co-operative businesses in the context of withdrawn external subsidy and stiff capital requirements – and having notable success.”

“Growth rates are down at 4% in the year for membership and assets – which is below the historical trend – and we think this is reflective of a conscious management of growth in light of escalating capital requirements as credit unions grow.  This demonstrates the urgent need for the Bank of England to review the current calibration of its credit union capital rules.”

“On the upside, British credit unions’ long-standing challenge with lending enough of their assets is showing signs of improvement as loan growth was double that of assets at 8%. As a result the overall sector’s loan-assets ratio continues to improve year on year.

“Similarly, investment balances were down slightly as credit unions lend funds previously placed on deposit.  And while the growth in lending has seen a jump in bad debt, the sector’s profitability is up as are capital holdings across the sector despite grants being down by 14%. In the round, therefore, we think the figures reflect an improving overall sustainability picture despite significant headwinds.”

ABCUL, represents Credit Unions in England, Scotland and Wales.