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CU System
2011 another year for negative CU loan growth
MADISON, Wis. (10/3/11)--Although credit union loans slightly increased in August, the trend for the year likely indicates negative loan growth, according to a Credit Union National Association (CUNA) economist’s analysis of August’s monthly sample of credit unions.
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Credit union loans outstanding rose 0.3% during August, compared with a 0.2% increase in July. Adjustable-rate mortgages led loan growth with a 1.4% gain, followed by unsecured personal loans (1.1%) and used-auto loans (0.9%). Credit card loans climbed 0.5%, while home equity loans went up 0.3%. New-auto loans decreased 0.4%, and fixed-rate mortgages declined 1%. Credit union loans totaled $580.9 billion, compared with $582.9 billion in August 2010, said the monthly estimates. "2011 is shaping up to be another year of negative loan growth for credit unions,” Steve Rick, CUNA senior economist, told News Now. “Over the 12 months ending in August, credit union loans balances fell 0.3%. With income, jobs and retail sales growth weak in September, we don’t expect much additional loan growth for the remainder of the year. “We are expecting loan growth to rise 3% in 2012 after three years of basically zero growth and a buildup of pent-up demand,” he added.
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Credit union savings balances decreased 0.5% in August, compared with a 0.2% increase in July. Regular shares grew 2.2%, followed by individual retirement accounts (0.5%). One-year certificates fell 0.2%, and money market accounts and share drafts decreased 2.9% and 4.5%, respectively. Credit union savings in August totaled $827.1 billion--or $32.2 billion more than the $794.9 billion in August 2010. Credit unions’ 60-day-plus delinquency rate remained at 1.6%. “Loan credit quality continues to improve as credit union loan delinquency rates hit 1.55%, down from 1.78% in August 2010,” Rick said. “We believe delinquency rates will continue to improve through 2012, falling below 1.2% by this time next year,” he added. Credit unions’ loan-to-savings ratio remained at 70%. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 19%. The movement’s overall capital-to-asset ratio remained at 10%. The total dollar amount of capital is $99 billion.


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