Branch Investment Strong in 2002, Expected to Continue

The physical branch remains an important sales and service channel for credit unions, despite the development of electronic means like ATMs and Internet home banking. Branches are still the prime source of loan originations, a crucial factor in evaluating overall credit union performance. They also play an important role in building relationships with current members and attracting new ones - especially critical for credit unions with community field of membership.

 
 

The physical branch remains an important sales and service channel for credit unions, despite the development of electronic means like ATMs and Internet home banking. Branches are still the prime source of loan originations, a crucial factor in evaluating overall credit union performance. They also play an important role in building relationships with current members and attracting new ones - especially critical for credit unions with community field of membership.

Branch investment continues to grow every year. Last year, credit unions spent over $8 billion on land and building acquisitions, a 12% increase over 2001. This trend is expected to continue through 2003, as over half of the large (assets of $50 million or more) U.S. credit unions responding to a recent Callahan & Associates survey said they planned to add at least one new branch this year. Only about 15% of respondents indicated that they planned to close a branch by year-end. Thus, credit unions will continue to seek cost-effective ways of improving branch performance.

Last month, Callahan & Associates initiated a research study to discover credit union benchmarks and best practices in the area of branch management. One of the areas analyzed by the study is the average loan amount generated per branch employee. This figure was calculated using a combination of 2002 year-end call report data and information provided by responding credit unions. Based on this data, branch-originated loans averaged about $1.14 million per employee in 2002.

The chart below shows data on the top 5 credit union leaders, as ranked on this measure.

 

 

 

Feb. 24, 2003


Comments

 
 
 

No comments have been posted yet. Be the first one.