Credit unions, banks, and thrifts all had outstanding performances in 2003. While credit unions experienced the highest asset growth of 11.11% for the year, the cooperative movement still accounts for only 6.3% of all deposits. Each sector posted excellent returns on their assets, with banks leading the way at 1.39%, a 19 basis point increase from 2001. Banks and especially thrifts continued to have a higher loan/deposit ratio than credit unions due to their higher reliance on wholesale funding through borrowings. Banks and thrifts also managed more assets with fewer people, over $4.2 million in assets per employee. On the other hand, banks’ 0.88% net charge-off ratio was much higher than credit unions and thrifts at 0.55% and 0.31% respectively.
The below chart details some key data for the three financial institution types. While Credit Unions' ROA was lower than both banks and thrifts, credit unions' Capital/Assets ratio was higher than both of the other institutions. What do the similarities and differences say to you? We'd love to hear your comments below.