Credit Unions Increase their Loan Portfolios through new Lending Initiatives

Among the fields NCUA added to the call report for 2002 was the New Programs or Service Offerings. Read about which 12 credit unions reported the implementation, or planned implementation, of at least 5 new lending services!

 
 

Among the fields NCUA added to the call report for 2002 was the New Programs or Service Offerings. Defined as a "program implemented since the previous filing or with a planned implementation within the next six months," we can now gauge which credit unions are taking initiative to increase their performance or better serve their members through new services. Half of the new service categories are lending focused, and many of the credit unions that have reported these service implementations are already seeing the benefits of their new programs.

Twelve credit unions reported the implementation, or planned implementation, of at least five new lending services. These twelve credit unions' combined loan to share ratio is a slightly lower than average 67.4%. It does not appear that this ratio will remain below average for very long however, as their 3.4% average first quarter loan growth is nearly three times the industry's average of 1.2% for all credit unions over $50 million in assets. It appears that all of these loans are having a positive effect on their overall performance as well; these twelve credit unions returned 1.37% of their average assets at first quarter's end, compared to an industry average of 1.07%.

These new loan services vary from the broad implementation of an entire loan type, like real estate loans, to the addition of a new service catalyzing a loan that's already in existence, like indirect lending. While these new services provide new opportunities for both the credit union and their members, it doesn't seem to be taking a toll on their budget as these credit unions' average operating expense to average asset ratio is only 2.5%, six-tenths of a percentage point below the industry average.

 

 

 

July 22, 2002


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