Does Size Make a Difference: A Look at the 100 Largest Credit Unions:

Chip Filson analyzes year-end 2000 data and examines ways credit unions of different sizes can maximize their competitve advantage. With the exception of the expense ratio, almost all differences in financial performance are minor. The lower operating expense ratio does suggest that there are some economies of scale. Part of this benefit is passed back to members who receive a higher proportion of total revenue in dividends at 48.39%, as compared to the 43.04% of total revenue returned to members at all credit unions. This fact may explain the slightly faster share and member growth rates. However before concluding that economies of scale work for everyone, it should be noted that several of the top 100 had very slow share growth rates-less than 1%. Also the range of earnings as measured by the ROA shows a wide variation from a low of 44 basis points to a high of 2.28%. Size does not automatically guarantee a certain result.