The Battle of the Branches

Although credit unions cannot compete with banks in terms of their branch network coverage, many credit unions are developing innovative branching strategies and reaping results.

 
 

According to the FDIC, there are over 92,400 bank and thrift branches in the United States as of June 2005. In contrast, credit unions have 19,734 branches nationally. Bank and thrift branch growth is slightly outpacing credit union growth, with banks and thrift branches increasing 2.2 percent versus 2.1 percent for credit unions.

The industry leader in branch growth for banks and thrifts was Citigroup which added 117 branches over the past year. Desert Schools Federal Credit Union ($2.4 billion, Phoenix, AZ), the fastest growing credit union in terms of branches, only added 18 branches in the same period.

Desert Schools' branching strategy is based on a partnership with Wal-Mart. In addition to a 15.2 percent increase in shares, the credit union also grew its members by 8.9 percent from last year. As the chart below illustrates, Desert Schools' successful branching strategy has resulted in the credit union becoming the fourth ranked financial institution in its county in share deposits.

 

Adding branches is one tactic that credit unions can use to enhance member value and increase share deposits. Average share growth for the 781 credit unions that added at least one new branch is 7.7 percent compared to the industry average of 4.2 percent.

Credit unions may not be able to compete with the largest banks in building branches, but they can still be successful in their local markets through unique strategies such as Desert Schools’ partnership with Wal-Mart. To learn more about other credit union strategies and broad industry data check out our newly released 2006 Credit Union Directory.
 

 

 

Nov. 7, 2005


Comments

 
 
 
  • You might have mentioned that the #1 branch growing bank, Citicorp has over 33 times the assets (68.8 Billion) of the #1 branch growing credit union. For Citicorp... 1 new branch for every 588 million dollars in total assets; Desert Schools averaged one new branch per every 133 million dollars in assets. --Size matters.
    Anonymous
     
     
     
  • We are a design/build frim working only in the financial industry. Branching information is very useful to us.
    Anonymous
     
     
     
  • Very interesting as Wescom Credit Union opens branches in Super Markets in S. California.
    Anonymous
     
     
     
  • We are looking to expand our branch network over the next 3 years.
    Anonymous
     
     
     
  • Title promised more than article offered
    Anonymous
     
     
     
  • Any story behind what State Employees (NC) is doing?
    Anonymous
     
     
     
  • very shallow depth...
    Anonymous