Through August the average ROA of the 33 “retail” corporate
credit unions has fallen from 32 basis points one year ago to 22
bp in August. Why?
There are three factors that cause the bottom line:
- Two revenue sources: the net interest margin and non-interest
- Operating expenses.
Looking at the last 36 monthly results, there are two events that
coincide with the changes in the bottom line. From January through
April of 2001, total assets in the Corporate system increased 50%.
This sudden jump lowered the operating expense ratio to average
assets, a change partially offset by a fall in the non-interest
income to average assets.
monthly ROA for all corporates continues to fall (22 BP in August)