Credit union assets surged in May: CUNA Mutual
Total credit union assets rose twice as fast in May compared with a year earlier as members reduced spending and increased saving, according to the latest Credit Union Trends Report from CUNA Mutual Group.
That study reported 2.6% asset growth during May, compared with 1.3% in May 2019. Overall assets rose 14.7% in the year ending May 31, due largely to a significant increase in deposits (15.3%), a decline in borrowing (5%) and a jump in capital (9%).
Loan balances continued to grow at a slower pace than savings, and the industry’s average loan-to-share ratio fell more than six points, to 76.8%, from 83% in May 2019. Loan balances ticked up 1% in May, higher than the 0.6% reported a year earlier, but most of that growth came from mortgages.
Those trends are in line with broader shifts seen in the wake of the coronavirus and recession. CUNA Mutual’s latest report predicts an annualized economic contraction of 35% during the second quarter, with unemployment staying at 8% until at least the end of next year. Low inflation and quantitative easing measures worldwide are likely to keep the 10-year Treasury rate below 1.5% until sometime in 2022, the firm forecasted.
Membership grew at a 1.3% seasonally adjusted, annualized rate. That is significantly below the pace recorded in recent years, CUNA Mutual said. The group said it expects members to increase by 1.5% for 2020 and 2% each year for the next two years.