Credit unions and building societies posted strong performances in 2007 according to KPMG’s Financial Institutions Performance Survey 2007 Building Societies and Credit Unions.
Building societies and credit unions’ profits grew by 14.3 per cent and 16.4 per cent respectively as a result of continued asset growth coupled with continued cost control, the survey found.
The survey also noted a 15.7 per cent asset growth for building societies and 11.6 per cent for credit unions. Deposit growth for building societies reached 11 per cent and 6.9 per cent for credit unions.
“[The KPMG] survey report demonstrates that credit unions and building societies are a strong force in the market with strong growth in assets, deposits and profits, and high asset quality,” said Abacus – the industry body for mutuals – chief executive officer Adrian Lovney.
“The fact we outperform the rest of the market in asset quality and bad debts demonstrates our commitment to members first and to ensuring we do as much as possible to help them avoid financial difficulty. This is the essence of what mutuality and responsible lending is all about,” he said.
However, the survey also highlighted that the growth of the sector is not being matched by systems growth – leading to a slide in market share as well as some consolidation.
“We’re now seeing M&A activities cross sector, in particular Bank of Queensland’s friendly takeover of Pioneer Permanent Building Society in November 06 and its more recent proposed merger with Home Building Society and offer for Mackay Permanent,” said KPMG financial services partner, Martin McGrath.
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