Capital ratios sound for CUBS
The top 10 credit unions lifted their market share of the sector from 62.5 per cent, in 2009, to 65.4 per cent, in 2010, the annual KPMG survey of the sector shows.Within the top 10, the merger of Savings & Loans with Adelaide rival Australian Central is the primary driver of this rise in a year in which credit union mergers have become a little less common. The unified credit union business in Adelaide will trade under the name People's Credit Union from next year. The 57 credit unions surveyed by KPMG reported a combined net profit of $300 million.APRA data shows a combined net profit for the sector's 112 credit unions of $323 million, which leaves 55 of the smallest credit unions with a profit of $23 million.Three credit unions in the KPMG survey that reported losses in 2009 (InTech, Manly Warringah and Service One) all returned to profit in 2010.With only organic profits available to support asset growth, credit unions will be satisfied that one legacy of their industry is a capital adequacy ratio of 17.7 per cent.Building societies, in which there are mutual and listed entities, lifted their capital ratio to 15.90 per cent, from 14.1 per cent.