Profit lower in CUBS sector

KMPG yesterday collated some data on the financial performance of credit unions and building societies, a neglected topic even though the sector, like all ADIs, is now reporting some loan and credit quality data quarterly.

The firm said deposit growth was reasonable during the first nine months of the financial year (ranging from 10.5 per cent for credit unions to 4.2 per cent for the regional banks).

Major banks, however, helped by the government guarantee, are reporting deposit growth in the order of 16 per cent.

Average loan growth over the nine months ranged from 4.3 per cent for credit unions to 7.7 per cent for building societies. Home loan growth was the main contributor and business and consumer lending lagged, KPMG said.

While the sector remained profitable overall in the December 2008 half year, credit unions reported a 30 per cent decrease in profit and building societies a four per cent decrease.