Profits recover for credit unions

The beginnings of a recovery in profit are under way for credit unions after a difficult financial year, quarterly data prepared by the Australian Prudential Regulation Authority shows.

Aggregate profit for credit unions in the September 2009 quarter was $67.9 million, up from $25.3 million in the June 2009 quarter and roughly in line with quarterly sector profits during the year of the original credit crunch of 2007/08, before the financial crisis hit with force.

Balance sheet growth for the sector is not bad, though still well behind that enjoyed by banks.

Home loan growth for Australia's 114 credit unions was 11 per cent over the year to September 2009, which is ahead of growth in housing credit overall, given the reduced lending from non-bank entities.

The sector recorded growth in deposits of 10 per cent over the year to September 2009, with a slight weighting to growth in term deposits over the full year. This has eased, with growth in at-call deposits more prominent recently.