The Prudential Regulation Authority has released their 2018 Credit Union statistics. We have carried out our annual examination of the results for Scotland, England and Wales and what they tell us about the British Credit Union sector.
Loans have again increased at a faster rate than shares with loan growth for British Credit Unions exceeding 8%, a similar level to that reached in the previous year. Share growth has dropped from 6.4% to 3.8%. This is to be expected with a number of Credit Unions restricting shares to help meet their capital ratio. Overall this trend has helped boost the sector’s capital to asset with ratio increasing again this year to 11.79%.
The increase in loans has come at the cost of bad debts which have continued to grow. Bad debt expense to loans has now risen to 2.27% compared to 2% in 2017 and 1.85% in 2016. That represents a 23% increase in bad debt to loans over the last two years and is a worrying statistic.
Overall Credit Union membership continues to rise although the number of Credit Unions continue to decrease with nearly 23% less annual returns submitted than in 2014.