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CUs loan growth delinquency ratio up
MADISON, Wis. (12/5/07)--Credit union loan growth increased and savings growth slowed in October, pushing the movement-wide loan-to-share ratio to its highest level since 1979, according to the Credit Union National Association’s (CUNA) monthly sample of credit unions.
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With loan growth outpacing savings growth, the loan-to-savings ration increased to 84.3% in October from 83.4% in September. The liquidity ratio, which is the ratio of surplus funds maturing in less than one year to borrowings, plus liabilities--dropped to 16.9% in October from 17.8% in September. Credit union loan growth increased 0.9% in October and 7.2% over the past 12 months. Adjustable-rate mortgages led loan growth, increasing 3.6% during October, the biggest monthly increase since July 2006. Other loans, second mortgages, credit card loans, and fixed-rate first mortgages followed, increasing 2.4%, 1.6%, and 0.7% respectively, during the October. Second mortgages, fixed-rate mortgages and credit card loans have grown 1.5%, 14.7% and 14.3% respectively, over the past 12 months.
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Credit union savings balances declined 0.2% in October, but increased 5.5% over the past 12 months. Certificates (1.6%), money market accounts (1.3%), and individual retirement accounts (0.9%), increased, while share drafts (3.4%) and regular shares (2.2%) declined during October. Even though loan balances grew at a healthy rate, loan delinquency rates increased marginally. “Nationwide, credit unions' delinquency ratio rose again, but it's still extremely low compared to long-term historical standards,” Bill Hampel, CUNA chief economist, told a weekly CUNA press teleconference Monday. “Credit union delinquencies are more related to the collateral damage from members who have subprime loans elsewhere and are having difficulty balancing their household budgets after their mortgage interest rate reset. “Some parts of the country are affected more than others, and credit unions in those areas need to be careful during the course of the economic downturn,” he continued. In terms of asset quality, the credit union 60-plus day delinquency rate is up slightly from September (0.84%). The credit union movement’s overall capital-to-asset ratio is 11.6%, up slightly from September (11.5%). The total dollar amount of credit union capital is $89 billion.
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