CU loans, mortgages show growth
MADISON, Wis. (10/3/07)--Credit unions saw sustained growth in loans outstanding and mortgages during August, according to the Credit Union National Association's (CUNA) monthly sample of credit unions.
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Credit union loans outstanding increased 1.3% in August, growing 6.7% over the past 12 months.
Other loans, other mortgage loans, and adjustable-rate mortgages led loan growth, increasing 3.3%, 3.1% and 2.6%, respectively.
Balances in other mortgages have increased 19% over the past 12 months, followed by credit card loans outstanding (14.9%).
"The August monthly estimates are sending a strong, clear message that things have changed," Mike Schenk, CUNA vice president of economics and statistics, told News Now.
He noted consumers are beginning to mend their balance sheets. "They are less confident than they have been in the past," he said. "They are spending less, borrowing less, and saving more."
"This is reflected in the 12-month loan growth, which is lower than 12-month savings growth," he continued. "Typically, when people save more than they borrow, it would be associated with a very slow economy or a recession."
Schenk said he believes the economy will avoid a recession, but foresees below-trend growth through 2008.
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Credit union savings balances grew 1% in August, 7.1% over the past 12 months. The monthly increase is largely due to the payday falling on the last day of the month, with share draft growth at 5.7%.
While certificates (1.1%), individual retirement accounts (0.7%), and money markets (0.3%) increased, regular shares fell 0.8% during August 2007.
Despite the ongoing turmoil in the mortgage markets, credit unions 60-plus day delinquencies have remained steady at 0.7% over the past five months.
Regarding liquidity, with loan growth slightly outpacing savings growth, the loan-to savings ratio increased from 82.3% in July to 82.6% in August. The liquidity ratio,--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--was 18.1% during August, up about 1.5 percentage points from last year.
While the movement's overall capital-to-asset ratio decreased slightly from 11.5% in July to 11.4% in August, the total dollar amount of capital went from $81.9 billion in August 2006 to $87.7 billion in August 2007, a 7.1% increase.
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