Building societies, credit unions struggle to grow market
Although building societies and credit unions have performed well and have experienced reasonably steady growth over the past year, they are still struggling to increase their market share, according to a new KPMG report.
The KPMG Financial Institutions Performance Survey 2007 found that assets for building societies and credit unions had grown by 11.2 per cent and 11.6 per cent respectively, deposits by 11 per cent and 6 per cent and profitability by 14.3 per cent and 16.4 per cent.
The report said the sector had achieved “outstanding” results and continued to enjoy “historic lows in credit losses despite recent interest rate rises and early signs of financial stress in some sectors of the economy”.
However, the report also found that building societies and credit unions were still struggling to increase their market share.
Adrian Lovney, chief executive of industry body Abacus Australian Mutuals , said the sector’s strong performance was a testament to its dedication to responsible lending practises, and that this was more important than increasing market share for the sake of it.
“The fact we outperform the rest of the market in asset quality and bad debts demonstrates our commitment to members first and to ensuring we do as much as possible to help them avoid financial difficulty. This is the essence of what mutuality and responsible lending is all about.”
The report was based on a survey of 81 of Australia’s largest building societies and credit unions, which collectively represent more than 90 per cent of the sector in terms of net assets and profits after tax.
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