When it comes to paying bills, some people have a million excuses (both valid and invalid) for skirting their obligations. Unfortunately, lenders constantly deal with borrowers' excuses when it comes ...
I look forward to CU Data’s statistics and trends report each quarter. It gives our team insights into what the industry is experiencing and how that will impact our clients and their members. In this blog post, I’d like to share some highlights and notable KPIs from the Q1 2021 report.Last year was a challenging year in many respects for the credit union industry. Fortunately, although it is still early, 2021 is shaping up to be a nice recovery year. Here are some key takeaways from the industry report:
- During the first three months of 2021, there was a large increase in deposits and investments.
- With the reduction in loan loss provisions, return on assets (ROA) has rebounded to pre-COVID levels.
- With the influx of deposits, assets have grown significantly while the Loan-to-Deposit ratio continues to shrink.
- While new loan originations are up, so are payments on existing debt, which has caused a slowdown in the growth of outstanding balances.
- YOY auto loan growth remains slow as dealers struggle to maintain inventory.
- With last year’s push to bulk up loan loss provisions and delinquencies remaining low, the Loan Loss Coverage Ratio has surged to an all-time high.
- With the influx of deposits and a slowdown in net loan growth, the growth in investments has continued, even as yields decline.
Overall, 2021 is shaping up to be a better year for credit unions than originally anticipated. Interest rates should remain low with marginal increases possibly later in the year but hopefully loan demand will gain momentum as consumer confidence builds.
As with most financial institutions, indirect loans likely make up a large part of your auto lending portfolio. To learn how to optimize the payments experience for your indirect borrowers, check out our free whitepaper, Digital Payments Solutions to Delight Your Indirect Borrowers—no download required!
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