WASHINGTON — While some will debate the importance of non-interest income to credit unions, most agree it is here for the long haul.
Non-interest income is not a brand new phenomenon for credit unions, economists agreed. "The non-interest income component is rising among credit unions. The interesting thing is it's been rising for quite some time," NAFCU Chief Economist Tun Wai remarked.
CUNA's data bore that out as well. Net interest margins have been shrinking in recent years to 3.38%, CUNA Chief Economist Bill Hampel noted. In the 1990s the figure was closer to 4%. Non-interest income is important, he said because credit unions need enough income to cover the loss of margin. In 2003 the net interest margin was 338 basis points and operating expenses 319 bps. The two crossed at 324 bps in 2005 and, as of mid-year 2007, the net interest margin was at 312 bps and operating expenses at 335 bps.
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
- Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
