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Noninterest Income Continues to Grow in Importance

As member relationships deepen, revenue opportunities expand; here's a look at the importance of noninterest income.

By Ian Melhorn | Updated on February 23, 2018

The spread between the industry’s net interest margin and the operating expense ratio has narrowed from 36 basis points in the fourth quarter of 2013 to 10 basis points as of year-end 2017, according to our analysis of credit union Call Reports.

This is just one measurement that shows why noninterest income has become so important to credit unions. Cutting costs is one way to improve that ratio, of course, but adding products and services that generate revenue and value has proven to be more attractive and profitable in many playbooks.

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