CCUA Largest 100 Credit Unions | General financial discussion | Discussion forum

Yatti420, Thanks for the great post!

hwyc said
I visited the Facts and Figures today.
From the Quarterly National System Results, all numbers are growing, in general. However, I noticed since 2Q 2018 there is more loans than deposits.
Does it mean the CUs will have to keep rate up to attract more deposits ? What is your take ?

$ Billions

	Assets	Loans	Deposits
3QTR16	$200.880	167.819	172.434
4QTR16	$202.503	169.683	173.687
1QTR17	$205.307	172.080	176.048
2QTR17	$209.560	175.864	179.049
3QTR17	$213.349	180.358	181.714
4QTR17	$216.253	183.932	184.113
1QTR18	$220.007	186.583	186.758
2QTR18	$225.240	191.071	190.697
3QTR18	$229.650	194.968	193.941
4QTR18	$232.561	197.997	196.763

  

That's common for CU loans to be slightly more, or less, than the deposits. Also consider that some of those loans are securitized off balance sheet. Likewise, CUs do use other forms of funding besides deposits. So it's not easy to say that that's the reason their deposit rates will be higher than banks. It usually has more to do with the fact that it's (a) more difficult and (b) more expensive for CUs to access capital markets (i.e., the bond market) than it is for banks. CU debt is, generally, rated lower than the major Canadian banks and thus their cost of funding higher than it is for banks. Also, they have to go, usually, through their credit union intermediaries for access to the bond markets. So, that's why they'll always go with the more traditional deposit route.

In short, I expect the deposit/loan spread to contract a bit, particularly as the CUs and banks cut loan rates (and resume decreasing the deposit rates at modestly higher rates of decrease than the rates of decrease on loan rates), but still expect the CU deposit rates to be higher than the major banks, on average. Scotiabank, I expect, will continue to offer the highest GIC rates of the "Big 5" due to their need for capital having gone on an absolute acquisition binge last year and their Tangerine deposits finally starting to drop noticeably (~$5 billion) last year. TDCT will likely continue to offer the lowest deposit rates, followed by RBC, at or around 1% on a 3-5-year GIC.

Cheers,
Doug

that's an interesting undertaking, NorthernRaven, but it seems to be far from comprehensive, unless you want to pay him $600. I'm sure it's a lot of work, but who would want to pay that much for it, I wonder?

CCUA *Largest 100 CUs* 2019 Q2 report is now available on their website, under Facts & Figures.

... ICYMI 2020 Q2 reports are out. ... some pastime during this COVID-19 altered Thanksgivng ... stay safe

Loonie said
It's interesting how the largest CUs are the ones that generally offer the worst deposit rates and/or don't offer decent Specials. .....spend a lot of money creating banks .....Meridian ...opening more physical branches.....I have more money in the small ones that are not in the top 100, where I have gotten better deals.  

Consistent with my experience and observations, Loonie!

The larger institutions seem to adopt the strategies of the Big Six, where visibility tends to instill customer confidence and encourages laziness to explore better options.

Most consumers have never heard of some of the smaller players in banking, content with the mistaken assumption of having to accept what the big FI's provide.

High visibility (numerous branches) and name recognition (advertising and sponsorship) are two vital marketing strategies, that might explain the actions of Meridian and the like.

In order for the smaller institutions to attract funds (except in today's climate) is to offer better than average incentives.

Stephen