Bank of England Credit Union Statistics – Q1 2023

The Bank of England collates the data from credit unions’ quarterly returns to produce a statistical release on the UK credit union sector for each quarter. Due to the time taken to submit and process the returns data, it takes around 6 months for the data to be published.

Based on the data collected by the Bank of England, this briefing presents a range of statistics for the first quarter of 2023 for credit unions in Great Britain (which excludes Northern Ireland). Provided below are the headline statistics for the British credit union sector, followed by charts showing the trends for the sector over the last 5 years.

Please note that this data represents an aggregate of all credit unions that submitted their regulatory returns for the financial quarter, and that there will be significant variation between the financial trends seen by individual credit unions that are not reflected in this data. It should also be noted that the latest quarterly data available is often slightly inaccurate, due to a small number of credit unions submitting their regulatory returns late.

Key Statistics for the British Credit Union Sector for the First Quarter of 2023

Credit unions (returns submitted): 242

Total Members (including juniors): 1.46 million

Total Assets: £2.50 billion

Total Shares: £2.15 billion

Total Capital: £292.47 million

Total Loans: £1.44 billion

Quarterly Income: £48.92 million

Quarterly Expenditure: £43.74 million

Quarterly Profit/Loss: +£5.18 million

Trends in the British Credit Union Sector Over the Last Five Years

Number of Credit Unions: 242 credit unions submitted returns to the PRA in the first quarter of 2023. A reduction of four since the previous quarter. This slight reduction is in keeping with the steady decrease in number of credit unions seen in Great Britain.

A decrease in the number of submitted returns can be due to three separate reasons: credit unions merging, credit unions winding down/up, or credit unions submitting their returns late. Due to this, the number of credit unions for this quarter may be higher due to late submissions.

Total Number of Credit Union members: The total number of credit union members in GB increased by 1.4% between the fourth quarter of 2022 and the first quarter of 2023 which equates to 19,500 new members. A slight decrease in junior members was observed across the quarter, but this was accommodated for by a large increase in adult members.

This quarterly increase in members rose at the same pace seen in the previous quarter and affirms that this is the largest amount of credit union members in GB ever at almost 1.5 million members.

Average Number of Members per Credit Union: The average number of members by credit union has also increased by 3.03% from 5,869 in Q4 2022 to 6,047 in Q1 2023. However, from this data it is not clear what percentage of growth in average credit union membership size is due to merger of credit unions, and how much is due to organic member acquisition.

Total Value of Loans: The total value of credit union loans in GB has increased by 6.1% between Q4 2022 and Q1 2023. This has risen from £1.36 billion in Q4 2022 to £1.44 billion in Q1 2023. This increase is likely due to a broad increase in demand for credit from individuals driven by the cost of living crisis.

Total Shares: Total credit union shares for GB have seen a slight increase of 1.5% between Q4 2022 and Q1 2023. This is a positive indication of the financial resilience of credit union members during the cost of living crisis as the previous quarter showed a slight decrease in shares.

Total Assets: Total credit union assets grew by 1.53% between the two quarters and the total assets held by British credit unions has reached a new high of £2.50 billion.

Loans to Assets Ratio: The total loans to assets ratio for GB credit unions has increased to 57.6% in Q1 2023 from 55.1% in Q4 2022. This likely reflects the increase in credit union lending.

Total Income, Expenditure and Profit:

British credit unions’ total surplus in the first quarter of 2023 was £5.18m.

The following changes were seen across the sector in the first quarter of 2023 compared to the previous quarter:

Change in Total Income: 0.04%

Change in Total Expenditure: -4.4%

Change in Total Profit: 63.7%

Total Value of Arrears: The total value of net liabilities in arrears from the returns submitted in the first quarter of 2023 has increased by 12.25% since the previous quarter. The total value of arrears has risen from £101.3m in Q4 2022 to £113.7m in Q1 2023.

This increase is likely due to the higher demand for credit from the cost of living crisis and increasing difficulty when assessing the affordability of members. Furthermore, quarter one includes the months of January, February and March (2023) where the cold weather and enormous cost of heating a home likely resulted in some accessing credit they struggled to repay.

Arrears to Loans Ratio: The arrears to loans ratio (the percentage of the total loans value in arrears) across the sector has increased across the last quarter to 7.90% from 7.48%.  Although the ratio has is marginally lower than seen during covid, there has been a steady increase since Q3 2022.

Total Capital: The total value of capital held across the sector increased by 2.85% between the first quarter of 2023 and the fourth quarter of 2022. This brings the total capital to £292.47m and is in keeping with the overall increase in capital across the last five years.

Capital to Assets Ratio: A slight increase in the capital to assets ratio was seen between the fourth quarter of 2022 and the first quarter of 2023, going from 11.57% to 11.72%. The growth in capital compared to assets in recent quarters is a promising indicator for the financial wellbeing of the credit union sector, and indicates recovery in the financial resilience of credit unions following the difficult economic circumstances faced during the Covid-19 pandemic.

Liquidity: The percentage of total credit union assets that were liquid for the British sector was 24% in the first quarter of 2023 a small decrease from 25% in the fourth quarter of 2022. This may indicate a slight increase in credit union investments, but this small change is difficult to know why entirely.

Summary: Overall, 2022 saw some challenges for the credit union sector and the economy at large. During 2022 there has been a number of credit union mergers and sadly some credit unions who entered into administration.

The trend of increasing numbers of credit union members and loans to members has continued into 2023. This has also had a positive impact on the credit union’s profitability and increase in total value of capital held across the sector. However, the positive increase in loans is also followed by an increase in the total value of arrears.

With Many households struggling after the post-holiday period, rising food costs and energy prices, and increased mortgage rates the impact of the cost-of-living crisis and stretched household budgets saw a 12.25% increase in arrears in Q1 of 2023. A trend that we anticipate will continue through 2023 with the broad decline of households’ financial wellbeing.