Bank of England Credit Union Statistics – Q2 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 second 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 Second Quarter of 2023

Credit unions (returns submitted): 240

Total Members (including juniors): 1.49 million

Total Assets: £2.57 billion

Total Shares: £2.22 billion

Total Capital: £310.37 million

Total Loans: £1.53 billion

Quarterly Income: £55.53 million

Quarterly Expenditure: £49.77 million

Quarterly Profit/Loss: +£5.76 million

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

Number of Credit Unions: 240 credit unions submitted returns to the PRA in the second quarter of 2023. A reduction of two 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 1.7% between the first and second quarter of 2023 which equates to 25,300 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 is the largest quarterly increase seen in GB credit union membership since 2017 and 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 2.58% from 6,047 in Q1 to 6,203 in Q2 2023. However, this data does not determine whether the increase in average number of members per credit union is due to the increase in members, or the decrease in credit unions.

This tells us that the average credit union in Britain has about 6,200 members.

Total Value of Loans: The total value of credit union loans in GB has increased by 6.6% between Q1 and Q2 2023. This has risen from £1.44 billion to £1.53 (£94.5 million). 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 (members’ savings) have increased by 2.8% between Q1 and Q2 2023. This increase equates to over £60 million. This is a positive indication of the financial resilience of credit union members during the cost of living crisis. This is the largest amount of shares ever held by British Credit Union.

Total Assets: Total credit union assets grew very slightly between the two quarters and the total assets held by British credit unions has reached a new high of £2.57 billion.

Loans to Assets Ratio: The total loans to assets ratio for GB credit unions has increased to 59.7% in Q2 2023 from 57.7% in Q1 2023. This likely reflects the increase in credit union lending compared to the less significant increase in assets.

Total Income, Expenditure and Profit:

British credit unions’ total surplus in the second quarter of 2023 was £5.8m.

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

Change in Total Income: 13.2%

Change in Total Expenditure: 13.7%

Change in Total Profit: 9.1%

Total Value of Arrears: The total value of net liabilities in arrears has increased by 8.3% from Q1 2023 to Q2 2023. This continues and upwards trend seen across the last five years. There has been a significant spike in the value of arrears across the past three quarters which is likely to be linked to those borrowing during the cost of living crisis who are struggling to repay. The total value of net liabilities in arrears in the British credit union sector was over £120m in Q2 2023.

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 8.01% from 7.90% in Q1 2023. The arrears to loans ratio is returning to the levels seen early in the pandemic and has been steadily increasing over the last four quarters.

Total Capital: The total value of capital held across the sector increased by 6.1% between the Q1 and Q2 2023. This brings the total capital to £310.37m which is the largest amount to date and is in keeping with the overall increase in capital across the last five years.

Capital to Assets Ratio: The capital to assets ratio increased dramatically between Q1 and Q2 2023. The capital to assets ratio is at 12.09% which is the highest percentage recorded. This is the first time the ratio has equalled or surpassed pre-pandemic levels.

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 which increased slightly to 25% in the second quarter of 2023. Liquidity has been very variable across the last five years, and it is likely to continue to be erratic or decrease due to high interest rates offered by banks and building societies which members may have opted to move their savings to.

Summary

Overall, the British Credit Union Sector is in a healthy and resilient position – especially due to the challenges brought by the pandemic and the cost-of-living crisis in recent years. The number of credit union members in Britain continues to grow to record-level heights every quarter since quarter four 2022. This shows that credit unions are growing by size at a good pace and more Brits are discovering the benefit of membership.

Furthermore, the total of member shares in GB increased by over £60m between Q1 and Q2 2023 and is at the highest level recorded. Although borrowing and subsequently arrears have grown, the growth in shares shows that members are continuing to save and build financial resilience. Total capital has also increased to the largest amount recorded.

Liquidity and arrears are two areas that are expected to become challenging areas in future reports but British Credit Unions overall are performing well and serving the needs of the nation.