Bank of England Credit Union Statistics – Quarter Three 2023

The Bank of England gathers information from credit unions’ quarterly reports to create a statistical report about the credit union sector in the UK. However, the process of submitting and processing the returns data takes around six months, which causes a delay in publishing the data.

This briefing is based on the data collected by the Bank of England and presents statistics for the third quarter of 2023 for credit unions in Great Britain, except Northern Ireland. The following are the headline statistics for the British credit union sector and graphs that display the sector’s trends over the past five years.

Please remember that this data represents all credit unions that submitted their regulatory returns for the financial quarter. There may be significant differences in financial trends experienced by individual credit unions that are not represented in this data. Additionally, due to some credit unions submitting their annual returns late, the latest quarterly data may be slightly inaccurate.

Key Statistics for the British Credit Union Sector for the Third Quarter (Q3) of 2023:

Credit unions (returns submitted): 240

Total Members (including juniors): 1,505,076

Total Assets: £2.64 billion

Total Shares: £2.27 billion

Total Capital: £322 million

Total Loans: £1.63 billion

Quarterly Income: £63.3 million

Quarterly Expenditure: £61.6million

Quarterly Profit/Loss: +£1.8 million

Trends in the British Credit Union Sector over the Last Five Years:

In the third quarter of 2023, 240 credit unions submitted their returns to the PRA. This is the same number as the previous quarter. However, there is a general trend of a slight decline in the number of credit unions in Great Britain, as indicated by the trend line below.

Although this quarter showed no change in the number of credit unions, the reason for the declining trend could be one of three factors: 1) the continued merging of credit unions, 2) credit unions winding down or up, or 3) credit unions submitting their returns late. It’s worth noting that the data may not accurately capture all credit unions due to late submissions of returns to PRA. Any later quarterly submissions are then added and corrected by the next quarter.

Total Number of Credit Union Members:

Great Britain’s total members increased to its highest point at 1,505,076 members (including juvenile depositors). This is an increase of 1.1% from the previous quarter and a 5.7% increase from the prior year. For the first time, the membership has overtaken 1.5 million members.

Average Number of Members per Credit Union:

As the graph demonstrates, there has been a steady increase in the average number of members per Credit Union. This was calculated by dividing the number of members by the number of credit unions. It is important to note that credit unions do vary a lot in terms of membership size. However, this is more to illustrate the growth of membership as a sector. This is the equivalent of 340 new members per credit union on average. This is an increase of 1.10% from the previous quarter.
The average membership per credit union in GB is 6,270.

Total Value of Loans:

The total value of credit union loans in GB has increased by 6.53% from Q2 to Q3 2023. There has been an increase from £1.53 billion to £1.63 billion, around £100m. The continued demand for credit is mostly accredited to the pressure of the cost-of-living crisis. Therefore, more people require loans, and people who have already taken loans require credit for longer.

Total Shares:

Total credit union shares also demonstrate that the level and value of membership savings grew 2.4% from the previous quarter, with a 14% growth from the previous year. The total share value in Q3 is £2.3 billion, surpassing the last quarter as the largest shares ever held by British Credit Union. This continued tend provides an indication of the financial resilience of many credit union members during the continued cost of living crisis.

Total Assets:

Total Assets had a 2.8% quarterly growth, a 7.4% increase from the previous year. In the final quarter, the assets equalled £2.64billion, the largest amount ever held by British Credit Unions—a rise of £72 million.

Loan to Asset Ratio:

The total loans to asset ratio for GB Credit Unions has increased to 61.9% in Q3 2023 from 59.7% in Q2 2023. This is likely due to the rise in credit union lending compared to the less significant increase in assets.

Total Income, Expenditure, and Profit:

The total surplus of British credit unions in Q3 2023 was £1.87 million. When comparing Q3 to the previous quarter, the following changes were observed across the sector:

Changes in Total Income: 14.2%

Changes in Total Expenditure: 23.8%

However, due to a decrease in profits in Q3 for English Credit Unions, there was a 68% decrease in profit for GB Credit Unions. While this is a notable decrease, it can be attributed to prevailing economic conditions, with a small increase in loan arrears.

Total Value of Arrears:

The total value of net liabilities in arrears increased by 4.3% in Q2-3 2023, but this is a smaller increase compared to Q1 & Q2, which was 8.3%. In Q3 2023, the total value of net liabilities in arrears across GB stood at £128m. The graph shows that there has been a rise in arrears over the past five years. This trend is likely because of increased borrowing to tackle the ongoing cost of living crisis. More people are financially vulnerable and struggling to repay their debts.

Arrears to Loans Ratio:

The arrears-to-loan ratio demonstrates in terms of the loans given out how much is in arrears (repayment has been missed on one or more occasions). The graph shows a gradual increase since the pandemic; however, in the previous few quarters, there appears to be a decline in the ratio. This is positive and indicative that more loans are being repaid on time, collections processes are becoming more effective, or a return to financial resilience.

Total Capital:

Total capital has peaked at £322 million in the third quarter of 2023. This is a 4% increase from £310.37m the previous quarter, adding around £12m in capital.

Capital to Asset Ratio:

There was an increase in the capital-to-asset ratio to 12.22% from 12.09% in Q2-3 2023. This has now surpassed the previous quarter as the highest percentage recorded.

The recent increase in capital compared to assets is a positive sign of the financial health of credit unions. This shows that credit unions are recovering from the economic impact of the Covid-19 pandemic and growing at a steady pace.

Liquidity:

The percentage of total credit union assets for the British sector for Q3 was 23.3%. The graph shows that the liquidity ratio has been variable for the past five years. This is due to exogenous changes to interest rates in other financial institutions such as Banks or building societies. Therefore, members may have opted to move their savings.

Summary:

The data reveals that the total number of credit unions remains the same as the previous quarter, but there has been a slight decline in the number of credit unions over the past five years. However, the total number of members has increased to its highest point, surpassing 1.5 million members. The total assets, shares, and loans have also increased, indicating that credit unions are more financially resilient. Additionally, the total surplus of British credit unions in Q3 2023 was £1.87 million.