Credit Union Investments 2016

ABCUL has recently undertaken a study of ABCUL member credit union investments and we now share some of our findings with our membership. This work follows and informs our continuous engagement with banks, building societies and other investment providers to further open up investment opportunities for our members.

Results

All of the information below has been taken from regulatory annual returns submitted in 2017 for the year 2016. This is the first time that such detailed investment information has been available for the sector due to the changes to the last regulatory return.

Sample information

• 180 credit unions
• 63 banks, building societies and other counterparties
• £330.3 million invested
• 977 individual investment and deposit accounts
• 347 years of term investments

Assets share (Top 15 providers)

Credit unions using each provider (Top 10)

Number of credit union accounts (Top 10)

Average balance per credit union (Top 10)

Top 10 providers by average term of deposit (months)

Overall liquidity of credit union investments

Conclusion

Due to the changes to the credit union annual return in 2016, these figures represent the first data on credit union investments in such detail and yields many interesting results. For example, over 50% of all credit union assets are held by the largest 4 providers in the market, whilst 63 banks hold some amount of credit union funds.

Credit unions’ strong ties with The Co-operative Bank in particular are evidenced by the bank holding over a quarter of investments in accounts for over 60% of ABCUL credit unions. However, new entrants to the credit union market Aldermore Bank have gained market share rapidly due to competitive interest rates showing that the sector can be quick to respond to market forces. Another example is Unity Trust Bank which holds the second largest number of credit union accounts however hold relatively low amounts of assets, possibly due to their discontinuation of the credit union development account and poor rates of return on treasury accounts.

Although credit unions have been responsive to attaining better rates of interest, the sector was still highly liquid during the time credit unions submitted their returns last year. As credit union submit returns for further years it will become possible to measure evolving trends such as in the further diversification of credit union investments.