Credit Union Quarterly Statistics – Q4 2021
Friday 5 January 2024
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 fourth quarter of 2021 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 in the fourth quarter of 2021
Credit unions (returns submitted): 256
Total Members (including juniors): 1,412,398
Total Assets: £2.28 billion
Total Shares: £1.97 billion
Total Capital: £258 million
Total Loans: £1.13 billion
Quarterly Income: £38.7 million
Quarterly Expenditure: £33.6 million
Quarterly Profit/Loss: +£5.08 million
Trends in the British Credit Union Sector over the Last Five Years
Number of Credit Unions: For the fourth quarter of 2021, the amount of credit unions in Great Britain that submitted a quarterly return was 256, four credit unions less than the previous quarter. The decrease between quarters is in keeping with the ongoing decline in the number of credit unions in Great Britain.
The fall in the number of submitted returns can be due to three separate reasons: credit unions merging, credit unions winding down, or credit unions submitting their returns late. It must be noted that the total number of credit unions may not be reflected by this figure, as the actual number of credit unions may be higher due to late submission of returns. Once any late quarterly returns are received, the data for previous quarters will be corrected by the Bank of England in future statistical releases.
Total Number of Credit Unions Members: The total membership of British credit unions increased by 1.0% to 1,412,398 in the fourth quarter of 2021 from 1,398,785 in the previous quarter. This figure is inclusive of both adult members and junior depositors.
Despite the quarterly increase, the total number of credit union members in Britain has fluctuated over the past couple years, with an overall decrease seen the overall level of membership. Comparing the fourth quarter of 2021 to fourth quarter of 2020, a year previous, there was a decrease of 1.0% in the total level of credit union membership. The decrease in overall credit union membership could be due to a number of factors, including credit unions winding down.
Average Number of Credit Unions Members: Despite the decrease in total member numbers, the average number of credit union members increased to 5517 in the fourth quarter of 2021 from 5380 in the third quarter, representing a quarterly rise of 2.55%. There is a clear trend of growth in the average credit union membership size. From the BoE data, it is not clear how much of the growth in average credit union membership size is due to mergers and how much is due to organic member acquisition.
Total Value of Loans: The total value of credit union loans increased by 6.71% to a total of £1.063 billion between the third quarter and the fourth quarter of 2021. This is the greatest quarterly increase in credit union lending seen since the second quarter of 2017, in almost five years. The large quarterly increase also sees the total loans value rise well above pre-pandemic levels.
Total Shares: The total of credit unions shares in credit unions grew moderately in the fourth quarter of 2021, with the total increasing to £1.966 billion, up 0.9% compared to the previous quarter. This figure includes both non-deferred member shares and deferred shares in the credit union.
Total Assets: Credit unions’ total assets continued to grow in this period, with the value of total assets increasingly moderately between the third quarter and fourth quarter of 2021 by 1.0% (£23.6m) to £2.28 billion.
Loans to Assets Ratio: The total loans to assets ratio for credit unions increased to 49.7% in the fourth quarter of 2021, from 47.1% in the third quarter. The large quarterly increase in the loans to assets ration is due to the large increase in total loans for this quarter by far outweighing the increase in total assets for the quarter. Nevertheless, the loans to assets ratio for the British credit union sector remains far below pre-pandemic levels.
Total Income, Expenditure and Profit: British credit union’s total surplus in the fourth quarter of 2021 was £5.08m.
The following changes were seen across the sector in the fourth quarter of 2021 compared to the previous quarter.
Change in Total Income: 3.8%
Change in Total Expenditure: 4.9%
Change in Total Profit: -3.2%
Arrears to Loans Ratio: The arrears to loans ratio (the percentage of the total loans value in arrears) across the sector dropped to 6.84% in the fourth quarter of 2021, from 7.02% in the previous quarter. This quarters arrears to loans ratio is by far the lowest level reported during the pandemic so far. However, the percentage of loan value in arrears is still higher than pre-pandemic levels.
Total Capital: The total value of capital across the sector increased to £258m by £8.81m (1.9%) between the third and fourth quarters of 2021, in keeping with the continuous growth in total capital reserves across the sector seen in recent years.
Capital to Assets Ratio: The capital to assets ratio increased to 11.31% in the fourth quarter of 2021 from 11.21% in the third quarter. This quarterly increase is encouraging, given that British credit unions have seen an overall decline in their total capital reserves compared to their assets in the three years prior to this quarter.
Liquidity: The percentage of total credit union assets that were liquid for the British sector decreased to 27.6% in the fourth quarter of 2021, compared to 30.3% in the third quarter.
Summary
The fourth quarter of 2021 showed encouraging trends of recovery from the financial impact of the Covid-19 pandemic. Compared to the previous quarter, the BoE data for the fourth quarter of 2021 showed an improvement in the overall loans-to-assets, arrears-to-loans and capital-to-assets ratios for the credit unions that submitted their returns.
Looking forward, the subsequent BoE quarterly statistics releases will provide an indication of whether the British credit union sector can continue to emerge from the financial difficulties it has faced during the pandemic in the short term, and how it will be impacted by the cost of living crisis and the currently uncertain economic period.
If you have any questions, comments or suggestions based on this briefing please contact policy@abcul.org.