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Like the rest of Australia's Finance subdivision, the Credit Unions industry has been hurt by the financial crisis and a slowing economy. However, their mutual status, prudent lending and heavy reliance on deposits for funding have largely shielded credit unions. For these reasons, industry research firm IBISWorld has updated its report on the Credit Unions industry in Australia.
Melbourne, Australia (PRWEB) December 01, 2012
Like the rest of Australia's Finance subdivision, the Credit Unions industry has been hurt by the financial crisis and a slowing economy. However, their mutual status, prudent lending and heavy reliance on deposits for funding have largely shielded credit unions. Over the five years through 2012-13, industry revenue is expected to decline at a compound annual rate of 3.1% to $3.83 billion. According to IBISWorld Industry analyst Ee Jen Lee, “This decline is partly attributable to the exit of several industry participants and the expiry of the First Home Owner Boost, which dampened residential home loan growth”. In 2012-13, revenue is forecast to decline by 7.5% as more credit unions convert to bank status, thus exiting the industry.
As the economy stabilises, IBISWorld forecasts industry revenue to grow over the next five years. “Growth is expected as residential lending stagnates due to mounting housing affordability pressures”, says Lee. As the battle against the banks persists, the trend to merge and consolidate operations will continue. However, as long as the industry continues to extend its brand presence and remains focused on maintaining customer satisfaction and loyalty, there is no reason to expect that it will not grow in its existing markets and even attract customers away from the banks.
The level of market share concentration in the Credit Unions industry is low. However, the industry has been undergoing consolidation for many years, and there is no sign of this process abating. In 2009, the second- and third-ranked players - Australian Central Credit Union and Savings & Loans Credit Union - merged, which greatly increased their market share. Industry concentration began from a low base due in part to the pre-Australian Financial Institutions Commission regulatory requirements in different states (which effectively restricted interstate expansion), and the restraint that credit unions' common bond of association traditionally placed on their growth and market share. These restraints have since loosened and industry concentration received a boost with the merger of Credit Union Australia (CUA) and Australian National Credit Union Limited in 2006, creating a major player. Industry concentration will continue to increase, driven by the need to achieve cost savings to remain competitive in a dynamic market and the level of competition from other financial institutions.
For more information, visit IBISWorld’s Credit Unions report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry consists of financial institutions known as credit unions or cooperatives. Credit unions are owned by their members and provide banking services, mainly deposit taking and lending, to these same members.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.
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