Credit unions and building societies have experienced continued competition from the major banks and regional banks in 2011. Despite this, credit unions increased profit after tax by 18 percent while building societies' profit after tax fell by 5.1 percent. They also recorded strong growth in assets and deposits.
- Greater market awareness of the alternative provided by the mutuals has seen the sector hold its place in the market with building societies (5.5 percent) and credit unions (8.0 percent) showing increases in total assets.
- Consumer preference for saving, rather than borrowing, fuelled deposit growth for building societies (7.9 percent) and credit unions (8.0 percent).
- Capital remains robust with average capital adequacy ratios for building societies (15.4 percent) and credit unions (18.0 percent).
- Impairment losses continue to be remarkably low with total provisions to gross receivables at 0.06 percent for building societies and 0.10 percent for credit unions.
- Some mutuals have announced an intention to change their name to take advantage of the title 'mutual bank’.
- A major challenge for the mutuals is where to find growth in a subdued market.