Benchmarking Survey 2015 - Russell Brennan Keane
Benchmarking Survey 2015
Cathal Melia, Audit Partner, Credit Union Division R Russell ll Brennan B Keane K
Benchmarking 2015 5th Annual Benchmarking survey Trends from September 2014 to March 2015 The Loan Book Financials Challenges Merger Activity
The Survey Context 60 50 40
2015 2014 2015 €48.4m €42.7m €39.3m 2014 2015 2014 €39.3m €33.5m €33.5m
30 20 10 0
2015 2014 1.076m 1.168m
2015 2014 €14.5m €14.5m
The Loan Book IIs your CU subject to Lending Restrictions from central CU bj L di R i i f l Bank?
No 41.03%
Yes
Yes 58.97%
No
The Loan Book Have your Lending Restrictions been lifted or eased in Have your Lending Restrictions been lifted or eased in the last 6 months?
Yes 10.26% Yes
No 89.74%
No
Increase / Decrease in Loan Book? 70%
63%
60% 50%
53.84% 46.15%
40%
36% Current year
30%
Prior year
20% 10% 0% % who saw increase
% who saw decrease
The Loan Book - What is the Average Change in the value of New Loans issued yyear to date compared p to Prior Year? 0.05 0 045 0.045 0.04 0.035 0.03 0.025 0.02 0.015 0.01 0 005 0.005 0
4.60%
2.30%
2015 2014
Overall Average increase
Financials- Balance Sheet Financials Gross Loan Book % Assets Gross Loan Book % Assets 0.4 0 35 0.35 0.3 0.25 0.2 0.15 01 0.1 0.05 0
35%
38%
30%
2015
2014
2013
Financials P&L FinancialsO Operating Cost % of Income i C % fI 40% 35%
35%
30%
30%
25%
2015
20% 15%
28%
19%
21% 20%
2014 2013
10% 5% 0% Wages
Other Cost Other Cost
Financials Do you plan to give a Wage Increase in the next 12 Do you plan to give a Wage Increase in the next 12 months?
No 30.56% Yes 69.44%
Yes No
Financials - Performance Did Your CU pay a Dividend for p y 2014?
Did Your CU pay a Dividend p y for 2013?
No 23%
No 16% Yes 84%
Yes 77%
Financials - Performance % Rate of Dividend Paid 0.01 0.008 0.006 0.004
0.93% 0 93% 0.69% 0 57% 0.57%
0.002 0 2015
2014
2013
Challenge What is your biggest challenge in implementing your Credit y gg g p gy Unions Strategy?
Other 19% Growing Loan Book 34%
Growing Loan Book Central Bank P People Resources l R
People Resources 38%
Other Central Bank C t lB k 9%
The Challenges? 180 160 140 120 100 80 60 40 20 0
2015 2014
Challenge Have you Restructured your Team in the last 12 months?
No 33.33%
Yes
Yes 66.67%
N No
Challenge Do you have the Right Team in place to meet the D h th Ri ht T i l t t th challenges in the next 3 years?
No 33.33% Yes
Yes 66.67%
No
Mergers Does your Strategic Plan Indicate that your CU is Viable as a Stand Alone CU for the next 5 year? No 12.20%
Yes 87.80% 87 80%
Mergers Has your CU been involved in Merger Discussions with other CU’s
No 32.50% Yes 67.50%
No Yes
Mergers - What is the biggest lesson learned throughout the process? • • • • • • • • •
It all takes a lot longer than what you expect Lots of work to do The benefit to our members Difficulty in getting consensus on the way forward Credit Unions are territorial and some battles are hard to win How different Credit Unions are Be open Two previous failed merger attempts Th t the That th board b d were surprised i d att h how we aren’t ’t as viable i bl as they taught we were • We withdrew from talks as it was takeover not merger • Massive potential for loan and service growth in taking over smaller Credit Unions
Conclusions Income trend is still downward Costs increases still ramping up (Wage Pressure) Keyy challenge g is the same for all – loan Book Growth and finding resources to do everything which needs to be done Mergers M still till att early l stage t and d require i energy and d resources
THANK YOU
Cathal Melia, Audit Partner, Credit Union Division R Russell ll Brennan B Keane K
Benchmarking 2015 5th Annual Benchmarking survey Trends from September 2014 to March 2015 The Loan Book Financials Challenges Merger Activity
The Survey Context 60 50 40
2015 2014 2015 €48.4m €42.7m €39.3m 2014 2015 2014 €39.3m €33.5m €33.5m
30 20 10 0
2015 2014 1.076m 1.168m
2015 2014 €14.5m €14.5m
The Loan Book IIs your CU subject to Lending Restrictions from central CU bj L di R i i f l Bank?
No 41.03%
Yes
Yes 58.97%
No
The Loan Book Have your Lending Restrictions been lifted or eased in Have your Lending Restrictions been lifted or eased in the last 6 months?
Yes 10.26% Yes
No 89.74%
No
Increase / Decrease in Loan Book? 70%
63%
60% 50%
53.84% 46.15%
40%
36% Current year
30%
Prior year
20% 10% 0% % who saw increase
% who saw decrease
The Loan Book - What is the Average Change in the value of New Loans issued yyear to date compared p to Prior Year? 0.05 0 045 0.045 0.04 0.035 0.03 0.025 0.02 0.015 0.01 0 005 0.005 0
4.60%
2.30%
2015 2014
Overall Average increase
Financials- Balance Sheet Financials Gross Loan Book % Assets Gross Loan Book % Assets 0.4 0 35 0.35 0.3 0.25 0.2 0.15 01 0.1 0.05 0
35%
38%
30%
2015
2014
2013
Financials P&L FinancialsO Operating Cost % of Income i C % fI 40% 35%
35%
30%
30%
25%
2015
20% 15%
28%
19%
21% 20%
2014 2013
10% 5% 0% Wages
Other Cost Other Cost
Financials Do you plan to give a Wage Increase in the next 12 Do you plan to give a Wage Increase in the next 12 months?
No 30.56% Yes 69.44%
Yes No
Financials - Performance Did Your CU pay a Dividend for p y 2014?
Did Your CU pay a Dividend p y for 2013?
No 23%
No 16% Yes 84%
Yes 77%
Financials - Performance % Rate of Dividend Paid 0.01 0.008 0.006 0.004
0.93% 0 93% 0.69% 0 57% 0.57%
0.002 0 2015
2014
2013
Challenge What is your biggest challenge in implementing your Credit y gg g p gy Unions Strategy?
Other 19% Growing Loan Book 34%
Growing Loan Book Central Bank P People Resources l R
People Resources 38%
Other Central Bank C t lB k 9%
The Challenges? 180 160 140 120 100 80 60 40 20 0
2015 2014
Challenge Have you Restructured your Team in the last 12 months?
No 33.33%
Yes
Yes 66.67%
N No
Challenge Do you have the Right Team in place to meet the D h th Ri ht T i l t t th challenges in the next 3 years?
No 33.33% Yes
Yes 66.67%
No
Mergers Does your Strategic Plan Indicate that your CU is Viable as a Stand Alone CU for the next 5 year? No 12.20%
Yes 87.80% 87 80%
Mergers Has your CU been involved in Merger Discussions with other CU’s
No 32.50% Yes 67.50%
No Yes
Mergers - What is the biggest lesson learned throughout the process? • • • • • • • • •
It all takes a lot longer than what you expect Lots of work to do The benefit to our members Difficulty in getting consensus on the way forward Credit Unions are territorial and some battles are hard to win How different Credit Unions are Be open Two previous failed merger attempts Th t the That th board b d were surprised i d att h how we aren’t ’t as viable i bl as they taught we were • We withdrew from talks as it was takeover not merger • Massive potential for loan and service growth in taking over smaller Credit Unions
Conclusions Income trend is still downward Costs increases still ramping up (Wage Pressure) Keyy challenge g is the same for all – loan Book Growth and finding resources to do everything which needs to be done Mergers M still till att early l stage t and d require i energy and d resources
THANK YOU
