Three vital lending ratios for credit union executives to know

2020 has been an unprecedented year for businesses and financial institutions around the globe. Nearly everyone’s bottom line has been affected by the pandemic, and credit unions, like all businesses, have had to be agile and adopt new practices in order to survive.

One area that has always been crucial for the profitability of credit unions (and now even more so) is lending. Credit unions that sustain profitable and healthy lending practices have a leg up on the competition and will be around for a while, and those that don’t, will run the risk of dying a slow death and ultimately weighing out their merger options.

Fortunately, there have been many new technological developments that can help CU’s offer their members easy access to competitive loans. However, before credit unions decide which technologies and tools to use, it’s a good idea for credit union executives to take a look at a few specific lending ratios in order to determine if their current lending tactics are successful or not.

Lending ratios for Credit Unions

Analyzing and understanding certain lending ratios is vital for credit unions to know where they are succeeding and, perhaps more importantly, where they are failing when it comes to lending. Here are three important metrics to determine if your credit union’s lending strategies are working:

 

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