Key ratios are relatively unimportant in isolation. Board members should monitor trends (e.g., ratio this month compared to same month last year) & compare your ratios to peer averages or another type of benchmark (i.e., ratio compared to other credit unions with similar characteristics).
The following 8 key ratios will give you a very good picture of your credit union’s performance.
Net Economic Value
Capital/Assets Ratio
Loan to Share Ratio
Net Expense to Assets Ratio
Delinquency Ratio
Loan Charge-off Ratio
Checking Accounts to Members Ratio
This blog entry you have just read was written by Edward Lis who is a former senior executive of three different credit unions. If you enjoyed this article I encourage you to learn more about Edward by visiting www.edwardlis.com or by calling 518-420-2108.
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