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Credit Union Strategic Growth and Budgeting

"Net income ROA is a worthless measure,” writes researcher Mike Higgins in this report. And that's not the only sacred cow that comes under fire. Interest rates are just noise, he adds. And if that's not enough, try this: “The number most important to your ongoing existence is not even reported on your income statement.” From the first page, you'll realize this is not just a warmed-over analysis of credit union strategy or budgeting. Higgins is on to something.

  • Mike Higgins Managing Partner at Mike Higgins & Associates

Executive Summary 

Higgins attacks the outdated way credit union boards think about ROA (return on assets) targets and the budgeting hoops that managers (often willingly) jump through to reach them. Growth is good, but the type of asset growth is what matters most. Credit unions must focus on responsible revenue growth to compensate for the inevitable creep of operating expenses. Staying ahead of that gap is the only way a credit union can hope to be profitable and sustainable and to flourish in the long run.

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