Building societies and credit unions have produced a solid result again this year, appearing to have successfully ‘sidestepped’ the most dramatic impacts of the global financial crisis.

However, continuing pressure on interest margins and an ever-growing regulatory burden indicate they face another challenging year ahead, according to KPMG’s Building Societies and Credit Unions Survey 2009 released today.

“Building societies’ underlying profit increased by 10.1 percent, which can only be seen as an outstanding result in this environment,” said Martin McGrath, KPMG Financial Services Partner. Credit unions experienced a 17 percent decrease in profit, due primarily to a significant decline in interest margins. “Whilst profits for credit unions were lower than previous years, 96 percent of the organisations surveyed remained profitable in 2009.”

Building societies’ assets grew a subdued 1.8 percent to $27.5 billion in 2009, compared to an increase of 5.9 percent during 2008. Credit unions’ assets increased 7.3 percent to $43.3 billion, below the 9.4 percent they achieved in 2008.

“Building societies and credit unions have stuck to their knitting again this year and produced another good result. This result has been built on a platform of conservative lending and strong credit quality,” said Mr McGrath.