White Paper

Balancing Credit Quality With Profitability

By Beth Stetenfeld

posted 10.05.2017 (lending)

Balancing credit quality with profitability has always been a challenge, but no more so than during a volatile, changing lending environment. Higher lending volume, higher yields, operational efficiency, and lower charge-off rates are several ways credit unions can enhance profitability. But how can credit unions optimize profitability alongside credit quality and serving members?

This white paper examines:

  • Suggestions for maintaining effective yields;
  • Ways to approach risk assessments to adequately prepare the product and the team, and to plan for regulatory impact;
  • Methods for handling excess liquidity;
  • Collaboration between lending and finance leaders: how CLOs and CFOs can work together to balance (for example, loan yields vs. investments); and
  • The roles of automation and technology in balancing credit quality with profitability.

Two goals are shared by credit unions: helping members and making loans. This paper shares suggestions for achieving both goals, by providing credit solutions that align lender profitability with borrower success.

This paper is the second in a two-part series about balancing factors in lending. While this paper focuses on credit quality and profitability, the first paper, published earlier in 2017, focuses on balancing efficiency, growth, and scalability.

This resource is only available to members. Please login to download or explore member benefits and join today

 

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