Efficiency Ratio – is the measure of credit union’s productivity. The lower the efficiency ratio, the better. A high or rising efficiency ratio means that the credit union is losing a larger share of its income to overhead expenses. A low-efficiency ratio means that operating expenses are a smaller percentage of income. It can be interpreted as how much does it cost the credit union to create $1 of revenue.

The efficiency ratio divides a credit union’s operating expenses by interest income less interest expenses plus non-interest income.

Here is the list of the 50 most efficient credit union (size greater than $500M in asset) as per Call 5300 report for Dec-2019.

And here is the list of 50 least efficient credit unions (size greater than $500M in asset) as per Call 5300 report for Dec-2019.

It would be interesting to hear your views on why some of these credit unions are so efficient? Is it because they are doing more digitally than traditional ways like branches? What is the maturity level of process automation in these credit unions?

For the credit unions, which are on the other side of the spectrum, what are they doing to bring down their efficiency ratio within reasonable limits? Are there specific areas that they are looking to invest in?