Credit Union's Office Operating Expense Ratio?

Credit Union's Office Operating Expense Ratio?

Robert Tokle, Neil Tocher Journal of Critical Incidents
January 01, 2016
SKU: BUS-417

Region of the world: North America
Topic: Finance & Accounting
Keywords: credit unions, office operation expense ratio, variable costs, fixed costs
Price: $4.00 | €0.00
0
No votes yet

John, a long-time board member at Midwestern Community Credit Union (MCCU), noted in one of his financial reviews that MCCU’s operating expense ratio was substantially higher than those of peer credit unions. Examination revealed that MCCU had recently taken some key steps to bring this expense ratio down. Other causes of the higher expense ratio were structural, involving fixed costs that could not quickly be changed even if Midwestern had chosen to do so. For example, MCCU had two more branches and seven more automated teller machines than the average for similarly sized credit unions. While operating these branches and ATMs added to the expense ratio, they also gave members better service; and in part, were results of expansion opportunities. Moreover, MCCU remained financially strong with respect to profitability and capital. Still, John wondered, should there be any concern with MCCU’s office operating expense ratio?

RELATED RESOURCES

Business
Business