KPMG’s Building Societies and Credit Unions Survey 2006 for the period 1 July 2005 – 30 June 2006 has been released.

KPMG concluded that building societies and credit unions are achieving solid growth, however margins are being squeezed.This pressure on margins, combined with continuing regulatory demands which disproportionately increase costs for smaller players, continue to pressure credit unions, particularly the smaller ones, to consolidate. The number of credit unions decreased from 164 to 147 during 2005- 2006 while building societies still numbered 14.

However, further mergers have been announced for 2006/07 and while most consolidation will be friendly, there is potential for hostile takeover activity.