How much is a legacy cooperative?

A new analysis by the National Cooperative Credit Union of Australia (NCUA) reveals how much a legacy bank is worth.

Credit unions are defined as non-profit entities that operate their own branch of a bank to lend money to borrowers.

In the case of legacy institutions, they do not own the bank but receive a percentage of the funds used to finance their activities.

The analysis was released today by the NCUA.

It found the bank is currently worth more than $7.7 billion.

The NCUA has been analysing the legacy institutions market since the bank’s inception in 1875.

“We’ve looked at the industry over a long period of time,” said NCCU chief executive officer David Haddad.

“It’s been a pretty consistent market that’s grown quite rapidly, and the way it’s developed has been a bit of a surprise to us.”

Credit unions can be an attractive investment to those looking to diversify their portfolio.

The average return on an equity investment in legacy institutions is a rate of 4.3 per cent.

In contrast, a standard index fund such as the S&P 500 or the Australian benchmark S&p 500 offers a 10 per cent return on the same amount of capital.

Credit union funds are generally considered more stable than their S&P 500 equivalents.

A key reason for this is that the money the bank puts into the bank for servicing the customers is paid in advance and not as a deposit, meaning it doesn’t affect the amount of cash the bank lends.

“For legacy institutions there’s a certain amount of liquidity that they have to hold on to,” Mr Haddart said.

“A lot of people are interested in using legacy institutions because they don’t have to pay capital gains tax and can invest more of their savings in a traditional pension fund.”

The analysis shows the average return is 4.4 per cent for legacy banks.

But the average annual return on investment is less than 1 per cent, meaning that in real terms it’s unlikely that legacy banks will be worth as much as they are today.

“If you look at legacy banks, the market value is relatively small,” Mr Fennell said.

“[They] are often relatively well managed, they’re relatively healthy and have a decent return on capital, but they’re not at the top of the pyramid.”

The average annual interest rate for legacy institutions was 4.7 per cent and the average capital cost per loan was $1,800.

But Mr Haddon said that was still far too low for a business that has to provide capital to its customers.

“There’s a lot of things that the banks can do to improve their capital management,” he said.