Mortgage, personal loan growth drives CUA profit

by Phil McCarroll16 Sep 2016
Growth in its home and personal loan books was a key driver behind a profit increase for mutual lender CUA over the 2106 financial year.

CUA yesterday announced a consolidated net profit after tax (NPAT) of $51.66m over FY2016, a 5.8% increase on the previous year’s result.

Over the year, CUA recorded an 8.2% increase in its home loan balance, with only 6.5% of CUA’s home loan portfolio having a loan to valuation ratio (LVR) above 90%.

The volume of personal loans issued during FY16 increased 14.7% on the previous year to $186.1m.

Net interest income was up 10.3% over the year to $232.77m, which reflected higher interest revenue from record lending in the previous year.

Rob Goudswaard, CUA chief executive officer, said the NPAT growth capped what had been a successful year for the mutual lender.

“We’ve also invested in an improved member experience this year, launching our first on-balance sheet CUA credit card, progressing the first phase of our streamlined loans application system and upgrades to mobile and online banking,” Goudswaard said.

“We’re also making it easier for new members joining CUA to open a transaction account online in a few simple steps,” he said.

Goudswaard said focussing on CUA’s digital capabilities would be a key focus for CUA over the year ahead.

“We’re now exceeding 3 million logins and more than 1.5 million transactions using our digital channels each month – double the number of ATM transactions in a month.

CUA now has more than 170,000 members using online or mobile banking and our mobile banking app has 15,500 more users than a year ago.”

While Goudswaard believes the year ahead will be a positive one CUA, he also said there are some possible concerns on the horizon.

“We expect that economic conditions will remain tough and we will continue to face headwinds on the economic and regulatory front,” he said.

“The limited options available to mutuals to raise additional capital will continue to provide a challenge, as will the competitive environment and margin pressure in this low interest rate environment.

“Against this backdrop, CUA must continue to attract members through establishing a deeper connection to communities.”