Credit Union Australia (CUA) has reported a drop of 13.7% in net profit after tax to $49.6 million in the year to June 2014, despite new loans growing by 16.7% and increasing its loan portfolio by 4.9%.
The customer-owned lender settled $2.165 billion of new loans during the year, while its loan portfolio reached $9 billion.
CUA chief executive, Chris Whitehead said the drop in profit was mainly due to the introduction of a new core banking system now being reflected in the accounts. But he said benefits are now flowing from this investment and will grow further over the coming years.
“The reduction in net profit for 2014 was due primarily to our strategic investment in key areas of the business, importantly the implementation of our new core banking system which is already providing a competitive boost for our ability to provide innovative products.”
Whitehead said the record loan growth underpinned the strong full-year result.
“Our lending growth has been largely driven by the continued success of our award-winning products such as our Rate Breaker Package home loan and investment in our various distribution channels, including our new online banking system, state-of-the art branches.
“Our Rate Breaker Package continued to deliver value through a 1% discount below the average of the advertised standard variable home loan rates of the 4 major banks.”
Looking ahead, Whitehead said CUA will continue to remain a competitive alternative to the big four.
“Our customer-owned model means we will always make rate decisions that are in the best interests of our customers, not necessarily our bottom line and we’re proud to offer our customers some of the lowest rates in Australia,” he concluded.