CUA's broker-originated lending soars 36%

by AB02 Mar 2018

Brokers contributed 43% of credit union CUA’s total mortgage lending in the six months to December 2017 – up from 32% in the same period of FY17.

Australia’s largest credit union said at its result announcement last Friday that broker-originated mortgage lending stood at $502m in the first half of FY18, an increase of 36% from $370m in the first half of FY17.

Brokers accounted for just over 40% of CUA’s lending for the whole of FY17.

CUA’s new initiatives helped boost the performance of the broker channel, said national manager of intermediaries Natasha Kelso.

Last year, the credit union expanded its broker partnerships to include AFG – and has since been onboarding brokers as part of the new relationship.

It also joined the panels of Uno Home Loans and online mortgage finance platform LoanDolphin.

The first half of FY18 likewise saw it creating a dedicated broker member specialist role to reach out to its broker-introduced members.

“It is really important to CUA that we are providing members with a choice of channels for obtaining home loans, and brokers continue to be an important part of that mix,” said CUA national manager of intermediaries, Natasha Kelso.

The credit union said it issued a total of $1.28bn in loans during the six months to 31 December 2017, including around $1.18bn in home loans and $121m in personal loans.

While new loans settled during the period went up 9.1% to $1.28bn, loans under management stayed flat at $11.49bn.

The union said its lending volumes suffered from the “very competitive” owner-occupier lending market – which it said fuelled a high level of refinancing activity across the sector. 

It also attributed its lower lending volumes in the first few months of FY18 to CUA’s pause on investor lending implemented in March 2017, to make sure it remained within APRA’s benchmarks.

“This was consistent with the Productivity Commission’s observations that investor lending restrictions, or macroprudential measures, were negatively impacting smaller lenders,” it said.

CUA has since made a phased return to investor lending, but said it was unable to consistently support all of its investor members’ lending needs during the period. This in turn adversely affected its lending growth and retention of investor members.

It said that loans refinanced from CUA to other lenders in July 2017 were 33% higher than the same time a year earlier.

 
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