Despite a conservative growth model and a drop in member numbers, Credit Union Australia (CUA) has recorded an underlying after tax net profit of $43 million for last financial year.
Earlier this year, former CEO Rob Nicholls told Brisbane Business News he expected a 10 per cent fall in profits, because with virtually no bad debt the organisation prefers stability over the share-price driven profits expected of banks.
What a difference six months makes to expectations in a volatile market.
Taking on the reins of a solid business model, newly-appointed CEO Chris Whitehead says underlying profit for the year to June 30 rose by more than 17 per cent, along with a similar rise in total deposits.
Whitehead says the results illustrate how well-positioned CUA is going forward, with total asset growth of 3 per cent to $7.7 billion.
“Despite challenging global economic conditions with pressure on interest margins and lower returns on retained capital, CUA has performed well with a 17.2 per cent increase in underlying net profit after tax over the previous year,” he says.
“We saw an increase in bad debts of a mere $200,000, excluding collective provisions, for the entire year regardless of the doom and gloom reported.
“With past-due loans of $6.5 million representing just 0.1 per cent of gross loans, we have a high quality loan book and we are in a strong position.”
He says access and services for members have been boosted with expansion into the 3100-strong rediATM network, as well as the incorporation of Victoria Latrobe Country Credit Co-operative into its operations.
Despite increased customer offerings, CUA’s member numbers declined by 5235 last year but this coincided with a $725 million rise in member deposits.
“As a mutual financial institution, CUA is committed to serving our members and providing a better value proposition than the banks. We will continue to strive to make a change for the better in the lives of our members, staff and the communities we serve,” says Whitehead.
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