CREDIT Union Australia has undergone a renaissance of sorts in recent years with Chris Whitehead at the helm.
Whitehead was appointed CEO of the customer-owned financial institution in 2009 to reinvigorate the brand.
Under his leadership, CUA underwent a complete overhaul of its internal systems and achieved a record $10.3 billion in consolidated assets.
The achievements were no easy feat, but will place the company in a strong financial position after Whitehead leaves to pursue other opportunities.
His official departure date is yet to be confirmed and he will remain at CUA until a suitable replacement is found.
Whitehead tells Brisbane Business News that retirement is definitely not on the cards just yet, as there’s still much more to explore.
“I joined CUA saying five to six years and I think that’s not a bad tenure for a CEO,” Whitehead says.
“In terms of my own goals and life plan, I felt I could achieve what I was being asked to achieve in five years.
“The board had a very clear agenda with what they wanted to see for CUA, in particular some key changes.
“They had great people, culture and customer service but there had been a significant underinvestment in both the business assets and in the people.”
Underpinning the revival was the implementation of CUA’s new core banking system in October 2013.
The mammoth undertaking proved to be much more than a technological update, but also driving the company’s unified approach to banking, lending and mobile technology.
"Become the leader like Spotify and not the video store that doesn't exist."
Whitehead likened the process to changing a plane’s engine while still in flight – very difficult.
“Systems are very complex as banking these days is seven days a week, 24 hours a day,” he says.
“The few tangible things such as chequebooks, plastic cards and cash itself are all in decline, people are expecting it to be more and more digital.
“The challenge for everyone has been to become the industry leader like Spotify and not the video store that doesn’t exist.
“The project literally involved everyone in the organisation and I’m proud of the whole team.”
Net profit was down 13.7 per cent to $49.6 million in the full year to June 30, following the strategic investment into internal systems.
Results from the previous corresponding period were also skewed with $6.1 million boost in one-off cashflow hedge swaps.
Net annual interest revenue increased 5.2 per cent to $208 million and the loan portfolio received a 4.9 per cent boost to $9 billion, showing positive returns following the investment.
“Given it’s the year we put the core banking system into place, the growth is more market-aligned and we haven’t exceeded it to the extent we have in previous years,” Whitehead says.
“We are now growing very strongly again post new system and financially the underlying performance continues to be very strong.”
Another indication of success has been attracting new members, a key focus for Whitehead to accommodate for CUA’s ageing customer base.
“Ultimately a business wants to attract new and younger customers, particularly if you’re in the business of lending money to buy houses and cars.
“We don’t want to alienate our existing customers, far from it. They’re obviously incredibly important.
“So we have increased our marketing spend, but also significantly changed the tone of our marketing to attract young families trying to establish themselves financially.”
CUA’s efforts has made it the largest customer-owned financial institution in Australia, but that remains a far cry in the face of the big four banks.
The company is calling for a “level playing field” in the banking sector, having made submissions to the Financial System Inquiry.
"It would be a real shame if banking ends up being four lookalike competitors."
The crusade, as Whitehead calls it, is timelier than ever as the major players continue to “swallow up” the regional banks.
“CUA is committed to staying customer-owned as a mutual, but I expect over time the mutual industry will continue to consolidate and we’ll see further mergers,” Whitehead says.
“The reality is there’s not a lot left to consolidate, with the major banks holding 85 per cent of mortgages and growing their share even further.
“We think that competition is being harmed and that the big banks are getting a major advantage, it would be a real shame if banking ends up being four lookalike competitors.”
Whitehead will leave a lasting legacy at CUA, firmly establishing the company as a strong contender against the major banks in the future.
“I like to think that CUA is set up to continue to grow faster that the market and it will be a leader in the evolution of banking,” he says.
“Even though it won’t be the largest, it will definitely be a leader.”
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