subscribe to our newsletter

CUA ‘impacted by extremely competitive market’

The credit union has revealed that its loan volumes were down by 4 per cent in the last financial year, adding that it was “impacted by extremely competitive market conditions” in the first half of the year.

According to CUA’s full-year results, the credit union settled $2.81 billion of loans in the first half of the year, with $1.64 billion of it coming in the six months to 30 June 2017.

Reporting its results, the credit union said: “This was up on the $1.17 billion in lending for the first half, when CUA was impacted by extremely competitive market conditions. The result also reflected an active refinancing market.”

Brokers accounted for 41 per cent of new mortgage lending during FY17, 1 per cent up on the prior comparative period.

Around 90 per cent of the total loans written were for owner-occupiers, accounting for $2.53 billion of new lending. This can largely be attributed to the fact that the lender stopped accepting new investor loans earlier this year in a bid to remain below APRA’s 10 per cent growth cap (however, it has since begun a “phased return”, offering investor loans to those who also apply for an owner-occupier loan).


The chief operating officer of member services, Andy Rigg, explained at the time that the union had “observed an increase in new investor applications, particularly in response to some of the actions taken by other lenders to slow their investor growth”.

“In response to the continued growth in our investor lending and forward projections of this growth, we’ve taken the decision that we need to temporarily pause new investor lending,” Mr Rigg said.

Personal loan performance 'a standout'

While CUA’s banking business achieved a full-year net profit after tax (NPAT) of $49.65 million, down by 6.4 per cent from the FY16 result of $53.03 million, it stated that its personal loan performance was a “standout”.

The credit union issued a record of $256.58 million in personal loans over the period, 37.9 per cent more on the previous financial year.


In all, the credit union’s loans under management were up by 3 per cent to $11.53 billion.

CUA chief executive officer Rob Goudswaard said that the ADI’s net interest income of $239.22 million was up by 2.9 per cent on last year’s result, reflecting interest revenue flowing from the growing CUA loan book.

Capital adequacy increased slightly from 14.24 per cent to 14.28 per cent over the year, reflecting CUA’s strong capital position.

Overall, CUA recorded an annual group net profit after tax of $55.87 million for the 12 months to 30 June 2017, an 8.1 per cent increase on the previous full-year result.

Mr Goudswaard said that the result was underpinned by net member growth of 13,409 members for the year, CUA’s strongest growth in recent years that is also almost 70 per cent higher than its member growth in the prior 12 months.

“Over the past year, we helped nearly 10,000 members to buy or refinance their home or an investment property,” the CUA CEO said.

“We also assisted more than 12,000 members with things like buying a new car, taking a holiday or undertaking a renovation, setting a new CUA record for personal loans.”

Looking to the future, Mr Goudswaard said that CUA’s “strong financial performance” meant that it was well placed to continue to invest in innovation and digital opportunities, such as its partnership with US-based Pivotus Ventures.

[Related: APRA taken to task over banks’ back book repricing]

CUA ‘impacted by extremely competitive market’

If you’re feeling overworked and overwhelmed in this fast-paced mortgage market, it’s time to make some changes, and the Business Accelerator Program can help! Early bird tickets are on sale now. Work smarter, not harder, this year.

Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Contact Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

The prudential regulator has written to ADIs to ensure that they are proactively managing lending risks and focusing on lending standards am...

As it waits for APRA to approve its acquisition of MyLife MyFinance, Challenger has flagged plans to expand the bank’s lending remit to co...

Australia has the second-highest mortgage debt as a proportion of GDP among OECD nations, according to a new report. ...

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.