Powered by MOMENTUM MEDIA
subscribe to our newsletter

APRA curbs cost major credit union mortgage customers

CUA chief Rob Goudswaard has said that the mutual’s half-year mortgage performance is consistent with the Productivity Commission’s observation that APRA’s curbs have negatively impacted smaller lenders.

CUA posted a 4.9 per cent fall in cash profit to $35.31 million over the six months to 31 December 2017.

Although $1.28 billion in new loans settled over the period, up by 9.1 per cent, CUA’s loan book remained flat at $11.49 billion.

CUA chief executive Rob Goudswaard said that lending volumes were impacted by strong competition in the owner-occupier lending market, which fuelled a high level of refinancing activity across the sector.

“CUA’s pause on investor lending, implemented in March 2017 to ensure CUA stayed within regulatory benchmarks, also contributed to lower lending volumes in the first few months of FY18,” Mr Goudswaard said.

Advertisement
Advertisement

“This was consistent with the Productivity Commission’s observations that investor lending restrictions, or macro-prudential measures, were negatively impacting smaller lenders.

“Although CUA has since made a phased return to investor lending, CUA was not able to consistently support all of its investor members’ lending needs during the period, which adversely impacted lending growth and retention of investor members.”

Loans being refinanced from CUA to other lenders in July 2017 were 33 per cent higher than the same time a year earlier.

However, after launching a new mortgage product, the CUA Advance Variable Home Loan for owner-occupiers, and running its “Good Move” home loan marketing campaign, CUA did see lending rebound in the final few months of the last calendar year.

“Net interest income (NII) was also higher at $126.16 million, up by 6.3 per cent on the prior first-half. The stronger momentum on lending has continued into the second half,” Mr Goudswaard said.

PROMOTED CONTENT


The credit union continued to see strong growth in its personal loans business with $121.1 million issues over the six months, up by 13.8 per cent on the prior corresponding period.

[Related: CUA impacted by ‘extremely competitive market’]

APRA curbs cost major credit union mortgage customers
mortgagebusiness

Latest News

Reverse mortgage lenders have accessed a small fraction of the potential retiree housing market in Australia, according to Deloitte. ...

Pepper Money has priced its second I-Prime deal for the year, upsizing the figure to $850 million. ...

The LMI provider has announced a new CFO following the resignation of its current CFO, effective 24 September. ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

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.