Powered by MOMENTUM MEDIA
subscribe to our newsletter
APRA curbs cost major credit union mortgage customers

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.

Advertisement
Advertisement

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.

“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.

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

The major bank’s net interest margin has been strengthened by its out-of-cycle mortgage rate hikes, contributing to quarterly cash earning...

ASIC’s decision to undertake a review and consider changes to responsible lending guidelines will be “credit positive” for the mortgag...

The banking royal commission has not spurred a deterioration in satisfaction among customers of Australian banks operating in New Zealand, a...

FROM THE WEB

POST RC PANEL DISCUSSION ADDED

podcast

LATEST PODCAST: The current mindset of the mortgage industry

Is enough being done to ensure responsible lending?