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Chairman's report

Alan Beanland - Chairman and Independent Non-Executive Director

It’s always a pleasure to contribute to CUA’s Annual Report and reflect on what has been a year of very strong growth and performance in a difficult environment where we have delivered on the initiatives to which we committed to remain relevant to our members. It is a reminder of the important role all of us at CUA have in protecting and enhancing the well-being of our members and our wider community.

Last year I commented that forecasting would become more difficult due to economic and political conditions and so it has proven to be. I also said that notwithstanding these headwinds, CUA was well placed to continue its steady growth of recent years. I’m pleased to report that CUA continues to be in a strong position financially with a significant increase in consolidated assets to $12.90 billion up from $11.99 billion last year, a consolidated Net Profit After Tax of $51.66 million (up 5.8% from $48.81 million), loans settled totalling $2.93 billion and deposits up 7.1% to $8.33 billion. Our capital resources have increased significantly and our capital adequacy ratio sits at an optimal 14.25%. We hold over $900 million in net assets. This reinforces our position as a strong and stable competitor in the financial sector. We could not have achieved this without our members and I thank them for their ongoing support of CUA and its business. We welcomed around 8,000 new members this year, taking the total number of people entrusting us with their financial security to 439,713.

I said that CUA would further refine its product suite in line with a changing competitive environment. This included a commitment to deliver the first truly CUA credit card. Our CUA credit card has been delivered and there’s been strong interest from our members in taking it up. This is an outstanding achievement and I would like to thank our people who contributed to its delivery. We continued to build upon our capital strength while ensuring pricing across the product suite reflected CUA’s need to balance continuing sustainability with our commitment to providing our members with value for money.

It was also another strong year of growth for CUA Health, with more than 8,600 new policies taken out during the year. We now provide private health insurance to 80,278 Australians.

Credicorp has grown as anticipated this year following our decision in 2014 to invest in the development of a new product suite and in particular to expand our product range to include a protection offer for members with a home loan. Around 4,600 new policies were taken out during the year and we now provide consumer credit insurance protection for 14,200 members.

CUA is evolving to ensure we are a genuinely Purpose-led organisation. The CUA team, including our members, have been actively involved in refreshing and renewing our Purpose during the past year. It’s exciting to see our renewed Purpose – members working together through life’s changes for mutual good – coming to life.

This is all part of our continuing transformation toward a modern mutual that reflects the needs, hopes and aspirations of our members and the communities to which they belong.

The Board also approved investment in two key areas which will further transform CUA by strengthening its foundations for the future:

  • Our Mutual Good Strategy – to lift and strengthen our community investment and partnerships; and
  • A new organisational structure to ensure we have the people with the skills and capability needed to deliver on our Strategy

Our People

Our members include our people at CUA. We are investing in our people through training and development opportunities to ensure they have the skills and capability to deliver on our business objectives and our commitment to members. With a footprint stretching from Cairns in the north to Traralgon in the south and Perth in the west, we are focused on recruiting the best talent and creating an environment where people look forward to coming to work each day and living CUA’s Purpose.

The Board approved a new organisational structure to ensure better business alignment with our goals of improving member services by uplifting our digital capability and member experiences, strengthening financial performance and sharpening our focus on community. I wish to thank our CEO Rob Goudswaard, his executive team and all CUA team members for supporting the Board and I’m looking forward to working with them closely in the coming year.

I also wish to thank my fellow Board members for their support. In November 2015, we welcomed Louise McCann to the Board.

Louise’s experience in a variety of sectors, including technology and media, complements and expands on the combined skills matrix of the Board.

I believe we have a strong Board at CUA with the skills and experience needed to enhance our transformation toward a modern mutual.

Looking forward

The headwinds I referred to earlier will continue to impact us in the year ahead with uncertainty driven by political and economic factors including the Brexit vote in the United Kingdom, historically low interest rates and global security concerns. It is more important than ever for CUA to keep its focus on remaining strong to protect and enhance the well-being of our members and our wider community.

The Board’s approval of CUA’s Mutual Good Strategy will significantly change the way we approach community investment. From FY17 CUA will start working towards investing up to 3% of Net Profit Before Tax and Community in community initiatives and use international standards to benchmark our impact and performance. This will be a key differentiator for CUA and will focus our team members on achieving financial performance goals to give us the flexibility to create even more ways to engage with, and through, our members for mutual good.

We will continue to focus on our Digital First Strategy, to keep abreast of the fast-paced digital environment and enable members to engage with CUA through the channel of their choice. We will optimise our branch footprint and other member touchpoints and deliver even more member-centric digital core products and services including Android Pay and an on-line account opening process.

To further our aspiration to be a modern mutual we may need to consider proposing a change to the constitution to enable us to raise more capital once we have had the appropriate discussions with our regulators. We will put this to a member vote at some stage in the next 12 months.

In the coming year CUA will celebrate its 70th birthday. I’m confident that by maintaining our focus on our financial and team member strengths as well as our members’ and community needs and aspirations, we will secure CUA’s future as a modern mutual.