A message from our

CEO & Chairman`s Office

It is a privilege to reflect on the continuation of CUA’s mutual journey in 2019. A clear focus on our members’ interests has seen us pursue exciting new initiatives, including our continued investment in digital channels and streamlining processes to ensure we remain relevant to members today and into the future.


As we have done for the past 73 years, we also navigated opportunities and challenges by placing members at the heart of our decisions, including facing into the headwinds being felt across the financial services sector.

Financial performance

Over the past year, a record number of new members joined CUA with a net increase of 33,829 members across banking and health — more than twice as many new members as the previous year.

Strong balance-sheet growth for the year saw CUA exceed our FY18 results across consolidated assets (up 10.1 per cent to $15.76 billion); loans under management (up 9.3 per cent to $13.44 billion); and retail deposits (up 14.8 per cent to a record $10.58 billion).

CUA Group posted a Net Profit After Tax (NPAT) of $37.77 million (down 31.1 per cent on FY18), reflecting the $11.7 million post-tax impact of the non-recurring items, linked to legacy issues.

The first of these non-recurring items related to the financial planning business we sold in 2014. Where clients had paid fees for ongoing advice during the period we owned the business, investigations were unable to clearly establish whether financial planning advice had been provided in all instances. Where there was uncertainty about whether the financial planning advice had been provided, CUA decided to act in the best interests of the impacted members and repay the fees. This remediation had a post-tax financial impact of $7.40 million on the FY19 result.

Secondly, CUA is decommissioning some components of our current lending systems, resulting in a $4.3 million post-tax impact.

Our FY19 NPAT result was also impacted by economic conditions which have been challenging not just for CUA, but also for our competitors. Volatile investment markets, a subdued property market and low levels of consumer confidence have driven these conditions. Elevated wholesale funding costs early in FY19 and a record low Reserve Bank of Australia (RBA) cash rate placed pressure on CUA’s already tight margins, which impacted profitability. However, even against this economic background, we kept our current and future members’ needs front-of-mind, ensuring our lending and deposit rates remained competitive and with our continued investment in digital channels and service improvements.

CUA Health made a positive contribution to the group result, recording $7.88 million in NPAT for the year. The insurer defied industry challenges and falling health insurance participation rates nationally to issue more than 7,000 new policies, a 71.5 per cent uplift on the previous year. A total of $123.26 million in claims were paid, up $2.62 million from FY18. More than $3 million was returned in savings to members through the 4 per cent discount for those with both CUA banking and health insurance.

Delivering more for our members

Our continued investment in digital channels and service improvements delivered value to members across a range of channels.

CUA has invested $58.5 million in technology systems and software since 2016 to improve member experience, while delivering simple, competitive and effortless products and services. This investment will allow CUA to change direction and move forward with investing in enhanced lending origination capabilities to transform our end-to-end lending process. The result will be a better experience to meet the changing needs of our members, while supporting future home loan growth.

More than 16,000 members began chatting to their own personal banker using our Australian-first iM CUA app, with the innovation earning CUA the title of ‘Most Innovative Mutual’ at the RFi Group Australian Banking Innovation Awards.

Member onboarding has been simplified and we increased self-service capabilities in Mobile and Online banking. This included integrating real time payments capabilities into our Mobile Banking app. Around 350,000 transactions per month are now being facilitated in real time via the New Payments Platform.

We also invested in our physical channels, including our second Community Hub branch at North Lakes in Queensland.

A total of $2.2 million — or 3 per cent of our pre-tax profit — was dedicated to our community investment program over the year, as we strengthened our focus on the financial wellbeing of our members. This program included partnering with BuyAssist to help essential workers overcome housing affordability barriers and buy their first home. We also signed up to work with new partners including Good Shepherd Microfinance and Thriving Communities Partnership to tackle barriers to financial inclusion.

Our people

Culture remains a core strength for CUA, reflecting the transformation of our business in the past few years to implement the right capabilities and organisational culture.

Team member culture and engagement scores continued to improve this year against a backdrop of falling engagement levels across the broader financial services sector. This member-focused culture also drove increased member advocacy, with CUA narrowing the gap to the market leader for Net Promoter Score and ending the year ranked third on this measure of how likely our members are to recommend CUA.

Chief Technology Officer Steven Willson and Chief Marketing Officer Megan Keleher joined the executive team this year, bringing a depth of experience that will help CUA deploy integrated technology, and brand and marketing strategies to deliver on our digital growth aspirations.

Accelerating our mutual journey

Looking ahead, we will continue to focus on our five-year strategy and our vision to be Australia’s mutual leader in growing the financial wellbeing of our members.

A key aspect of this is future-proofing our business by ensuring our readiness to issue capital, if an opportunity emerges. Legislation passed by the Australian Government in April this year, in response to the Hammond Review into mutuals, was a major win for our sector and opened the door to raise capital in the future. Access to capital will better equip CUA to invest, grow, innovate and compete, while remaining committed to our future as a mutual – a strong organisation owned by members for the benefit of members. A key step on our capital journey will be to seek members’ support at our 2019 AGM to update our CUA Constitution to align to the new legislation. Information on these proposed changes are included in the Notice of Meeting materials available at www.cua.com.au/agm. We urge you to help CUA prepare for the future by supporting the proposed Constitutional changes.

A word from the Chairman

It would be remiss to wrap up without acknowledging Rob Goudswaard’s contribution in leading CUA over the past five years and wish him well as he embarks on a new chapter in his career. He has brought a passion for mutuality, challenging our team members to redefine CUA’s purpose and bring it to life every day. Rob has been a passionate advocate for our sector with government and industry. He also encouraged our organisation to be brave in striving to be a digital leader. His leadership earned him industry-wide respect and recognition as CEO Magazine’s ‘Financial Services Executive of the Year’ in 2018.

From 1 November 2019, Paul Lewis will step into the role as CUA's new CEO. Paul has been with CUA as our Chief Sales Officer since February 2018. His strong experience in retail banking and his values-based approach to leadership make him an exceptional choice to steer CUA through the next phase of our growth.

I am confident the strong executive leadership team and culture that Rob has helped to build, and which Paul will continue to strengthen, will allow us to seize the opportunities and embrace the challenges we face in 2020 and beyond. We look forward to you joining us for another year on our mutual journey.

Rob GoudswaardCEO
Nigel AmpherlawChairman