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Strong CUA member growth reflects success of innovation and digital initiatives

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Investment in digital opportunities, innovation and lifting the visibility of CUA’s brand is paying off for Australia’s largest credit union, with full year results for CUA showing its strongest member growth in recent years. The strong result also enabled the member-owned credit union to significantly increase its commitment to community initiatives for the year.

CUA recorded an annual Group Net Profit after Tax (NPAT) of $55.87 million for the 12 months to 30 June 2017, an 8.1 per cent increase on last year’s result.

CUA Chief Executive Officer Rob Goudswaard said the result was underpinned by net member growth of 13,409 members for the year, CUA’s strongest growth in recent years and almost 70 per cent higher than 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. 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,” he said.

The financial result also reflected higher net interest income, record levels of personal loans and the benefit of CUA’s diversified business, with strong CUA Health NPAT of $7.51 million helping to offset the impact of challenging market conditions on the banking business.

“Investing in sponsorships, like the Brisbane Heat cricket team, is helping lift awareness of CUA, with market awareness of CUA increasing more than 4 per cent off the back of the Big Bash League (BBL) season,” Mr Goudswaard said.

“Positive member growth and a strong financial position means we can continue to work towards our goal of being available to our members ‘anywhere, anytime’ by investing in innovation and improved digital experiences.

“Enhancing our digital channels and innovating are essential to attracting new members and evolving our service to respond to changing member preferences. But more than that, our digital journey is about building deeper, more personalised relationships with our CUA members by bringing a human, interactive approach to digital banking.”

CUA significantly lifted its investment in community initiatives by almost 50 per cent this year to $2.28 million, up from $1.54 million. The investment supported diverse national and local community organisations.

Mr Goudswaard said CUA had increased its commitment to Red Nose and their quest to save the lives of babies and children, and to the indigenous financial literacy work of the First Nations Foundation, signing on as Mission Partner to both organisations for the next three years. CUA rolled out the first round of its Mutual Good Community Grants, helping support local not-for-profit groups to make a positive social impact in communities. CUA team members also stepped up their contribution to community, with more than 500 days devoted to volunteering.

The community investment represents 2.8 per cent of CUA’s Net Profit before Tax & Community (NPBTC) of $80.22 million, consistent with the organisation’s promise to invest up to 3 per cent of NPBTC to community over the coming years.

Mr Goudswaard said CUA’s strong financial performance meant it was also well placed to continue to invest in innovation and digital opportunities, with the potential to deliver significant improvements to how members engage with CUA for their banking, health and insurance needs.

“This year, we made a significant investment in innovation by joining global banking innovation collaboration, Pivotus Ventures. This enables CUA to supplement our involvement with the Australian fintech and startup communities by tapping into international banking expertise, to explore and develop new digital banking opportunities. We are already planning for a pilot of the first digital initiative from the international collaboration during FY18 – an app which will be an Australian first in personalising members’ digital interactions with CUA.

“Looking ahead, our innovation and digital priorities will build on the investment we’ve already made in our technology systems this year, which has included bringing Apple Pay, Android Pay and Samsung Pay to members, and building a new mobile banking app which will go live in the coming months. We are also looking forward to bringing our members the benefits of real-time payments when the New Payments Platform goes live.”

Mr Goudswaard said CUA’s success this year reflected its commitment to working together with members to support their financial needs through changes in their lives. He noted that Hatch - the initiative launched by CUA in April for parents planning, expecting or raising a baby – was already driving member growth and positive feedback.

“As a member-owned organisation, CUA’s profits are reinvested back into our business so CUA can help even more Australians to buy their own home, or support them to achieve their other financial goals, in the year ahead. We will do this while continuing to invest in building stronger communities and making a positive impact on important social issues,” Mr Goudswaard said.

CUA’s banking operations (ADI)

CUA’s banking business (or ADI) achieved a full-year NPAT of $49.65 million, down 6.4 per cent from the FY16 result of $53.03 million.

CUA issued $2.81 billion in new loans for FY17. Lending volumes improved in the second half of the financial year, with $1.64 billion in new lending in the six months to 30 June 2017. 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. While owner occupier and investor home loans accounted for $2.53 billion of the new lending, CUA’s personal loan performance was a standout with a record $256.58 million in personal loans issued over the period – a 37.9 per cent increase on FY16 personal lending of $186.1 million.

Mr Goudswaard said the ADI’s net interest income of $239.22 million was up 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.

CUA Health

CUA has continued to invest in the growth of its wholly-owned private health insurance subsidiary, with CUA one of the few organisations in Australia to offer integrated financial, health and insurance solutions. CUA Health improved NPAT for the year to $7.51 million. CUA Health recorded premium revenue of $143.59 million, up 5.8 per cent. The insurer returned $122.41 million in benefits for its policy holders, equivalent to 85 cents in the dollar.

The strong result reflected lower claims activity across the industry, a new CUA Health strategy for its investments which delivered higher returns, and the success of the new suite of hospital and extras cover launched in November.

The strong performance will support CUA Health’s continued rollout of new initiatives to benefit members including proactive health, wellness and disease management programs, as well as improved information and search tools to help members choose their medical specialist. The fund is exploring options to introduce loyalty discounts and enhanced product features for 2018, to return even more value to members.

Credicorp Insurance

Credicorp Insurance posted a half-year NPAT of $1.13 million, down 1.0 per cent for the year. This subsidiary now provides general insurance to more than 13,700 members. The result reflected the lower levels of new lending in the banking business, with Credicorp policies typically taken out by borrowers applying for a new home loan or personal loan.

HIGHLIGHTS FOR FY17

Financial & member highlights for year ended 30 June 2017 (FY17):
  • CUA Group Net Profit after Tax (NPAT) of $55.87 million, an 8.1 per cent increase on the previous year’s result.
  • Consolidated assets up 6.6 per cent to a record $13.75 billion
  • Loans under management up 3.0 per cent to $11.53 billion
  • $2.81 billion in new loans settled during the year, down 4.0 per cent
  • Retail deposits up 5.2 per cent to a record $8.76 billion
  • 13,409 additional CUA banking members, taking total members to 453,122

Key achievements for FY17:
  • CUA rolled out Android Pay, Apple Pay and Samsung Pay mobile wallets. CUA was the first credit union in Australia to offer Apple Pay for Mastercard.
  • CUA launched online and mobile account opening for five popular CUA transaction and savings accounts, enabling new-to-CUA members to join CUA and open a transaction account online in just a few minutes.
  • CUA launched its new Home Loan Switch Online self-service tool for borrowers to switch loans at the end of their fixed rate period. The initiative recently won the Process Improvement and Innovation Award at the 2017 OPEX Excellence Awards.
  • CUA officially opened its first Community Hub in Toowoomba, a shared space for banking and community use which was co-designed with members. CUA also opened a new look Robina branch on the Gold Coast.
  • CUA and People’s Choice Credit Union launched their new joint venture procurement and accounts payable services company, Mutual Marketplace, in April. The joint venture provides scale benefits and streamlined operations for both organisations.
  • CUA’s Hatch initiative was launched, offering a tailored suite of products and services for parents who are planning, expecting or raising a child.
  • In July 2016, CUA teamed up with Queensland Cricket for three years, providing support at all levels – from junior, local and state cricket through to the Brisbane Heat men’s and women’s sides in the Big Bash League (BBL) and Women’s Big Bash League (WBBL).
  • CUA became the headline sponsor for the CUA School Fun-Run in its 9th year of supporting the healthy fundraising initiative.
  • CUA extended its support for charity Red Nose (formerly SIDS and Kids) and indigenous financial literacy organisation First Nations Foundation, becoming the mission partner for both groups.
  • CUA awarded $70,000 in grants to community groups across Australia in its Mutual Good Community Grants program. A further $70,000 was awarded to schools in Queensland, New South Wales and Victoria as part of CUA Community Care.
  • CUA received the Money Magazine award for Credit Union of the Year 2017.
  • CUA was awarded its 3rd consecutive WGEA Employer of Choice for Gender Equality citation in December 2016.