CUA first-half profit up nine percent on net interest margin, loan growth
Credit union CUA announced a nine percent rise in its group net profit after tax (NPAT) in its first-half ended December 31, driven by strong loan growth and net interest income.
The CUA Group – which includes its banking operations (the ADI) and CUA subsidiaries and insurance businesses – also recorded asset growth of more than $500 million over the six months to 31 December 2015, taking consolidated assets to a record $12.5 billion, it said.
Loans grew 4.2 percent to $10.83 billion, with $1.5 billion in new loans.
NPAT was $28.05 million, while net interest income was up 5.7 percent or $6.17 million for the period to $113.75 million, boosted by strong lending in FY15, new products and interest rate changes, it said. CUA said it was on track to improve its net interest margin during the second half.
CUA’s banking business (or ADI) posted a first-half NPAT of $30.85 million, up 12.5 percent on the previous first-half result of $27.43 million.
“This is another solid financial result for CUA which reflects our focus this year on sustainable growth, investing in our future capability and building capital to enable us to lend to more customers,” CUA chief executive officer Rob Goudswaard said.
Since launching CUA’s updated mobile banking app in October, online banking has attracted 9,500 new mobile users and the number of new registrations each month is up by 46 percent. CUA recently launched a new website.
Goudswaard said he was pleased with the continued high quality and low risk of CUA’s lending growth. Home loans with a Loan to Valuation Ratio (LVR) above 90 per cent account for less than 8 percent of CUA’s total home loan portfolio. Impairment charges were down 9.6 percent on the same period last year and CUA’s loan arrears are around half the rate being reported at industry level.
“We also launched two new home loan products in July 2015, giving borrowers a greater choice of rates and features, depending on the size of their deposit and whether the customer is buying the property to live in or as an investment. In addition, we implemented different rates for investors across variable and fixed home loans, in response to the regulators’ focus on managing growth in investor lending.
Last year, Goudswaard had said new loan growth would not be as strong in 2016 as it needed to peg back growth in its investor loans, which is at 16 percent, were above the banking regulator's 10 percent growth cap.