CUA profit falls one fifth

Australia's biggest credit union, Credit Union Australia, reported a fall in underlying net profit to $36.7 million for financial year 2008, down from $44 million a year before.
Net profit attributable to members was $60.6 million due to abnormal gains, including a $13.4 million net gain on a property sale and gains on financial assets designated at fair value.

Residential lending increased eleven per cent for the year to $5.9 billion, with half of these loans domiciled in Queensland, 29 per cent in New South Wales and 18 per cent in Victoria.

Overdrafts fell 16 per cent to $116 million, which acting chief executive officer Rob Nicholls said was due to members using more credit cards, which CUA has outsourced to Citibank.

"One of the down sides is that it is impacting our personal loans and overdrafts," Nicholls said. There are over 22,000 of these cards on issue.

Term deposits increased 43 per cent to $1.8 billion, with at-call funds up seven per cent to $2.4 billion.

Retained earnings increased 13 per cent to $531 million.

Nicholls said the 27 per cent jump in general expenses from $23.6 million to $32.2 million for the year was due to CUA improvements, which included the CUA signage changes at all 73 branches and an increase in television and marketing campaigns.

CUA has 403,000 members, but only 35,000 mortgages.

"We know about 40 per cent of our members have a home loan, so I think there is a great opportunity there," Nicholls said.