Margin squeeze hurts Police & Nurses

Police & Nurses Credit Society reported a 50 per cent decline in profit to $9.7 million in the year to June 2009.

The decline in profit is on the high side for the sector, though all credit unions are reporting significantly lower profits for the last financial year. The profit decline for PNCS reflects the same trend of lower interest margins, driven by the need to pay up for deposits and to manage higher levels of liquidity late last year and early this year. For PNCS the interest margin fell to 1.46 per cent from 2.01 per cent.

Other business indicators for PNCS are reasonably good, based on the few measures included in a media release on Friday.

Deposits increased 30 per cent to $1.6 billion while 9000 new members joined over the year, many of them former customers of Home Building Society seeking a Western Australian-based deposit-taker following the takeover of Home by Bank of Queensland.

 Impaired loans and loans past due were $4.6 million and $17.4 million at June 2009, the quarterly risk disclosure document for the June 2009 quarter shows.