A hapless effort to transition to a new core banking system has resulted in Northern Inland Credit Union plunging deep into the red.
The credit union reported a pre-tax loss of A$2.7 million over the year to June 2023 following a pre-tax profit of $1.3 million in FY2022.
The loss reflected a write-off of $5 million in expenses on a now-abandoned effort to upgrade its core banking system to Temenos.
This is one of the largest losses for a credit union in Australian history.
“This year we made the difficult decision to discontinue our project for core system replacement, and we are now focused on working within our existing system, and developing it to its fullest capacity,” CEO Derek McIntyre and chair Robert Studte told members in the annual report.
“Whilst this reflects in our performance for this financial year, NICU’s capital ratios have not been impacted. A decision is being taken on recovery of some costs expended on the project to date.”
Based in Tamworth, NICU has branches in Gunnedah and Narrabri.
It had $280 million in receivables and $414 million in assets at the end of June 2023, both slight declines over the financial year.
Deposits also fell slightly to $367 million.