The country's biggest credit union, CUA, has reported a 13.7 per cent fall in profit for 2014 to $49.6 million, despite new loans growing by 16.7 per cent to $309 million and its loan book rising 4.9 per cent to $9 billion.
The Queensland based company said the profit fall was mainly due to the $10 million cost of a new core banking system introduced over the past three years now being reflected in its accounts. But CEO Chris Whitehead said they had already launched three new products online they couldn't have without it, adding it was boosting its ability to compete.
He said CUA had achieved record loan growth, but he said they had held net interest margins – the difference between what they pay for deposits and what they earn on loans – flat.
"Because we are owned by our customers, the key difference for us [to a listed bank] is that we don't have to pay dividends," he said. "That allows us to pay our dividends through lower rates."
Consolidated assets were up 3.5 per cent to $10.3 billion. "Our lending growth has been largely driven by the continued success of our award winning products such as our RateBreaker package," he said.
"Our customer owned model means we will always make rate decisions which are in the best interests of our customer not necessarily the bottom line."
Most of CUA's loans are mortgage and personal loans. Like most lenders, Mr Whitehead said most of their growth had come from investors buying property in Sydney and Melbourne, but in the last couple of months subdued Queensland borrowers – 45 per cent of CUA's loans – were leading a big pick up in growth.
"The residential market has been quite flat in Queensland," he said. "But it is not unusual for Queensland to lag NSW and Victoria, and investors are now seeing good value here.
"We have seen a really big acceleration over the last few months in borrowing."
