Credit Union Australia Ltd (CUA), Australia’s largest customer-owned financial institution, has today announced reportable net profit after tax (NPAT) of $24.6 million for the half year period ending 31 December 2011, down 5.5% on the previous corresponding period (pcp) (1H2011: $26.0 million). CUA’s underlying NPAT increased 10.9% to $24.0 million. Interest revenue grew 18.6% on pcp, however this was offset by an increase in net expenses (up 20.9%) due to ongoing investment as part of the business’s growth strategy.
CUA delivered net annual interest revenue of $93.3 million, an increase of 23.5% and total assets under management also increased to a record $9.01 billion, up 2%. CUA grew retail deposits by $300 million (6.2%) to $6.4 billion.
Total numbers of new loans settled decreased by 33.8% to $701 million due to a downturn in consumer confidence and softer than expected economic conditions. CUA maintains a strong capital adequacy ratio of 13.8%.
CUA Chief Executive Officer, Chris Whitehead, said CUA’s 2012 interim result reflected its secure financial position and ongoing investment in the business as part of its articulated growth strategy.
“Despite prevailing economic headwinds, CUA has delivered a solid interim result positioning the business for long-term growth. We experienced strong growth in net interest revenue which was offset by major investments in the business, including in our new core banking system, which will support CUA’s future growth.
“We are currently in a phase of investment and consolidation and, as foreshadowed in our 2011 full year results, this will result in flat profit growth over the medium term. CUA is in a fortunate position however, as our customer-owned business model allows us the flexibility to make capital expenditure decisions for the long term benefit of the business and our customers,” Mr Whitehead said.
“CUA continues on a growth trajectory and defends our market position with assets under management and customer numbers both growing during the half to ensure CUA remains the largest mutual in Australia.”
CUA’s 1HFY 2012 in Review
CUA remains in a secure financial position and focused on delivering on its strategy in the year ahead. Mr Whitehead said CUA is making critical investments in key parts of the business to build a platform for future growth.
“Despite current economic challenges, we are optimistic about CUA’s future and expect interest revenue, assets under management and customer numbers to continue to increase in the next half. We are confident that our ongoing investment in the business as part of our established strategy will yield growth in the longer term and ensure we can meaningfully compete against Australia’s banks.
“We will continue to pursue partner alliances and merger partners to support our strategic approach and remain committed to our prudent approach to financial management,” Mr Whitehead concluded.
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