Credit Union Australia Ltd (CUA) has reported an 8% rise in first half net profit and says loans and deposits grew strongly in the six month period.
CUA said yesterday that unaudited net profit in the six months to December 31 was $21.6 million, up from $20 million in the previous corresponding period.
Like the banks and their updates, the result for the CUA was steady, but not brilliant.
It forecast "modest" profit growth ahead, and further increases in its assets under management to almost double to around $16 billion over the next five years.
CUA saw assets under management grow to $8.84 billion in the six months to December 31, adding $682 million in the period, and up from $7.8 billion a year earlier at the end of 2009.
The credit union said it wrote over $1 billion in new loans in the first half, while deposits grew by 7.7 % to $5.34 billion.
Three quarters of CUA’s funding comes from deposits, with the remainder sourced from securitisation.
Profit growth was modest as investments are channelled into CUA’s growth, chief executive Chris Whitehead said in the statement.
"These are good results for the interim period, reinforcing CUA’s solid financial position as we progress our strategic growth projects and continue to reinvest into competitive products and services," he said in a statement.
"We are totally committed to our strategy to grow and improve efficiencies across the business and to achieving our ambitious targets of doubling assets under management within five years."
CUA says it has over 400,000 Australian customers, which it says are the owners of the company as all profits are reinvested into the business.
Capital adequacy remains strong at 14.2%.
Mr Whitehead said the "benefit of our prudent, customer-owned business model is that all profits go directly back into the business and are represented in cost savings for our customers through competitive rates on products and services, instead of as dividends to shareholders.
“We have scored a number of goals already this year – being assigned a credit rating was a significant milestone in our strategy for growth and the volumes generated in our home loan business have set a high benchmark.
"Maintaining this momentum will be a key priority over the rest of the 2011 financial year.”
