Strong financial results for credit unions and building societies
15 September 2009
Credit unions and building societies have recorded strong results in 2008-09 with figures out today showing a sector-wide net profit of $344.5 million and total assets increasing to $67.5 billion.
“This performance is particularly impressive because it has been achieved during the global financial crisis and a domestic economic downturn,” said Louise Petschler, CEO of Abacus - Australian Mutuals.
Figures issued by the Australian Prudential Regulation Authority (APRA) show that credit unions increased housing loans by 10.3 per cent in the year to 30 June 2009. Credit unions had deposit growth of 11.7 per cent. The takeover of Home Building Society by Bank of Queensland is reflected in a small reduction in total housing loans by building societies.
The charge for bad or doubtful debts was a very low 0.10 per cent for credit unions and a remarkable 0.04 per cent for building societies.
“These figures prove yet again the resilience and strength of the mutual banking business model,” Petschler said.
“Australia’s credit unions and building societies have absorbed the shocks and stresses of this unprecedented period of turbulence and have performed much better than many global banks and their domestic peers.
“The reduction in net profit of 24 per cent for our sector compares well with the 43 per cent reduction experienced by regional banks.
“The fall in profit reflects factors such as the impact on margins of interest rates being cut to ‘emergency’ levels.
“The outlook for the sector is bright with the impact of one-off factors already receding.
“Credit unions and building societies are well placed to meet the ongoing challenge of a difficult economic environment and the competitive challenge of a market dominated by the big banks.
“Credit unions and mutual building societies are entirely customer-focused and are not driven to maximise profits for external shareholders. This is reflected in our market-leading customer satisfaction ratings.
“We call on the Rudd Government to support competition and choice in retail banking, for example by reforming the anti-competitive fee structure in its Guarantee Scheme for Large Deposits and Wholesale Funding.
“The current fee structure has had the unintended effect of strengthening the position of major banks against their smaller, more customer-focused competitors.
“A fair fee structure will further boost competition in the lending market and send a strong signal about the Government’s confidence in the strength of Australia’s prudential regulation regime for ADIs.”
For more information:
Pamela Eldridge
Senior Adviser – Media
02 8299 9024, 0423 843 790
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Louise Petschler
Chief Executive Officer
02 8299 9036, 0408 239 226
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
