CUA celebrates record number of new loans by investing

CUA growing in leaps and bounds

Australia’s largest customer-owned financial institution, CUA, has announced it opened a record number of new loans in the 2014-2015 financial year.

They issued a record $3.35 billion in new loans – a 55% increase from 2013-2014. This resulted in a 10.7% increase in their net profit after tax.

CEO Rob Goudswaard credited the bulk of this to new home loans and said this was “driven primarily by growth in owner occupier housing”.

In spite of their growth in the 2014-2015 year, it was unable to keep up its previous levels of goodwill or “impairment charges”. Its impairment charges fell from $5.8 million in 2013-2014 to $3.0 million in 2014-2015. Goudswaard says this reflects the high quality and low risk of the loans they have been opening this year, as they haven’t needed to write off as many under goodwill.

CUA invests growth into technology

As a result of their success, CUA now plans to invest more than $24 million in technology and digital initiatives in 2016, to enhance the experience for customers and brokers alike. Not surprisingly, this plan includes the delivery of a new loan system to streamline and enhance loan processing, in the hope of even more loans and further profits.

The new simplified approach to home loans will reduce the ‘time to yes’ by approximately 50% so that customers will know sooner whether or not their home loan has been approved. They will also be simplifying their loan contracts, document packs, and other templates.

CUA’s general manager of business transformation and technology, Sue Coulter, said, “There is a real focus within CUA on enhancing the customer experience, so a lot of our spend in this current financial year is designed to do just that.”

Document management services for brokers are also on the agenda for improvement. CUA’s broker channel accounted for $1.3 billion or 40% of new residential home loans settled this year.

The institution aims to make life easy for brokers by enhancing communication channels and help brokers keep abreast of the status of home loans. Because brokers will then have full visibility, the need for communication will be less, reducing more costs from the company’s profits.

Ms Coulter said, “Brokers were really important to us when we were putting this all together so we have really tried to ensure we make the experience better for our brokers as well as our customers.”