Vic expansion helps SA credit union to bigger profit
SA-based credit union People’s Choice has posted an increase in net profit and a growth in loans, attributing part of its success to a concerted effort to tap into the Victorian market.
People's Choice Credit Union CEO Steve Laidlaw. Photo: Nat Rogers/InDaily
The credit union today posed a 40% increase in net profit after tax for the 2015/16 financial year – $35.95 million compared to $25.66 million the previous year.
Despite a difficult market, People’s Choice also increased its total member loans by 8.5% to $6.45 billion, with a small decrease in personal loan balances more than offset by a 10% increase in residential loan balances.
People’s Choice CEO Steve Laidlaw said half of the increase in the loan portfolio had come from South Australia and half from Victoria, which he described as a new growth market for the credit union.
“Victoria has been targeted with real intent over the past year or so,” he said.
He said the credit union had started to focus on the eastern seaboard because it was likely to have higher economic growth than South Australia for the “foreseeable future”. However, he stressed that the SA economy had areas of strength and People’s Choice was optimistic about the local market.
The other area of growth was in memberships, particularly younger people, with 44% of the 23,456 new members who signed on in 2015/16 aged under 30 years old.
Laidlaw said the overall performance was significantly better than 2014/15.
“It’s been an outstanding 12 months for People’s Choice Credit Union,” he said.
“While we are not in the business of generating large profits for shareholders like the major banks, it is important that People’s Choice develops the necessary profit each year to ensure our long-term sustainability, to invest prudently in improving and delivering products and services for members that enhance their financial wellbeing, and to make a difference to the communities in which we live and work.”
He said the credit union’s differentiation from banks was a key selling point in the past year, particularly given the scandals gripping Australia’s major banks which have led to repeated calls for a royal commission.
Laidlaw said surveys of millennials (young adults) showed they consistently ranked “social good” as one of the top three responsibilities of corporations – something that may turn them away from major banks.
