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Australia’s largest member-owned banking organisation, CUA, has announced a Financial Assistance Package to help support its members impacted by the COVID-19 situation.
CEO Paul Lewis said CUA has listened to the concerns of its members over the past week and has prioritised measures that will help provide immediate relief to those most impacted.
Among the changes, CUA announced interest rate relief for home-owners with new two-year and three-year fixed home loan rates of 2.29 per cent p.a. (comparison rates* of 4.11 per cent p.a. and 3.94 per cent p.a. respectively) on offer for owner occupiers paying principal and interest – a reduction of at least 0.55 per cent p.a. The rates will be available for new lending and loan switches from 1 April 2020.
Members will also have an option to defer repayments on mortgages and business loans for up to six months1 if they are experiencing difficulty as a result of COVID-19. They can also extend their loan term by the same length of time to ease the pressure when repayments resume in the future.
CUA will lift its 12-month term deposit rates by 0.30 per cent p.a. to a market-leading 2.00 per cent p.a. and for members aged 55+ to 2.10 per cent p.a., helping those living on fixed incomes including retirees. Meanwhile, CUA Health private health insurance policy-holders will be able to suspend their policy and premium payments for three months if their income is reduced as a result of COVID-19.
“We are seeing a significant increase in members contacting us for support, including those whose job or income has been affected, as the nation continues its efforts to contain the spread of coronavirus,” Mr Lewis said.
“As a member-owned organisation, we have supported our members and communities for more than 70 years and it’s what we will continue to do as we face this challenge. We will be here to help members get through this period of uncertainty and get back on their feet.”
Mr Lewis said CUA had strived to support the diverse needs of its 560,000 strong member base.
“Our COVID-19 Financial Assistance Package contains relief for members with home loans, small businesses, deposits, personal loans and health insurance,” he said.
“Members with variable home loans have also received a 0.25 per cent p.a. interest rate reduction this week, following the RBA decision at the beginning of March, providing them with relief with one of the most competitive rates in market.
“This is an unprecedented situation and we are doing our best to provide much-needed relief, prioritising the assistance we know our members urgently need right now.”
The CUA Financial Assistance Package will include:
Support for members with home loans
<ul>
<li>
Reduction to fixed home loan rates: New 2.29 per cent p.a. 2-year and 3-year fixed home loan rates (comparison rates* of 4.11 per cent p.a. and 3.94 per cent p.a. respectively) for owner-occupiers making principal and interest repayments, effective Wednesday 1 April 2020 – a reduction of at least 0.55 per cent p.a. These rates are available for new or existing members.</li>
<li>
Repayment relief for members with home loans: You can defer your home loan repayments for up to six months if you are experiencing difficulty as a result of COVID-19. We can also extend your loan term by the same length of time to ease the pressure and minimise the increase to your repayments when you start to make them again. To apply online in just a few minutes, visit <a href="http://icm-tracking.meltwater.com/link.php?DynEngagement=true&amp;H=btYXC68syxmDVppbhVzFoYHdeMNV9070xvOlf%2FNdDQ0wXj6aidRhm9xCjWNfzPTg3iNx%2FAa4t%2FTEuHrerhKoECpU73Uhf2D7UXSRJLKb9%2Bb%2FnLrGlLndcbkj4%2BJM8eXB%2BpdQDlKXnbMabjBkCEhF%2BQ%3D%3D&amp;G=0&amp;R=http%3A%2F%2Fwww.cua.com.au%2Ftools-and-services%2Fsupport%2Ffinancial-assistance&amp;I=20200325063441.00000f0d4a3e%40mail6-114-ussnn1&amp;X=MHwxMDQ2NzU4OjVlN2FmYWY3NjM2MGYwMTA5ZDY4MjM1ODs%3D&amp;S=7kEPwJLrkY3wBsvKkVWshe_rbbzJuoZPg6e0t3FsuE8" target="_blank">www.cua.com.au</a>
</li>
<li>You can access fee free redraw and offset if you have a variable or fixed rate loan with these features. </li>
<li>We’re offering the flexibility to shift from Principal and Interest payments to Interest Only for eligible members. (Note a change of interest rate will apply).</li>
<li>If you’re paying more than the minimum repayment each month, you can request to reduce this to the minimum payment amount, freeing up extra cash flow.</li>
<li>We don’t charge annual package fees or account keeping fees on our home loan products and will waive any late payment fees on home loan payments.</li>
</ul>
Support for members with deposits
<ul>
<li>We’ve increased our 12-month Term Deposit rate by 0.30 per cent p.a., launching a special offer of 2.00 per cent p.a. interest rate for all Australians and a 2.10 per cent rate for members aged over 55 years. These rates are effective Wednesday 25 March 2020.</li>
<li>For members who have been impacted by COVID-19 and require additional assistance, the early release of Term Deposit funds will have no interest adjustment up until the release of funds from the term and no break costs.</li>
<li>CUA does not charge account keeping fees on deposit products.</li>
</ul>
Support for members with personal loans or credit cards
<ul>
<li>We will waive late fees for personal loan repayments. Other assistance options may also be available for members on request.</li>
<li>Repayment relief for credit cards is available on a case by case basis, with no fees for replacement cards.</li>
</ul>
Support for members with CUA Health insurance
<ul>
<li>CUA Health policy-holders experiencing financial difficulty or a loss of income as a result of COVID-19 can suspend your policy and premium payments for three months by phoning CUA Health on 1300 499 260. If you require hospital treatment during the period of the suspension, you should contact CUA Health and we will work with you to reactivate your policy.</li>
<li>For the duration of the COVID-19 pandemic, CUA Health will cover members for all in-hospital COVID-19 treatment irrespective of their level of hospital cover, provided they have held the CUA Health hospital policy for at least two months.</li>
</ul>
Support for small business 
<ul>
<li>
Repayment relief for small business members: You can defer your business loan repayments for up to six months if you are experiencing financial difficulty as a result of COVID-19. We can also extend your loan term by the same length of time to ease the pressure and minimise the increase to your repayments when you start to make them again. To apply online in just a few minutes, visit <a href="http://icm-tracking.meltwater.com/link.php?DynEngagement=true&amp;H=btYXC68syxmDVppbhVzFoYHdeMNV9070xvOlf%2FNdDQ0wXj6aidRhm9xCjWNfzPTg3iNx%2FAa4t%2FTEuHrerhKoECpU73Uhf2D7UXSRJLKb9%2Bb%2FnLrGlLndcbkj4%2BJM8eXB%2BpdQDlKXnbMabjBkCEhF%2BQ%3D%3D&amp;G=0&amp;R=http%3A%2F%2Fwww.cua.com.au%2Ftools-and-services%2Fsupport%2Ffinancial-assistance&amp;I=20200325063441.00000f0d4a3e%40mail6-114-ussnn1&amp;X=MHwxMDQ2NzU4OjVlN2FmYWY3NjM2MGYwMTA5ZDY4MjM1ODs%3D&amp;S=7kEPwJLrkY3wBsvKkVWshe_rbbzJuoZPg6e0t3FsuE8">www.cua.com.au</a>
</li>
<li>We’re reducing secured overdraft rates by 2.00 per cent p.a. for small business members.</li>
<li>We’re reducing variable rates on term loans for existing small business members from Wednesday 8 April 2020:
<ul>
<li>We’re reducing the rate for term loans with residential security to a new variable rate of 4.39 per cent p.a.</li>
<li>We’re reducing the rate for term loans with commercial security to a new variable rate of 4.89 per cent p.a.</li>
</ul>
</li>
</ul>
CUA will continue to keep members updated on services, and the support available, at <a href="http://icm-tracking.meltwater.com/link.php?DynEngagement=true&amp;H=btYXC68syxmDVppbhVzFoYHdeMNV9070xvOlf%2FNdDQ0wXj6aidRhm9xCjWNfzPTg3iNx%2FAa4t%2FTEuHrerhKoECpU73Uhf2D7UXSRJLKb9%2Bb%2FnLrGlLndcbkj4%2BJM8eXB%2BpdQDlKXnbMabjBkCEhF%2BQ%3D%3D&amp;G=0&amp;R=http%3A%2F%2Fwww.cua.com.au%2Fcoronavirus-info&amp;I=20200325063441.00000f0d4a3e%40mail6-114-ussnn1&amp;X=MHwxMDQ2NzU4OjVlN2FmYWY3NjM2MGYwMTA5ZDY4MjM1ODs%3D&amp;S=6FWcqdHa8AsSpwqMFSH7DdxfFvTl3U-W8vLjSpHtal0" target="_blank">www.cua.com.au/coronavirus-info</a>
* Comparison rate calculated on a $150,000 loan over 25 years based on monthly repayments. WARNING: Comparison rate true only for example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in different comparison rate.
1. If members choose to defer their loan repayments, they will continue to incur interest which will be added to the outstanding loan amount. When the repayments resume, they will be higher, to ensure the outstanding balance is paid over the remaining term of the loan.
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j.ballantyne1990-6AQqhLzZaK

CUA unveils Financial Assistance Package to support members impacted by COVID-19

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Australia’s largest credit union, CUA, announced that it has raised $700 million in wholesale funding from its latest securitisation.
The follows just six weeks after a successful Medium Term Note issuance for the member owned organisation.
CUA Deputy Treasurer Tim Moore said that they had committed to going to the investor market with these kind of Residential Mortgage Backed Security (RMBS) deals at least once per year. CUA’s last RMBS deal in June 2017 raised $900 million in funding.
Mr Moore said the Series 2018-1 Harvey Trust RMBS had attracted a good mixture of domestic and offshore investor interest, particularly from the UK and Australian Capital Cities.
“CUA has demonstrated strong financial performance over the past year, including strong home loan growth through both mortgage brokers and organic channels, and the performance of our home loan portfolio has a solid track record," he said.
Mr Moore concluded, “the funding raised from this RMBS deal will help support the strong lending growth we have seen over the past 6 months, and which has continued into the residential property market’s peak spring season."
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CUA raises $700 million in latest round of wholesale funding

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Australia’s largest credit union, CUA, will continue to grow its investment in innovation to improve member experience and choice of digital channels, after today announcing a solid first-half financial result. 
CUA Group posted a consolidated Cash Profit of $35.31 million for 1H-FY18, and Net Profit after Tax (NPAT) of $28.76 million. 
CUA chief executive officer Rob Goudswaard said the result reflected that CUA was delivering on its ‘anytime, anywhere’ digital strategy through an increased investment in innovation and digital activation during the six-month period. 
While profit was down slightly on the prior first half, this was largely due to upfront costs in joining international banking collaboration, Pivotus Ventures, on 1 July 2017 and a pilot of the first initiative to come out of the Silicon Valley based innovation studios. 
“As a member-owned organisation, CUA’s profits are reinvested into our business and we are always looking for opportunities to invest that into initiatives and projects which benefit members and support them through different stages of their lives,” he said. 
Focus on innovation 
Goudswaard said the significant investment CUA had made in innovation by joining global banking innovation collaboration Pivotus Ventures has supplemented CUA’s continued involvement with the Australian fintech and start-up communities.
“The Pivotus collaboration has allowed us to tap into international banking expertise. We’ve already rolled out a pilot of the first innovation, the iM CUA instant messaging app, much faster than we would have been able to develop this kind of innovation on our own,” he said. 
While it’s early days, CUA is already seeing positive outcomes on the pilot, with close to 2,000 registered users on the iM CUA app who are benefitting from the convenience of having their own personal banking adviser. The success of the app has been reflected in positive Net Promoter Scores. 
“We’re also working closely with Australian-based fintechs, which has seen us announce new collaborations in the past few months with online mortgage lending platform LoanDolphin and an artificial intelligence pilot with Flamingo AI and CUA Health. And we are working with domestic partners to leverage new technologies, like Australia Post’s new online identity verification service, Digital iDTM, which is assisting members to quickly open an account online without the need to visit a branch,” Mr Goudswaard said. 
“In addition to what we’ve already delivered, CUA members will continue to benefit from other new innovation and digital offerings in the second half of FY18. That will include a new mobile banking app, the ability to register a PayID and make faster payments using the New Payments Platform following the rollout to CUA members this week, and the expanded rollout of iM CUA to members with both iPhones and Android devices.” 
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CUA half-year financial performance highlights innovation focus

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CUA has today launched a new variable rate home loan product.   Australia’s largest credit union CUA is offering the new Advance Variable Home Loan with a competitive interest rate of 3.74% p.a (comparison rate 3.75% p.a.) for eligible new to CUA owner-occupier loans paying principal and interest repayments.
Higher rates will apply for owner-occupier interest-only loans and loans with a construction purpose.   Advance will give borrowers access to features including the flexibility to make unlimited additional repayments without penalty, free redraw of payments in advance, a mortgage offset feature (capped at $50,000) and no upfront loan establishment fee, annual or ongoing account keeping fees.
Advance is available for borrowers taking out a loan of at least $100,000, Australian Broker noted.   CUA head of product and marketing Susan Mason said that Advance is a good move for buyers looking to purchase a home to live in or for borrowers looking to bring their owneroccupier home loan to CUA for a better deal.     “We know that for many of our borrowers, having the flexibility of features like redraw and an offset account are important to managing their budget at different times in their life.
"But for many borrowers, they often compromise on these features in the hunt for a really competitive rate,” Mason said.   “Spring is traditionally a busy time for the market, with more properties for sale and more buyers shopping around."
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CUA credit union unveils 3.74% interest rate

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Australia's largest mutual bank CUA has decided to pause writing new loans for property investors in the wake of increasing demand as banks put the brakes on investor lending to meet regulatory limits.
CUA said on its website that the lender will temporarily pause accepting investor lending applications until further notice, including refinancing from other financial institutions in the wake of a sharp increase in investor lending volumes in recent weeks.
The bank wanted to stay within the 10 percent investor lending growth cap set by APRA, said chief operating officer, Member Services, Andy Rigg.
“We have been closely monitoring our year-on-year investor lending balance growth to ensure that we continue to lend prudently while remaining within the 10% regulatory growth benchmark,” he said.
“We have observed an increase in new investor applications, particularly in response to some of the actions taken by other lenders to slow their investor growth.”
“In response to the continued growth in our investor lending and forward projections of this growth, we’ve taken the decision that we need to temporarily pause new investor lending,” he added.
Large numbers of borrowers are flocking to smaller lenders who are at risk of being overwhelmed, with concerns being voiced by <a href="https://www.urban.com.au/expert-insights/finance/67845-mortgage-pricing-competition-might-hurt-challenger-banks" target="_blank">Bendigo and Adelaide Bank managing director Mike Hirst </a>too, who said rates needed to return to levels that "reflect the current market funding and capital costs”.
"As has been well telegraphed to all Australian authorised deposit-taking institutions, there is an expectation that as lenders, we must manage within the regulator's 10 per cent growth speed limit for investor loans,” Hirst was cited as saying by Fairfax Media.
The Australian Prudential Regulatory Authority came up with new <a href="https://www.urban.com.au/expert-insights/finance/68067-apra-tightens-interest-only-lending-rules" target="_blank">guidelines for interest-only loans</a> as well as other rules to cool the property market. The new rules require banks to cap future interest-only lending as a proportion of residential mortgages at 30 percent in addition to the reminder on staying below the 10 percent growth cap for investor loans set by it previously.
CUA has 440,000 customers, 900 staff and an $11 billion loan book. At the interim results in early March it revealed that it had written $1.06 billion in property loans, which was lower than the previous corresponding period, Fairfax Media reported.
Other lenders including BankWest and ING Direct responded to the new caps on Monday by lifting rates on loans to investors.
BankWest, a subsidiary of Commonwealth Bank, lifted rates the standard variable rate for investors by 25 basis points to 6.07 percent.
 
 
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jonathanchancellor-7SQnKwU6yx

CUA pauses loans to property investors to stay below APRA's 10 percent cap

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Australian credit union CUA has announced a half-year Group Net Profit after Tax (NPAT) of $31.11 million, up 10.9 percent on its previous first-half result.
The result was underpinned by continued member growth, an increase in net interest income and a positive result for subsidiary CUA Health.
CUA Chief Executive Officer Rob Goudswaard said the result reflected the benefits of CUA operating a diversified business in challenging market conditions.
He said the CUA Group result had been boosted by the performance of CUA Health, which contributed NPAT of $3.37 million for 1H.
This helped to offset a slightly weaker result for the banking business (ADI), which was impacted by aggressive market competition over the period and continued pressure on margins.
CUA issued $1.17 billion in new loans for the six months to 31 December 2016. While owner occupier and investor home loans accounted for around $1.06 billion of the new lending, CUA ’s personal loan performance was a standout with $106.4 million of personal loans issued over the period – a 30 per cent increase on personal loans issued over the corresponding period in FY16.
In particular, CUA ’s personal loan sales through the website and web-assisted channels were up 55 per cent on a year ago.
Mr Goudswaard said this came off the back of CUA significantly enhancing its digital marketing and sales capability, producing a 182 per cent year-on-year increase in digital leads.
Mr Goudswaard said net interest income of $118.6 million w as up 4.3 per cent on the same time a year earlier, reflecting higher interest revenue from strong lending in previous periods.
CUA had held its net interest margin steady against the same period last year, in what was a competitive and challenging external environment.
Capital adequacy, return on assets (ROA) and return on equity (ROE) declined slightly against the previous corresponding period.
However, 1H saw an improvement in CUA ’s cost to income ratio to 68.2 per cent (downfrom69.5 per cent in 1H-FY16).
This reflected CUA’s focus on balancing the slowdown in lending activity with prudent cost management, ensuring CUA can continue investing in future member improvements.
CUA ’s banking business (or ADI) posted a first-half NPAT of $29.69 million, down 3.8 per cent on the previous corresponding period.
The ADI result was impacted by lower volumes of new lending for the period in challenging market conditions, which included aggressive price-led competition across the market in the first few months of 1H.
However, CUA expects to see a return to stronger lending and asset growth in the second half.
CUA has continued to invest in the growth of its wholly-owned private health insurance subsidiary, with CUA one of the few organisations in Australia to offer integrated financial, health and insurance solutions.
The highlight for the fund during the period was the launch of a new suite of hospital and extras cover in November, which provides greater choice and flexibility for members based on their individual needs and budgets.
CUA Health posted a first-half NPAT of $3.37 million. CUA Health premium revenue for the six months was $72.1 million, while the insurer returned $61.9 million in benefits to policy holders.
Over the past year, policy holders received around 88 cents in the dollar in benefits, higher than the industry average of 86 cents.
Credicorp Insurance posted a half-year NPA T of $0.577 million, an increase of 20 per cent compared to the FY16 first-half result.
This subsidiary now provides general insurance to more than 13,500 members.
Credicorp’s growth during the period is a result of the maturing of its new product suite and continued effective cost management.
Mr Goudswaard said CUA had seen an increase in new lending and sales in recent months, which should contribute to a positive second-half financial performance.
However he noted that CUA expected pressure on margins to continue for the remainder of FY17, given the current low interest rate environment and strong competition in both the home loans market and in attracting member deposits.
Financial performance in 2H would depend on careful management of margins and costs, as well as any interest rate movements throughout the period.
He said CUA had a number of priorities for 2017, including exploring further opportunities to collaborate with other mutuals and leverage their collective strength, following the formation of a new joint venture company, Mutual Marketplace, with People’s Choice Credit Union.
Mutual Marketplace will commence operations in April to provide procurement and accounts payable services to both organisations.
Mr Goudswaard said there would be a continued focus on CUA building its brand awareness in the marketplace, off the back of the high visibility gained through its three-year partnership with Queensland Cricket, including the Brisbane Heat BBL and WBBL teams.
CUA will also look to deepen member relationships and attract more new members, particularly through CUA’s competitive position as an early adopter status on digital wallets and payments technologies (ApplePay, AndroidPay and New Payments Platform).
“Today’s half-year result is a positive outcome for members, who are already seeing the benefits of our continuing investment in digital channels and member-facing improvements,” he said.
“CUA has rolled out Android Pay and ApplePay to our members, and we are one of only two financial institutions in Australia offering ApplePay for Master cardholders.
We’ve introduced the ability for people to open an Everyday transaction account and become a CUA member online in just minutes, making it easier than ever before to switch to CUA.
“We’re currently redesigning our mobile banking app, ahead of a launch later this year.
And we are committed to being one of the first financial institutions in Australia to deliver members the benefit of real-time payments using the New Payments Platform when it launches towards the end of 2017.
“We’re working on ways to make sure all our members are on the digital journey with CUA and are realising the benefits of CUA ’s move towards being available anywhere, anytime.
The number of members using mobile banking has increased by 22 per cent compared to a year ago, with more than 105,000 members logging in each month.
Across both mobile and online banking, we have over 175,000 active users.”
Mr Goudswaard said that as a member-owned organisation, CUA is also committed to giving back to its communities through social initiatives.
“We have significantly scaled up our volunteering activities, with our team devoting around 200 days to volunteering in the community during the past six months, significantly more than a year earlier.
“We awarded a total of $10,000 to community groups in Toowoomba in December, presented more than $70,000 to local schools in October-November, and we will shortly launch a reinvigorated new local community grants program through CUA branches.”
On the regulatory front, Mr Goudswaard said CUA will continue working with government and industry stakeholders to secure a competitive financial services landscape to benefit consumers.
“CUA is working with other mutuals and the Business Council of Cooperatives and Mutuals to further advance the case for government and regulators to consider additional capital raising options for mutuals.
Currently, mutuals like CUA are constrained in our ability to raise capital, particularly Tier 1 capital.
In the absence of this capital framework, we will also continue consulting with regulators and our members around a change to our Constitution that would enable CUA to raise capital in the future, so CUA can take advantage of any emerging opportunities.”
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