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Connexus : Issue 38
“ The most pleasing aspect is that despite a strong focus on merger related activities throughout the year, we were still able to deliver strong business results.” www.abacus.org.au www.abacus.org.au 14 Connexus 14 NEWS Australia’s second-largest credit union, People’s Choice, has recorded an after tax profit of $33 million for the 2010-11 financial year. Formed through the merger of Australian Central and Savings & Loans, the recently named People’s Choice Credit Union experienced a strong year in testing conditions, with key figures including: • total assets under management (including loan portfolios under advice) increasing by $100 million to $6.7 billion • retail deposits increasing by $180 million to $3.4 billion • loan balances remaining steady at $5.6 billion The results are the first for a full year as a combined credit union, and compare favourably with last year’s $23 million profit in which it operated for part of the year as separate organisations. People’s Choice Credit Union managing director Peter Evers says the result highlights the enormous opportunities the merger has created. “The results are extremely pleasing given the volatile environment we’ve been operating in,” he says. “One of major reasons for merging was that through our increased size and strength we could unlock new opportunities, and although it’s only early days, these results support our assessment. “It’s been a big year for the credit union with the integration of the two credit unions’ technology systems, the opening of a range of new modern and innovative branches and the approval and introduction of our new name. “The most pleasing aspect is that despite a strong focus on merger related activities throughout the year, we were still able to deliver strong business results.” Evers says People’s Choice has plans to open new branches and introduce a range of enhanced products. “ We are proud to be a member- owned alternative and believe that our money should be always and exclusively managed to serve our members and the community,” he says. “For us, it’s about making sufficient profit to meet our prudential obligations and remain financially sound, as well as being able to invest into the business for the long-term. These results provide a strong grounding for us as a new organisation and we’re well placed moving into the future.” – Peter Evers, managing director, People’s Choice Credit Union The trend towards saving more has been reflected in a recent survey of mortgage holders in which more than 80 per cent of people with home loans said they had saved in the last year. One quarter of the 1,009 mortgage holders surveyed over late August and early September managed to put aside more than 20 per cent of their after- tax income. The 2011 Saving & Spending Insights Survey commissioned by mortgage broker Mortgage Choice found that the main reason to save was for a holiday (53 per cent) although 45 per cent also planned to repay their mortgage more quickly. Other key findings include: • 44 per cent were paying more than 30 per cent of the total after-tax household income on their home loan • 34 per cent did not know their interest rate • 47 per cent factor in an interest rate buffer of 1 per cent or more into repayments • 26 per cent said they had taken on significant debt in the past year • If interest rates fall in the coming months, 36 per cent said they will be more likely to explore refinancing. 41 per cent won’t because they are content with their current interest rate, 9 per cent are in a fixed rate loan and don’t want to break it and 14 per cent simply can’t be bothered looking into it. Those most interested in refinancing if rates fall were next homeowners (67 per cent), followed by first homebuyers (65 per cent), homeowners/investors (61 per cent) and investors (53 per cent). Saving and spending Record earnings for new credit union