Healthy earnings for People’s Choice

Australia’s second-largest credit union, People’s Choice, has recorded an after tax profit of $22.2 million for the 2011-12 financial year.

"It’s a very solid result given we’re operating in challenging market conditions, so we’re extremely pleased," said Managing Director Peter Evers.

"As a credit union, we don’t chase massive profits like banks do - we focus on looking after our members. This is highlighted by significant fee reductions we’ve introduced in the last 12 months, which impact on our bottom line but are beneficial for our membership."

The reporting period was just the second full financial year for People’s Choice as a new entity and market conditions were testing with low consumer confidence dampening demand for new loans.

"I’m proud to say that, as a team, we’ve adapted well to the current environment and we’re moving forward with many new initiatives that ensure a very bright future for the organisation."

During 2011-12 People’s Choice Credit Union took a number of significant decisions which will provide long-term benefits and support the organisation’s commitment to national growth.

• Launching the new People’s Choice brand, which has quickly gained traction in the marketplace.
• Obtaining a BBB+ corporate credit rating with a ‘Stable’ outlook from Standard & Poor’s credit ratings agency, enhancing access to wholesale funding markets.
• Acquiring an additional eight branches - six in Melbourne and two in Canberra - from ME Bank.

During 2011-12, a total of 18,570 new members joined People’s Choice with membership now sitting at 360,578.

According to Mr Evers, the outlook for 2012-13 is for another challenging year with soft property market conditions continuing and credit growth remaining flat.

"We’re expecting a very competitive sales environment in the coming 12 months with continued low demand for property ensuring housing finance providers will be vying for the available business to maintain or increase market share," he said.

"Conditions in wholesale markets will remain tight and mixed with competition for retail deposits and further RBA cash rate reductions, it will continue to add pressure to interest margins.

"There is some underlying strength in the Australian economy but the continuing uncertainty in Europe, moderation in growth in China and ongoing low consumer confidence as a result of domestic issues will ensure an extremely challenging operating environment."

People’s Choice was formed through the merger of Australian Central and Savings & Loans credit unions, and the 2011-12 financial year saw the last of the major unification activities completed with the launch of the People’s Choice brand.

"The decision to create People’s Choice has certainly proved to be the right decision. We’re a very strong and healthy credit union, we’re growing steadily and there are many opportunities ahead of us," Mr Evers said.

"As a member-owned organisation we will always put people before profits.

"We remain completely focused on delivering better banking products and better customer service to our members, and being the employer of choice for staff."

Media Contact:

Marcus La Forgia – 0421 585 740