People’s Choice cements growth record

2017/18 financial highlights

• Net profit after tax of $32.2 million.
• Comparative net profit after tax up 14.3% to $37.8 million.
• Loan balances increased by 6.0% to $7.3 billion.
• Member deposits increased by 6.9% to $5.8 billion.
• Financial planning funds under advice increased by 10.1% to $1.8 billion.
• Total assets under management and advice increased by 5.4% to $10.5 billion.
• Strong member growth continued, with 21,053 new members joining and
  net member growth of 9,323 members.
  
  

People’s Choice Credit Union has recorded strong growth during a time of fierce competition to cement its place as one of Australia’s leading alternatives to the major banks.

Australia’s second-largest credit union has announced strong financial results for 2017/18 based on its success in residential lending, with People’s Choice recently recognised by Canstar as the best customer-owned lender for first homebuyers in Victoria, South Australia and the Northern Territory for the second year running.

Whilst net profit after tax declined by 2.8% to $32.161 million, comparative net profit after tax rose by 14.3% to $37.811 million when adjusted for the write down of ATM assets and related impacts of industry-wide changes to non-member ATM transaction charges.

Pleasing loan and retail deposit growth and careful management of costs provides People’s Choice with a strong future for its members built on competitive products and market-leading customer experience – all vital in delivering its member-centric focus. It also provides the foundations upon which to continue the organisation’s investment in technology – which this year saw People’s Choice as one of the few financial institutions to offer full functionality of the New Payments Platform – and an expanded Victorian presence to underpin its successful growth strategy.

Member lending continued to lift despite increasing competition. Total loans and advances rose more than 6% to $7.3 billion for the year, led by a 6.9% lift in residential lending to $6.7 billion. People’s Choice’s ability to offer market-leading personal loans was recognised during the year by being named Money magazine’s Personal Lender of the Year.

People’s Choice’s Financial Planning consolidated its position with a 10.1% lift in funds under management to $1.87 billion, taking the organisation’s total assets under management and advice to $10.5 billion.

People’s Choice Chief Executive Officer Steve Laidlaw said the results, coupled with repeated independent recognition of the credit union’s commitment to its members, showed early signs of success for its strategy and focus on improving member experience.

“Our aim is to generate sufficient profits to invest in the future of People’s Choice while offering competitive products that stand out in a crowded market and delivering the best service for our members. This year we have had our products and people recognised as leaders in their field, funded major investments in future growth, and welcomed a near-record number of new members across the country,” Mr Laidlaw said.

“As a member-owned financial institution, our sole purpose is to act in the best interests of our members for the long-term, rather than maximising dividends for shareholders like the major banks. Our 2017/18 financial results show that the model works and can deliver long-term sustainability for our members, year after year,” he said.

A case for measured reform in the financial services sector

Mr Laidlaw said there was an understandable call for reforms to address failures highlighted among the major banks – but also a need to appreciate how those reforms would affect those institutions doing the right thing.

“The Productivity Commission has already pointed out that regulatory pronouncements have often strengthened the position of the bigger players and their state-based brands to the detriment of consumers,” he said.

“That can’t be allowed to happen again. Institutions like People’s Choice shouldn’t have to pay for the sins of others. Reforms need to be proportionate and targeted with a view to understanding how they are likely to play out across the sector, not just for the majors. That will be Parliament’s challenge, and one we look forward to discussing,” he said.

The extent to which members trust and recommend People’s Choice continues to be among the best in the industry. People’s Choice recorded an average net promoter score of +44 points – calculated by regularly surveying members to establish whether they are promoters (loyal, enthusiastic fans), detractors (unhappy) or passives (satisfied, for now). This is the second highest score nationally of the financial institutions People’s Choice tracks including the major banks and compares favourably to the +8 points average score recorded across those organisations.

People’s Choice’s commitment to its members was also recognised with Mozo awards for being highly trusted, excellent customer service, staff friendliness and outstanding customer satisfaction. People’s Choice was also named Building Society/Credit Union of the Year in the Roy Morgan Customer Satisfaction Awards for the third time.

Other highlights from the 2017/18 financial year included:

• The results of the 2018 Values and Engagement Survey which place People’s Choice among the top employers, with 88% staff engagement and 90% of staff agreeing the credit union is living up to its values.
• A contribution of 2.7% of pre-tax profit to corporate community investment, 4.5 times the 0.61% average contribution made by major Australian and New Zealand companies (source: LBG Australia). Including funds raised through the Community Lottery and other programs, People’s Choice generated almost $3 million for the community during the year and made a difference to close to one million Australians.
• The implementation and alignment of key targets of the Strategic Plan 2017-2022 throughout People’s Choice.
• Early success of the Fast & Easy personal loans strategy, which involved a thorough redesign of all elements of personal lending that now combines market-leading rates with the ability to email contracts, electronically disburse funds and provide mobile applications.
• The successful completion of a seventh securitisation program which raised $500 million.

* Adjusted for the write down of ATM assets and related impacts.

Media enquiries

Russell Emmerson | Public Affairs Manager | People's Choice Credit Union

t: 08 8165 8847 | m: 0422 46 3333 | e: remmerson@peopleschoicecu.com.au