CUA tells of close relationship with key distributor

At a media luncheon in Sydney, Mortgage Choice outgoing chief executive Michael Russell revealed that CUA had gone from representing one to two per cent of the group’s mortgage flows to 10 per cent in the past six months.

CUA general manager, products and marketing, Jason Murray told Mortgage Business that the lender’s relationship with Mortgage Choice goes back a long way.

“I think we have had the relationship for over a decade,” Mr Murray said. “We were a bit quiet during the GFC with them, but we have re-established that relationship over the last three years.

“The key driver of that growth over the last six months has been some new products that we have been able to put out there as a consequence of completing our core system replacement.”

One of those products is CUA’s Fresh Start home loan, with the headline variable rate of 4.65 per cent.

A significant portion of the product’s volumes are coming through the broker channel, Mr Murray confirmed.

“Mortgage Choice is our primary partner and has obviously been a very important part of our growth for a long time and a very important channel and a growing important channel,” he said.

“We think we should at least be representing and reflecting the Australian market and if 50 per cent of customers are accessing the broker network we should be trying to represent that kind of mix as well.”

Smaller lenders like CUA have been leading the market with the lowest home loan rates on record, despite not sharing the significant funding advantages that the major banks enjoy.

However, Mr Murray said that CUA has equally seen substantial growth in its deposit base, which has helped avoid pressure on its net interest margin.

“We have to keep a very tight focus on our margins because obviously our cost of funds are a very important part of maintaining a margin, which is required in order to be sustainable into the future,” he said.

“I wouldn’t say it puts us under pressure [being competitive]; we are a customer-owned organisation and have always had a focus on the growth of our organic deposit base.

“We have never really had a funding problem on that basis,” he said.

CUA has launched two new deposit products over the last six months, with Mr Murray claiming the take-up has been above expectations.

“It’s a nice balance to have,” he said.