responsible investment of customer deposits
bankmecu recognises the need to invest customers' money responsibly. As at 30 June 2011, approximately 94% of all customer deposits were lent to other customers.
The remaining 6% of customer deposits and accumulated cash reserves were predominantly invested across a range of cash securities - Term Deposits, Bank Bills and Negotiable Certificates of Deposit. bankmecu holds shares in its subsidiary companies and is a shareholder in its two major service suppliers - Cuscal (a provider of wholesale and transactional banking services) and Data Action (a supplier of core banking and data network facilities).
A small proportion of bankmecu's accumulated cash reserves are invested in other credit unions' subordinated debt, other financial institution shares, in Australian residential mortgage-backed securities and Bank floating rate notes.
bankmecu’s lending activity is divided into four key areas: home and investment; personal; revolving credit; and commercial.
Figure 7a: Breakdown of lending activity
|
|
2010/11
|
2009/10
|
2008/09
|
2007/08
|
2006/7
|
2005/6
|
|
Home and investment
|
88.53%
|
88.70%
|
87.42%
|
87.8%
|
86.8%
|
86%
|
|
Personal loans
|
2.00%
|
2.80%
|
2.92%
|
3.6%
|
4.5%
|
5%
|
|
Revolving credit
|
2.74%
|
3.00%
|
4.16%
|
4.3%
|
5.0%
|
6%
|
|
Commercial lending
|
6.73%
|
5.50%
|
5.50%
|
4.3%
|
3.7%
|
3%
|
bankmecu's investment activity remains strongly focused on providing home and residential investment loans to its customers. Commercial lending has increased over the past 12 months into core strategic socially entrepreneurial areas such as education and affordable housing. Personal loans and continuing credit facilities continue to contract as a percentage of the total portfolio.