As we have many clients with CUA here in Mandurah this article in The Australian Broker 4/11/15 was of great interest to us at Smartline.  Particulary the last paragraph that explains why their rates are less and how safe they are as a bank.

NOTE (A Mutual Bank, or customer-owned bank, is a credit union or building society that has gone through the process needed to use the word ′bank′ in its trading name.)

As variable interest rates are on the rise, leading mutual lender, CUA has announced it will be reducing variable rates for owner occupiers.

Effective 24 November, CUA is applying a 14 basis point cut to its Fresh Start basic variable home loan for owner occupiers, to a new rate of 3.99%.

The mutual lender’s three-year fixed rate for owner occupiers will also fall by 16 basis points to 4.09%.

“The rate cuts to some of our basic home loans are good news for owner occupier borrowers. As a customer-owned business, we need to balance good value and competitive interest rates for customers today, with the need to be sustainable over the long-term,”CUA chief executive officer Rob Goudswaard said.

“It’s important for CUA to remain profitable so we can generate earnings that can be invested back into the business. That way, we can keep lending to more customers and provide even better products and services to customers.”

However, Goudswaard confirmed that some other variable home loan rates would rise as of 24 November.CUA’s other variable home loan interest rates, excluding the Rate Breaker package rate, will rise by 13 basis points for owner occupiers, and 19 basis points for investors.

But Goudswaard said the new standard variable rate for owner-occupiers of 5.06% will still be 0.55% lower than the average of the majors’ new standard variable rates, once all new rates have taken effect later this month.

He said CUA’s investor rate needed to move in line with the market, to ensure CUA could continue to manage its investor lending growth.

He also noted that as a mutual, CUA’s costs reflect that it holds much higher levels of capital than the majors are being required to hold. CUA’s Return on Equity (ROE) in FY15 was 6.2%, compared to an average of around 15% for the majors.