AWA breaks Alcoa bonds

One more small credit union merger is moving through the system. AWA Credit Union will take over Geelong and District Credit Cooperative, the fourth smallest of the sector.

If AWA wants to it might put to work the community bond of the Geelong credit co-op alongside the industrial bond that at present ties the credit union to Alcoa workers and their families.

Formerly the Point Henry Credit Co-operative, set up in Geelong in 1969, the credit union is now known as AWA. It branched out to Portland in 1990 and Mandurah in 2004, in each case still serving Alcoa employees.

The credit union has also stretched the bond to cover contractors to Alcoa.

The 'WA' in the AWA name is a conscious effort to present a brand that will appeal to the target employee base, which lives in the well-salaried boroughs to the south of Perth.

AWA has assets under management of A$110 million. It stepped up its lending by a grand $13 million over the last year, a growth in the book of one third. Most of the new business AWA sourced was in Victoria rather than in the west.

The credit union treats securitised loans as off balance sheet, an approach preferred by some small deposit takers. AWA said the sale in 2010 of $8 million in loans "satisfies the de-recognition criteria" in the account standards.

Impaired loans for AWA increased to $22 million in 2010 from $4 million in 2009, with most of the increase classed as impaired for less than 30 days as at June 2010.