People's Choice Credit Union offset a ten basis point drop in its margin with strong growth in its home loan book to record a 40.1 per cent increase in net profit for the year to June.People's Choice, Australia's second largest credit union, increased mortgage balances by ten per cent and total member loans by 8.6 per cent to A$6.4 billion.Retail deposits were up ten per cent to $4.9 billion.This growth allowed it to offset the impact of lower rates, which pushed its net interest margin down ten basis points to 2.33 per cent.Net profit was $35.9 million - up from 25.7 million in 2014/15.People's Choice chief executive Steve Laidlaw said half the growth in mortgage lending was in Victoria and the Northern Territory, outside the mutual's South Australian base.Laidlaw said: "We have invested in those markets and we have built brand awareness. It is paying off."He said People's Choice has also become better at member retention, using analytics to understand member behaviour and identify triggers that might mean a member was at risk of leaving.People's Choice signed up 23,457 new members, with net member growth of 4633.One area of weakness was in personal lending, where balances were down one per cent. Laidlaw said People's Choice did not compete effectively in a very competitive market for car finance.People's Choice will use its strong growth in earnings to invest in customer services.Laidlaw said the mutual was working on a range of things. It launched a new internet banking site during the year, with a range of new functions including international money transfers, the ability to order foreign currency online and a more responsive design for various form factors.Other functions under development include the ability to turn off and on services, such as contactless payments and foreign purchases. Members will be able to change their PINs online, deactivate and report lost cards, and activate new cards.People's Choice launched Android Pay earlier in the year. Laidlaw said the response has been positive and there have been a few thousand transactions.