Australia's largest credit union, CUA, has increased its investment in innovation and digitisation while declaring a solid first-half financial result for the 2017/18 year.CUA Group announced a net profit after tax of A$28.8 million, a drop of 7.5 per cent compared to the prior year's first-half result. Likewise, the consolidated cash profit of $35.3 million for the half was down 4.9 per cent on the 2017 first-half result. Consolidated net assets declined by 2.4 per cent to $13.42 billion.Rob Goudswaard, CUA chief executive officer, said the decrease in profit on last year's first half result was largely due to upfront costs in joining Pivotus Ventures, an international banking collaboration in Silicon Valley, on 1 July 2017, and CUA's continued involvement with Australian fintech and start-up communities in Brisbane and Sydney. Consequently, CUA's new digital offerings in the second half of FY18 will include a new mobile banking app, the ability to register a PayID and make faster payments using the New Payments Platform, and the expanded rollout of a banking adviser app, iM CUA, to members with both iPhones and Android devices. While these moves may have positive impacts at the margins, CUA's lending volumes over the first half of the financial year were, inevitably, more directly affected by a very competitive owner-occupier lending market, which fuelled a high level of refinancing activity across the sector. The "pause on investor lending", from March 2017 to ensure CUA stayed within APRA's benchmarks, also impacted earnings. Loans being refinanced from CUA to other lenders in July 2017 were 33 per cent higher than the same time a year earlier - that is the rate of churn ramped up, often with investors taking their home loan across to the new lender as well.Despite these pressures, deposit growth of three per cent was in line with system growth, and CUA's home lending picked up in the final few months of the half, with $1.28 billion in loans issued, up 9.1 per cent on PCP. CUA gained over 8,000 new banking members, taking its total membership numbers past 460,000.Net interest income was also 6.3 per cent higher, at $126.2 million, although CUA's net interest margin declined to 1.79 (previous comparable period NIM was 1.81), "as we had to reduce our asset yields - our home loan rates - to stay in the market," said Goudswaard.CUA also continued to see strong growth in the volume of another of its core businesses, with "an uplift" of 13.8 per cent over pcp for new personal loans of $121.1 million.This expansion came at a cost, though, with bad and doubtful debt on the rise - while remaining at 50 per cent of the industry average: "Our impairment charges for 1H-FY18 were $4.53 million (up from $2.52 million for the same time last year) - but this is still low by industry standards," Goudswaard said."[In addition] a total of $4.39 million in bad debts were written off for the first half of 2018, up from $2.35 million in 1H17."Mortgage loan