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Growth puts society in $1b club

POLICE & Nurses Credit Society chief executive officer Fred Huis has a whiteboard in his office with $1,000,000,000 written on it.

The figure represents a major milestone for WA’s biggest credit union and the realisation of a goal.

“Only a few days ago we exceeded a billion dollars under management,” Mr Huis said.

The credit union is a very different organisation to that launched as the Police Union in the late 1960s.

The 1990 merger with the Nurses Credit Union and, more recently that with the Energy Union, delivered considerable growth for the company. The strategy is to continue expanding the operation.

“There will be more and more growth,” Mr Huis said. “Our organisation is growing very rapidly.

“When I first joined we had 18 staff and assets worth about $20 million.”

But the growth strategy isn’t purely focused on mergers, which are costly in terms of blending corporate cultures.

“Growth will be based on both acquisitions and organic growth, but there’s a cost to merger and a cost to growing an organisation,” Mr Huis said.

“In mergers you have to mix two different cultures, they’re not the panacea. Organic growth is much easier but the staff still have to deal with it.”

Despite Police & Nurses Credit Society’s considerable growth, its size doesn’t compare with the major banks. However, a smaller organisation is a more flexible organisation, Mr Huis said.

This flexibility is a key quality that Police & Nurses Credit Society wants to communicate to the market alongside good service, low fees and a mutual structure.

To compete and survive, Police & Nurses Credit Society has to differentiate itself from the traditional financial providers, Mr Huis said.

“The fundamental difference (in comparison with the banks) is that we have customers and share-holders, like the bank, but they are one in the same person,” he said.

Police & Nurses Credit Society has recently reduced its fees by 10 per cent and there are plans to reduce them by a further 10 per cent in the future.

“We don’t want a structure that is reliant on fees,” Mr Huis said.

“We’ve got to look at reducing them slowly over time … with more competition in the market we’ve got to compete with lower fees.”

Service has to back up lower fees, without members we won’t exist, so we have to make sure we serve people well, he said.

Police & Nurses Credit Society is attracting about 1,000 new members every month.

About 10 per cent of that figure is leaving the organisation every month but that’s still a pretty healthy growth rate, Mr Huis said.

“The next measure is the share of wallet – that’s how much business do you do,” he said.

The credit unions all now compete with the banks in the lending market.

“Our products are exactly the same as banks, how we differentiate ourselves is through fees and service. This is what I keep hammering with our staff. It’s relationship building that’s what we’re all about,” Mr Huis said.

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