Credit union wants stake in Christchurch rebuild

16:00, Nov 09 2012

The South Island's biggest credit union, NZCU South, has strong membership aspirations particularly in Canterbury where it wants to help rebuild workers establish homes and a commitment to the region.

NZCU South chief executive Andrew Leys said the credit union was planning to help get rebuild workers into affordable housing, working with former Christchurch mayor Garry Moore

NZCU, in association with other credit unions, had started talks with Westpac bank's wholesale division to source extra funds to help provide mortgages for credit union members.

Leys said he was concerned about people moving to Christchurch for the rebuild thinking they were here for the short term, but staying much longer and needing accommodation.

Providing homes for less than $250,000 was the aim of the talks with Moore.

"We're looking at opportunities around affordable housing in Christchurch and what have you which means that there could be an opportunity for us to scale up significantly in terms of loan demand for that.


"Now to fund that we couldn't ramp up our own funding fast enough and so we're working with Westpac to see if we can create a mortgage pool funding (mechanism) but on our balance sheet."

Moore said he would continue to work with NZCU South on the affordable housing idea, having already sourced houses from the red zone that could be relocated. He was now working on finding cheaper land for those houses.

"We've been shifting houses. They've been going all over the place, South Canterbury and some in Christchurch," Moore said.

NZCU, which earlier this year announced the closure of Laurence, Hokitika and Westport branches and the merger of two Invercargill offices, had around 23,000 members, many in Southland, Otago and Nelson.

The closures were partly because of low membership numbers in those towns, Dunedin-based Leys said.

The credit union now had $115 million of assets, including $18.4m of capital and $93.3m of deposits.

In Christchurch it had a branch office in Hornby and had chosen to retain a branch at The Palms shopping centre, partly because of the need for workers on the quake-hit eastern suburbs to have a contact point with the union. The board was discussing a possible new branch in Papanui.

"We've got to look to the future. We do struggle in Christchurch . . . we've got the smallest penetration in Christchurch because of historical reasons."

Leys said while the union traced its roots back to the Nelson Catholic Credit Union started by Joseph Cotterell in 1962, a merger with other unions in Southland, Otago, Westland and Canterbury in late 2007 had led to it being the main South Island union.

Leys and NZCU South chairman Bevan Killick said a main point of difference from banks was the emphasis the credit union placed on advising members on wise financial choices, including home ownership, and avoiding debt traps.