Mecu's Strength, Profitability And Stability Reaffirmed

MECU'S STRENGTH, PROFITABILITY AND STABILITY REAFFIRMED

Phylip Doughty, CEO of Victoria's largest credit union, mecu Limited, announced market guidance today that mecu expects full year profit for FY08/09 to increase on last year.

Year to date net profit after tax shows increased profitability, coupled with very low delinquent loans at just 0.13% of total loans.

Standard & Poor's annual rating has reaffirmed mecu's "Investment Grade" status, with a renewed BBB/Stable/A-2 credit rating. Highlights of the annual credit rating include findings that:

* mecu is fully funded by retail deposits, making it less vulnerable to dislocation in wholesale funding markets compared with many financial institutions;
* mecu has stable business profile, evidencing long-standing expertise in lower-risk retail financial services products; &
* mecu has strong liquidity, earnings, and capital adequacy ratios
relative to risks managed.

"This further increase in mecu's profitability demonstrates the power of community banking with a socially and environmentally-friendly emphasis." Doughty said.

mecu has more than a 50 year history in operating across Australia and has grown to become one of Australia's most successful banking cooperatives, with some 110,000 members, over $1.8billion in assets and more than $200million in member reserves.

Our achievements in summary

mecu continues to report record levels of member value and member satisfaction, continuing strong financial performance and staff engagement that remain world's best practice. Our financial performance stands out proving the value of being a prudently managed mutually owned financial institution with a sustainable approach to banking.

Last financial year:

* After tax profit was $17.549m up 5.8%;
* Assets grew 11.9% to $1.515b;
* Loan portfolio grew 16.7% to $1.102b;
* Member deposits grew 12.7% to $1.297b;
* Member reserves are now $181m increasing by 11.0%;
* Returned a member benefit dividend of $25.770m up 53.6%;1
* Member net satisfaction levels remained constant at 94%

END.

For mecu comment contact: mecu CEO Phylip Doughty on 03 9854 4646 or mecu General Manager Development Rowan Dowland on 9854 4644, mobile 0418508718

1 In 2008, Cannex determined the mecu members were some $25,770,460 banking with the credit union than banking with the 4 major banks. This means that each mecu member was on average $251.81 per annum better off by banking with mecu.

SOURCE: mecu