Releasing its financial results at the annual meeting in Nelson, chief executive Tania Dickie said the operating surplus for the period was $461,000, up from $338,000 reported in the previous corresponding period.
Total operating revenue fell slightly to $18.32 million from $18.9 million in the pcp but remained ahead of the $18million reported in 2015.
The result was ''extremely pleasing'' after the costs of restructuring the branch network, reduced revenue from insurance sales and no dividend paid by the New Zealand Association of Credit Unions on the base capital note investment was taken into account, she said.
''We also had increased bad and doubtful debt costs due to a change in policy to write off loans earlier - at 180 days rather than 270 days.''
Credit Union South (CUS) membership increased by 2564 in the period, taking the total membership to 19,675.
Membership in the North Island, through the virtual branch, and Christchurch had grown strongly, with other areas continuing to struggle for growth in a competitive financial services market, Ms Dickie said.
The personal loan book fell from $68.7 million to $67.5 million, even after funding $46million of new personal loans.
A focus on assisting first-home buyers into home ownership meant CUS lending more than $15 million, contributing to a mortgage book of $46.4 million - up from $39.2 million in the pcp.
Strong growth was experienced in the Christchurch region, where many first-home buyers used their KiwiSaver contributions to achieve first-time home ownership, something that was always satisfying, she said.
The total loan book ended the year at $113.9 million, up from $107.9 million at the pcp.
''Savings and investments were challenging in a very competitive landscape early in 2017. We utilised advertising and competitive rates to grow term deposits to assist in keeping pace with lending opportunities and to maintain liquidity.''
During the current financial year, Ms Dickie expected interest margins to continue to be squeezed.
The loyalty savings account, which many new and transactional members did not use correctly, had reduced balances over the last few years, she said.
The account was designed to encourage savings. It was disappointing members did not value the purpose of the account so it operated as intended and members better understood the benefits and reasons of the product.
CUS had spent much of the last year preparing for the upgrade to its core banking platform to a modern technology delivery system.
''It is extremely important we keep pace with the digital world and not doing so is unacceptable. We continue to keep our minds open to new FinTech opportunities and how they can be integrated into the business.''
The new ways of doing business were important to attract and retain younger members who were the future of the credit union, Ms Dickie said.
CUS had continued to focus on internal technologies, particularly around loan applications, with upgrades to the loan origination system. Members had accepted the use of electronic signatures on loan document through DocuSign.
It continued to be important members could access CUS through channels outside of the traditional retail branch hours and transact anytime, anywhere.
The credit union continued its sponsorship of TradeQual, in Invercargill, Sydenham Rugby, in Christchurch, and KiwiHarvest, in Dunedin.
