Capricornia share sale pays high return

Capricornia Credit Union will become one of the first credit unions to sell non-voting shares. The credit union’s board wants authority to sell $3.5 million of “investment shares” on which the credit union would be able to pay franked dividends. Capricornia proposes to a pay a dividend of 2.5 percentage points more than the bank bill rate, or around eight per cent based on current interest rates. The credit union has around $200 million in assets; $9 million in reserves and reported a net profit of $380,000 in the year to June 2004, which equals a return on net assets of five per cent and a return on assets of 0.2 per cent.