The ratings on Credit Union Services Corp. (Australia) Ltd. (CUSCAL) reflect its principal position in Australia's credit union sector, very good asset quality, and its strong liquidity and funding profile. Moderating the rating is CUSCAL's history of low absolute earnings, and instability in its earnings base, stemming from several nonprofitable, noncore activities. In recent times, CUSCAL has returned to its core role of supporting credit unions' operations, and on improving its operational efficiency. Tangible results are emerging in improved underlying earnings, and the commerciality of its operations. Capital adequacy remains consistent with CUSCAL's rating and risk profile, but the absolute capital level is modest by international standards. CUSCAL has a sound business profile as a service provider to the Australian
