Credit union loan growth continues fall

LOAN growth at credit unions across the Republic and Northern Ireland declined again in 2007.

New figures from the Irish League of Credit Unions (ILCU), which represents 521 credit unions on the island, show average loan growth of 5% in 2007, down from 6% in the previous year and 9.5% in 2005.

The ILCU’s latest annual report, published yesterday, shows the average loan amount in the Republic was €8,150 in 2007, up 1% from 2006. Over the last five years the average loan size has increased from €6,750 to €8,150.

Membership of the 521 credit unions remained steady at 2.9m.

Savings held by members at the end of 2007 grew to €13.4bn, up from €13.2bn in 2006.

The total assets held by credit unions over the five years to 2007 have increased to €15.1bn from €10.8bn.

The ICLU’s annual report for 2007 shows the league made a surplus, or profit, on its activities of €14.8m, up from €7.6m in 2006.

The increased surplus reflects higher income and lower administrative expenses.

Income for the year rose to €72.7m from €67.8m, mainly due to higher revenues from its insurance activities.

The ILCU operates a Savings Protection Scheme (SPS) that credit unions purchase. The scheme pays out to credit unions that fall into difficulties. Income here rose to €60m from €55.1m.

The ILCU said a review of the SPS found that it had sufficient funds to meet any calls that might be made of it.

“The value of certain investments being held by some credit unions has caused concern,” the annual report states. “However, the SPS was not called on by any credit union in 2007.

“The fund now stands at €105 million, which equates to 0.78% on total estimated savings of €13.4 billion,” the reportsaid.

Affiliation fees for the year from the league’s 521 member credit unions came to €10.4m.

The league’s retained surplus at the end of 2007 was €153m, up from €138m in 2006.

The ratio of loans in arrears declined year-on-year. Loans in arrears for more than 10 weeks, as a percentage of gross loans, was 5.91% in 2007, compared to 6.04% in 2006.

Loans in arrears for more than 18 weeks was 3.66%, compared to 3.8% in 2006.

The report also reveals that at any one time less than a third of credit union members have outstanding loans.