Credit union body reports surplus hike of €130m
In a mixed bag review, the Irish League of Credit Unions (ILCU) said the combined surplus of its members amounted to €227m, up from a €93m profit at the end of Jun 2011. It said more credit unions should be in a position to pay dividends for 2012.
However, while savings levels remained stable, at €11.53bn, and membership increased by 35,000 people to 3.11m — on a 32-county basis — impairment provisions for bad and “doubtful” debts in the Republic rose from €672m to €723m, and 16% of all credit union loans are currently considered “doubtful”.
In addition, the movement’s combined loan book decreased by 8.5% on the back of “a severe lack of demand and continued restrictions on lending”.
While the value of loans in arrears remained stable at €731m for the period due to the dwindling loan book, the percentage of loans in arrears rose from 14.55% to 16.14%, year on year.
ILCU chief executive Kieron Brennan said the overall figures are reflective of the economic challenges facing the country, but pointed out that as of the end of June, only five member unions showed a deficit, as opposed to 81 a year earlier.
He said while more dividends can be expected, credit unions continue to operate responsibly and will continue to prioritise provisioning over payment of dividends, given the current climate.
Mr Brennan added that while loan arrears remain a concern for the league, most unions are in surplus and have reached their 10% regulatory reserve ratio target ahead of the end of 2013 deadline.
The ILCU remains hopeful of its concerns regarding the new Credit Union Bill being considered in the coming weeks. It recently raised a number of issues to the Oireachtas Finance Committee on the matter.
The league’s president, Jimmy Johnstone, also said yesterday that the personal insolvency legislation will impact the movement, but that as the country emerges from its current difficulties, “we will be there to support communities and people, like we have been for five decades”.
