Over 90 credit unions pursue merger options
Moreover, in the first ever merger put to members, there was overwhelming support for a tie-up between Coolock and Artane credit unions.
At the end of last December there were 390 credit unions in Ireland with total assets of just under €14bn.
“Taken in aggregate, the Credit Union Sector has a strong balance sheet and would meet all its regulatory financial targets if it were one single entity. However, it is an atomised structure, independently owned and run by its members and it is facing challenges,” said ReBo CEO Donal Coghlan.
“Income is under threat as the average loan to asset ratio continues to decline, operating costs now exceed loan interest income in approximately half of all credit unions and investment income is expected to fall as interest rates remain low. Achieving scale is a significant factor in addressing the current financial weakness in many credit unions — ReBo are there to facilitate this,” he added.
Finance Minister Michael Noonan has made available €250m for restructuring. Consolidations are set to form part of ReBo’s review.
“With ECB interest rates at an all-time low and forecast to remain low for the foreseeable future, the rate of return on investment income is expected to fall further compounding stresses,” said Mr Coghlan.
