Surge in credit union mortgages during 2023

Irish League of Credit Unions chief executive David Malone with Central Bank governor Gabriel Makhlouf and Irish League of Credit Unions president Martin Busch. 

The number of mortgages issued by credit unions surged 80% during 2023 to around 1,800 as the total value of all mortgages held by these providers reached over €500m, new figures show.

The latest financial results from the Irish League of Credit Unions (ILCU), which represents 92% of credit unions operating in the country, show that 570 mortgages were issued between October and December last year, an increase of 15% compared to the end of 2022.

In 2022, credit unions issued just 1,000 mortgages. The value of all credit union mortgages at that point was €350m.

The ILCU said that its mortgage arrears rate is 2.7% compared to the 4.1% 90-day mortgage arrears ratio the Central Bank recorded towards the end of last year.

While credit union mortgages are growing, it is still a small proportion of the overall mortgage market. According to figures from the Banking and Payments Federation, Ireland, between October and December last year, its members saw 11,584 new mortgage drawdowns worth a combined €3.3bn.

New legislation

In December, new legislation was passed by the Oireachtas which the Government hopes would allow credit unions to expand their reach in the mortgage market.

As of the end of December, savings with ILCU members increased by €310m or 2.1% to €15bn compared to the end of 2022. The total value of all member loans rose to €5.41bn, up €631m or 13.2% compared to the previous year.

Between October and December, over 112,000 new loans were issued by credit unions, up 4% year-on-year, which equates to over €48m a week in loans being issued by credit unions.

The total assets of ILCU-member unions stood at €18bn as of the end of December.

ILCU chief executive David Malone said these latest results show that there is a “growing pipeline of demand for loans” from credit unions for which “our members are ready to facilitate”.

Mr Malone added that the ILCU is looking for “targeted changes” to the Central Bank of Ireland’s lending framework in order to allow more choice for customers and to reduce the dominance of the retail banks.

“The changes we are looking for will allow more mortgages, remove crisis-era restrictions, and allow more business loans, thereby enhancing competition in a safe and prudent manner,” he said.