Permanent TSB could gain control of the troubled Newbridge Credit Union as early as this evening, once necessary approval is granted by the High Court.
Newbridge — which has a deficit of around €50m — has been run, on a special manager basis (provided by Ernst & Young) since the beginning of last year, but had its long-term future cast into serious doubt at the end of last week when tentative plans for a merger with Naas Credit Union were rejected by the latter’s board.
While PTSB wasn’t commenting on the matter, ahead of anticipated High Court approval, it is understood the Central Bank approached it with this revised solution plan and that agreement is in place for the bank to take over the full-time running of the ailing business.
In the event of that deal being approved early this week (the High Court order is expected today) all customer accounts at Newbridge Credit Union will transfer to PTSB, as will all employees. Members of the union will become PTSB customers, but their deposits will remain secure and loan rates are unlikely to change.
It is also believed that PTSB has sought reassurances that it won’t be at risk if Newbridge’s loan book deteriorates further.
The plan, however, hasn’t been welcomed by lobbyists, the Newbridge Credit Union Action Group, which had been anticipating a Central Bank response to its own restructuring proposals for the union.
The Action body’s chairman, Willie Crowley said over the weekend that news of PTSB’s involvement has been greeted with “shock and dismay” and has left locals and employees “confused and upset”.
“This hasty and ill-conceived action demonstrates the determination of the Central Bank to obliterate the ethos of credit unions and impose a banking culture on all local communities throughout the country. If this action is allowed to happen it will devastate the town of Newbridge and a large portion of the town’s people will be left without a source of credit and at the mercy of the growing menace of the moneylender,” he said.
Recent reports have suggested the Exchequer would have to pump €50m-€70m into Newbridge Credit Union before any ownership change. Mr Crowley’s action group has now vowed to apply to the High Court for a stay on proceedings. It is also calling for a complete boycott of all Government party candidates standing in next May’s local elections.
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