Further consolidation among credit unions combined with banks working their way through the backlog of loan arrears as well as a possible solution for loss-making tracker mortgages are all needed for the financial sector to return to profitability, Central Bank governor Patrick Honohan has said.

IN THE last five years, the banks, which cost taxpayers €64bn, continue to remain moribund. There has been no significant lending and their mortgage arrears problem continues to deteriorate.

The Government is set to publish legislation facilitating major change to the credit union industry by the end of June.