50% fall in profit hits dividend for Ballinlough credit union members

A MORE than 50% drop in profit at a Cork city credit union means members will not receive either a dividend or loan interest rebate in 2011.

Summaries of financial statements for Ballinlough Credit Union (BCU) indicate one of the factors contributing to this decision is a shrinking balance sheet caused largely by a reduction of more than half a million in new loans. In the year to September 30, 2009, 4.5 million loans were granted compared to 4 million for the year to the end of September 2010. A reduction in the number of loans means the amount of interest paid to the credit union also reduces. Credit Unions depend on interest income and returns on investments to cover their operating costs and pay dividends.

Chairman of BCU’s board of directors Tom Scriven said the inability to pay a dividend this year reflected a number of factors, including the falling interest rate on money invested and the growing number of members in arrears due to the country’s current economic woes.