Credit Unions Announce Strong Performance and Prudent Approach
Strong Performance and Prudent Approach
Over 90% of Credit Unions will deliver a Surplus in 2009
Irish League of Credit Unions Overview of Credit Unions at End of Year Returns
Embargo 3.00 p.m. - 29th September 2009
Credit unions are different from other institutions, they are financial co-operatives run by volunteers on a not for profit basis. At the heart of the communities in which we operate, we are focused on our member’s needs rather than being preoccupied with generating profits. Credit Unions have provided €7 billion in loans to our membership. This membership has increased by 1.4% in 2009, bringing the total number of members to almost 3 million. (2.9 million members across 32 counties).
Marking the end of year for credit unions, the Irish League of Credit Unions today gave the expected end year assessment for the movement generally. Commenting at today news conference Mark Bailey, President (ILCU) said “This year has proved challenging and difficult for all financial institutions. However most credit unions are performing very well given the circumstances. Based on our latest set of figures it is our estimation that over 90% of ILCU affiliated credit unions will deliver a surplus in 2009. This proves that we are actively managing our financial affairs in a conservative and prudent manner to minimise exposure to our members in these difficult times. These estimates show that most credit unions will be in a position to pay a dividend to members this year. In addition credit unions are also taking measures to ensure that sufficient reserves are held to allow for any further deterioration in the general economy”.
He went on to say “Undoubtedly, the economic downturn has had an effect on the credit union movement. However we are satisfied that the credit union movement is safe, strong and secure, and continues to provide sustainable worthwhile financial services for our members throughout the country. Unlike other financial institutions credit unions are still providing loans and we are still offering credit to our existing members and unlike other financial institutions we are welcoming new members to the movement every day.
Part of dealing with the ongoing economic crisis means having sufficient funds in reserve to ensure that those seeking loans can do so in a way that allows them to meet the repayments. To date for 2009 over 99% of credit unions have ensured that they have a sufficient reserve ratio in place. In the weeks and months ahead credit unions will continue to work with those who are having problems to find a solution that ensures that repayments are met in a way that suits the members' financial circumstances”.
There is a general recognition that serious challenges to the financial system in Ireland have necessitated a response by Government. The Department of Finance is currently preparing proposals to address the regulatory failures that have arisen in the banking sector but as the regulation of credit unions currently falls within the structure of the Financial Regulator, the reforms will clearly have an impact on the credit union movement. From a regulatory perspective it is important that credit unions are not tarnished or blighted by the measures that are being introduced to address the regulatory failures that have afflicted the banking sector. The current regulatory structure for credit unions is appropriate and meeting its primary objectives. The ILCU is working to ensure that the proposed changes to the regulatory regime are appropriate and proportionate for credit unions. In Northern Ireland the Irish League of Credit Unions is proactively working to influence the Northern Ireland regulatory landscape to ensure ease of operations for credit unions and their members.
Commenting on the credit unions that will not be in a position to return a dividend to their members for 2009 Kieron Brennan, ILCU, CEO said “Given the unprecedented economic climate in which Ireland finds itself, it is necessary for credit unions to be prudent and consider the longer term impact of the current economic environment. For that reason it is expected that a number of credit unions will deliver a reduced dividend for 2009. In addition some credit unions who will deliver a surplus will decide to forgo dividends this year in the long term interests of their members. This is prudent and proactive financial management and continues our careful management practices which have guided us through these difficult times.
Credit unions act at all times in the interest of members; those who find that surpluses are reduced this year must cut their cloth accordingly in these uncertain times. There is no NAMA solution for credit unions nor do we want one. Credit unions will continue to put the interests’ of our members first, and work with our members to meet their day to day financial needs”.
SAFE, STRONG, SECURE
In conclusion Mark Bailey said “The current financial crisis has highlighted the safety, strength and security of the credit union business model. Despite speculation earlier this year that up to half of credit unions would not be in a position to pay a dividend, the resilience of the credit union movement has been proven once again, with more than 90% in a position of surplus. We continue to be provide excellent services for our members and we are welcoming new members every day. However we readily acknowledge that there are challenging and difficult times ahead for us and we will continue to manage our affairs in a prudent and proactive manner in the best interest of the many, not the few”.
Ends
Pictured at the credit union year end press conference were Kieron Brennan, CEO, Irish League of Credit Unions, Mark Bailey, President, Irish League of Credit Unions, Tom Kiely, Head of Monitoring, Irish League of Credit Unions.
For further information please contact Kieran McDonnell – Communications Office – Irish League of Credit Unions on 01 - 6146971 or kmcdonnell@creditunion.ie
