Credit Union Quarterly results show sustained Lending and Mortgage Growth

Posted on: 20 Aug 2024

The Irish League of Credit Unions (ILCU), which represents 90% of the total active credit unions in the Republic of Ireland, has released the Q3 2023/24 quarterly performance results on behalf of its member credit unions. 
 
The results for the quarter (April to June 2024) reflects the 13^th straight quarter of sustained lending growth with a cumulative increase of 12.8% for the last 12 months. Overall, credit unions’ market leading share of the unsecured personal lending market has increased to 53%. The increased lending is against a backdrop of all time low arrears of 2.5%.
 

Savings & Loans 

The assets of ILCU affiliated credit unions stood at €18.3 billion at the end of June 2024 while savings in ILCU affiliated credit unions have increased to €15.3 billion. Q3 2023/24 showed an extraordinarily strong performance across the entire credit union lending portfolio.
 
In total, there were over 110,000 new loans issued in the quarter, this is up 21% on the previous quarter, and equates to over 1,200 loans issued every day. With annual loan growth of 12.8%, the loan book now totals €5.74 billion which is the highest level in over 15 years. In addition, the average loan is now for the first time over €10,000.
 
The increases in lending are in the context of record low arrears of 2.54%. This compares to a current 90-day mortgage arrears ratio of 4.1% (CBI Residential Mortgage Arrears report published 5 July 2024[1]). 
 
The ILCU credit union mortgage loan book has increased by 10% in the quarter to €518m at 30 June 2024. Mortgages now make up nearly 10% of the total credit union loan book. Public demand for credit union mortgages continues to grow, driven by competitive rates and a personalised service with quick turnaround times.
 

Current Accounts & Digital Payments 

The Q3 2023/24 results demonstrate a well-rounded performance, with both traditional and digital channels contributing to the credit union's success. With regard to current accounts, credit unions processed in excess of 8 million electronic payments in Q3 2023/24, of which 58% were card based and 42% SEPA transfers – an overall increase of almost 16% when compared to the same quarter in 2022/23.
 
Of the card-based transactions, 95% were point of sale or online with 5% ATM withdrawals.  In terms of point-of-sale transactions, contactless was by far the preferred method, with 60% of all point-of-sale transactions paid using contactless payment. In terms of current account growth, 1 in 10 of current accounts opened in the last quarter was with a credit union, showing continued growth in the number of people choosing to bank with their local credit union.
 
The recent growth in credit union members using digital services is quite significant. Over the past 12 months, there have been 14.1 million digital transactions conducted by credit union members, with a total value of €2.3 billion. This marks a notable 30% increase in digital transactions compared to the previous year. Even more impressively, this represents a fourfold increase in digital transaction volume over the last five years.
 
David Malone, CEO of the Irish League of Credit Unions commented; “These financial results highlight the continued astounding momentum of credit unions with the 13^th straight quarter of growth across our lending products. There is an increase of 12.8% in lending for the last 12 months while arrears are at an all-time low of 2.5%.
 
“Mortgage lending continues to grow apace and has doubled over the last two years with the credit union sectoral mortgage loan book now in excess of €600m. Credit unions are providing much needed competition and customer choice in the hyper concentrated mortgage market.
 
“However, credit unions are restricted by arbitrary crisis era regulations, that limit the amount they can lend in respect of mortgages. These limits are actively prohibiting competition and are not in the best interests of financial stability or enhanced consumer protection. It is imperative that targeted proportionate changes are made to the existing regulatory limits by the Central Bank.
 
“Given the clear demand for mortgages and credit union services overall, changing the lending limits will offer an immediate and tangible benefit to aspiring homeowners across Ireland. As such, it is our understanding that the Central Bank of Ireland will issue a report on the review of the lending framework by the end of the year, which we very much welcome.” 
 
Mr Malone continued, “Credit unions are not just in 400 locations around the country. We are also in your pocket or handbag too. Credit union digital transactions have increased fourfold in the last five years. These results highlight an increasing shift of members accessing everyday banking services digitally through their credit unions. Credit unions are digital when you want it but also here in person when you need it, as described by the launch of our new national advertising campaign that showcases our heritage, offering, reach and future growth. This holistic approach is what sets us apart from other financial institutions and drives our evolution.”
 
With regard to broader sectoral activity, last week, the ILCU, on behalf of its affiliated credit unions, launched a new ‘For You’ national advertising campaign. The campaign, which will run across TV, Video on Demand, Radio and Social Media, highlights the crucial role credit unions play in supporting local communities by providing essential funding and services. By focusing on their not-for-profit values, it demonstrates how credit unions help people and families achieve their goals at every stage of life.
 

ENDS 

 
Notes to Editor
Please note that the 2023/24 Credit Union Financial Calendar is as follows:

• Q1 - October 2023 to December 2023

• Q2 - January 2024 to March 2024

• Q3 - April 2024 to June 2024

• Q4 - July 2024 to September 2024

Summary of Quarter-on-Quarter Financial Performance

The table below shows a comparison of the quarters ended June 2024 and March 2024 financial results.

 

Summary of Annual 12 Months Financial Performance

The table below shows a comparison of the 12 months ended June 2024 and June 2023 financial results.