APPROXIMATELY 50 credit unions are expected not to pay a dividend this year, a press briefing by the Irish League of Credit Unions (ILCU) was told yesterday. Last year, 25 credit unions failed to pay a dividend.
The briefing was told that more than 90 per cent of the league’s credit unions were expected to produce a surplus this year. The league has 508 affiliated credit unions, of which 405 are in the Republic.
It expects to write off €60 million in bad debts this year, out of total loans of €6.8 billion.
League president Mark Bailey said the figures showed the resilience of the movement. He also said the league’s advice this year to member credit unions was that they should exercise prudence and reduce the size of dividends.
League chief executive Kieron Brennan said slightly less than half the funds in the league’s credit unions were out on loan. The equivalent figure for the banks was 160 per cent.
The movement had a solvency ratio of 116 per cent and reserves were 12 per cent of assets. “Those figures spell prudence and strength” in the current environment, he said.
Today is the year-end for league affiliates and, over the coming months, individual credit unions will make their decisions on the issue of dividends.
Mr Bailey said the year just ending was “probably the most difficult trading year in our 51-year history”, with so many credit union members facing pay cuts and job losses.
However, “unlike other financial institutions”, credit unions were “safe and strong and secure”. Credit unions were “still providing loans and welcoming new members”.
Loans in arrears had climbed to €640 million from €558 million in the March-August period, or from 8.21 per cent to 9.44 per cent. The figures represent gross amounts – that is, the people with the loans would also be the holders of shares.
Total loans written off last year stood at €23 million, but the equivalent figure for this year is expected to be €60 million. During the nine months to June, the movement recovered €13.2 million in loans written off.
League affiliates retain assets of €13.9 billion, loans of €6.8 billion, and they have savings of €11.9 billion.
