Key Post Interesting stats on Credit Unions from Central Bank

Brendan Burgess

Founder
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2 November 2013

Data as of June 2013



Total assets|€14 billion

Loans to members |€4.6 billion

Surplus liquidity| €9 billion

Average arrears| 20%
Average arrears in worst 50|>30%
# of CUs with reserve ratios <7.5%|25
Members|3m
Loans issued|700,000
Loans to members have decreased by 11 per cent from June 2012 and currently stand at €4.6 billion, with the sector average loan-to-asset ratio being approximately 34 per cent and it is notable that this ratio has decreased by close to 30 per cent since 2006.
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Managing an investment portfolio can be a complex task and presents its own challenges to credit unions who need to have the appropriate level of expertise to manage the related risks. In addition, managing investment portfolios is not why credit unions were set up and is not what their members expect them to be doing. So the focus here needs to be on the loan-to-asset ratio and stemming its on-going decline to ensure that the business is viable for the future. Of course, this must be done in the context of a prudent approach to lending with strong underwriting and credit assessment.
 
Letter from Credit Union Network


Assets > |# of CUs
> €100m|20
€10m -€100m|261
<10m|101
Total|381
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Average cash on deposit per credit union: €18m

Counterparty analysis at Sept 2012
AIB| €2 billion

ptsb|€1.7 billion
BoI|€1.5 billion
KBC|€0.8 billion
Ulster|€0.7 billion
Total|€6.2 billion
 
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Data as of Dec 2013

Average loan to asset ratio| 32%
190 have loan to asset ratios of <|30%
Average credit union loan|€6,000




Owing to the scale of the issues and concerns identified within individual credit unions, approximately half of all credit unions are now subject to some form of lending restrictions.
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I would emphasise again, that less than 10 per cent of all credit unions have a restriction which limits the total amount of lending within the month. This means that the vast majority of credit unions are not restricted in how much they lend in aggregate for month. And for those with an individual loan size restriction, the level at which the limit is imposed ensures that the vast majority of those credit unions can continue to make loans significantly more than the average loan for the sector of just above €6,000. In fact, only about a dozen individual credit unions have lending restrictions which limit the amount loaned to less than €10,000 per loan. The vast bulk of restrictions limit credit unions to lend amounts of between €10,000 and €30,000. This is evidence, in my view, that we have carefully calibrated our use of this regulatory tool to mitigate risk but recognising the core business of credit unions to lend to their members. In effect, it means that credit unions should still be able to meet the need of the vast majority of their members including if those members need small sums for emergency situations.
 
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8 March 2014

On a review of sector-wide data, it is notable that for those credit unions that paid a dividend in at least three of the last five years, there was a minimal reduction in the total level of members’ shares and deposits from 2009 to 2013. However, for those credit unions that only paid a dividend to members in two or less of the last five years, there was an overall reduction in the aggregate level of members’ shares and deposits around one fifth in the same period.
 
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