Savings for credit unions in Northern Ireland reach £1bn

Credit unions in Northern Ireland have witnessed an increase in membership as well as in savings, assets and loans to members in the nine months from September 2013....

Credit unions in Northern Ireland have witnessed an increase in membership as well as in savings, assets and loans to members in the nine months from September 2013.

The end of year report by the Irish League of Credit Unions shows that credit unions have given £453m in loans to members, an increase of £4m from the year ending September 2013. Credit union membership has now reached 442,000 members in Northern Ireland, around 17,000 more than in the same period last year. Savings have also increased by 5.4% to £1,017m. ILCU’s report highlights that a number of credit unions have been introducing a wider range of loan products.

ILCU includes 96 credit unions from Northern Ireland. According to its report, lending demand in Northern Ireland has been higher than in the Republic of Ireland, which ILCU attributed partly to a stronger economic climate and lower rate of unemployment.

ILCU reveals that net loan arrears in the nine months from year-end 2013 have fallen from 5.3% to 4.7%. Bad debt write-offs are also down to 0.4% of loans (£1.9m) from 1%.

While the credit union sector continues to grow in Northern Ireland, the movement is also preparing to host the 2016 edition of the World Council of Credit Unions (WOCCU) annual global conference.

Commenting on the upcoming event, Ed Farrell, chief executive of ILCU, said: “The Irish League of Credit Unions is delighted to be welcoming the WOCCU Conference to Belfast in 2016. Credit Union representatives from as many as 100 countries worldwide will descend on Belfast in their thousands for the worldwide credit union movement’s annual conference, bringing a huge boost to tourism and the hospitality sector.

“The conference continues to be a much-anticipated event, bringing together credit union leaders and decision makers from the largest credit unions around the globe for four exciting days of networking and educational sessions. The conference has been held in previous years in the likes of Barcelona, Hong Kong, Las Vegas and Australia’s Gold Coast so we are thrilled that Belfast has been selected as their venue for 2016 and look forward to working with the World Council of Credit Unions to make it an unforgettable event.”

Credit unions reach 3.3m in membership in the Republic of Ireland

Credit unions in the Republic of Ireland have also reached 3.3m members. This represents an increase of 70,000 members from last year.

Savings within ILCU credit unions are up by 2.1% this year, having reached €10.7bn. Moreover, 288 credit unions experienced a growth in savings for the full year to date. Another characteristic of credit unions is that savings attached to loans remain high, with 40% of the loan book being covered by savings.

The end of year results show that credit unions have €5bn in funds available to lend to members. There are currently 374 credit unions in the Republic of Ireland.

The results reveal that gross loan arrears (overdue debt) were also down €130m or 17% year on year. ILCU report that loan provisions now exceed gross loan arrears by €59m and net loan arrears by €207m. Loan write-offs are also 30% lower than in 2013, according to the results.

One of the biggest challenges for credit unions in Ireland is addressing the fall in loans. However, the report shows that loans fell by only 1.4% in the quarter to June 2014, compared to the 2.5% in the previous quarter. ILCU estimates that credit unions will be issuing €1.5bn in new loans, given that €1.2bn have already been issued in the nine months to June 2014.

In terms of dividends, credit unions witnessed a reduction but this has not impacted on savings. The average dividend in 2013 was almost 1%, a slight decrease from previous years. IFCU predicts that more credit unions will be in a position to pay dividends to members in the coming months. Over 300 credit unions extended dividends to their members in 2013. Most credit unions are also making a surplus, with a total surplus at June 2014 of €194m, which is similar to last year’s figure.

According to the latest statistical report from WOCCU, credit unions across Ireland have a market penetration of 75%.

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