Thursday 18 December 2014

Gilmore: Newbridge CU savers would have lost €1.1m in savings

Tanaiste Eamon Gilmore says 20 other credit unions have reserves below the regulatory ratio of 10pc.

Published 12/11/2013 | 15:56

Tanaiste Eamon Gilmore says 20 other credit unions have reserves below the regulatory ratio of 10pc.
Willie Crowley, Chairman of Newbridge Credit Union Action Group pictured during a protest outside Newbridge Credit Union this morning. Photo: Frank Mc Grath
Willie Crowley, Chairman of Newbridge Credit Union Action Group pictured during a protest outside Newbridge Credit Union this morning.
Evonne Boland pictured with her two and a half year old son Tiago at the Newbridge Credit Union Action Group a protest outside Newbridge Credit Union this morning.
Majella O Hanlon from Newbridge, pictured outside Newbridge Credit Union . Majella's Father was one of the founders of Newbridge Credit union

Depositors in Newbridge Credit Union would have lost €1.1m in unprotected savings if it had been not been taken over.

Tanaiste Eamon Gilmore says 20 other credit unions have reserves below the regulatory ratio of 10pc.

He says the capital shortfall from those 20 credit unions is €11m.

The Tanaiste said 100 of the 392 credit unions in the country were being examined by the Central Bank on a case-by-case basis.

Mr Gilmore said the assets and liabilities of Newbridge Credit Union had to be transferred to Permanent TSB.

“Without the transfer to Permanent TSB, Newbridge would have been liquidated,” he said.

Mr Gilmore said this would have resulted in a “loss €1.1m in unprotected savings”.

Fianna Fail TD Sean O Fearghail said the method employed by the Central Bank in Newbridge was “spectacularly unsuccessful”.

The Tanaiste said €500m has been set aside in two funds for the credit union sector. 

“The Government supports the credit union movement,” he said.

Mr Gilmore said €53.9m will be injected into Newbridge Credit Union:

* €23m cash up front to fill the black hole in deposits;

* €4.35 for restructuring and integration

* €2m in other liabilities;

* a risk share, where the State will absorb part of the losses on loans, which would need €24.7m if it had to be met now.

Mr Gilmore pointed out Newbridge Credit Union had one loan of €3.2m, 26 loans over €550,000 and 52pc of the loans exceeded the five-year repayment schedule – well above the norm.

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