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Sunday 22 October 2017

Cost of bailout for Newbridge credit union to top €57m

Newbridge Credit Union, County Kildare
Newbridge Credit Union, County Kildare

Charlie Weston Personal Finance Editor

THE full cost of the bailout of the controversial Newbridge Credit Union is set to top €57m, it can be revealed for the first time.

The Kildare credit union was transferred to Permanent TSB after a late-night High Court sitting on a Sunday night in November. Taxpayers were forced to stump up €54m to cover Permanent TSB's costs for taking over savings and loans. There is no longer a credit union in the town.

Central Bank executives had been trying to merge Newbridge with nearby Naas Credit Union, but in the end the deal fell through after the board of Naas rejected the tie-up.

The Irish Independent has learned that Naas has been given €750,000 by the Central Bank to cover its costs after it spent the summer considering the merger.

Accounts for Naas, seen by the Irish Independent, show that in the year up to September it had received €467,000 from the Central Bank to cover its third-party costs due to the botched merger. A further €283,000 has been paid since.

A Central Bank spokeswoman said: "We can confirm that the €467,000 was paid and that it is included in Naas CU accounts up to September.

"And we can confirm that additional funds have been paid since that date, and will be reported in Naas's accounts next year."

SAVING

The final figure for saving Newbridge Credit Union also includes €1.7m that is to go to accountant Luke Charleton of Ernst & Young.

Mr Charleton was appointed a special manager to Newbridge Credit Union in January 2012, with a view to stabilising the lender and sorting out its future.

And it is understood the Central Bank has incurred legal costs of €500,000, to be paid to a top Dublin law firm as part of the transfer of the Newbridge Credit Union accounts and loans to Permanent and other legal costs.

The €57m cost of the Newbridge rescue has come out of a €250m credit union resolution fund set up by the Department of Finance and managed by the Central Bank.

Newbridge Credit Union's only remaining asset is its Newbridge premises, valued at €3.9m, which will be put up for sale by a liquidator to repay some of the bailout.

The Office of Public Works has considered buying it to house offices of the Department of Social Protection.

Had the merger between Naas and Newbridge gone ahead it would have cost €69m, according to documents submitted to the High Court by the Central Bank.

The payment of what have been called third-party costs to Naas Credit Union for the aborted merger are contained in its latest accounts, showing it made a surplus of €1.5m in the year to September.

And Naas is now planning to extend its geographical reach to entice former members of Newbridge CU to join it.

It is one of a number of credit unions bidding to provide community banking in the town.

Irish Independent

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