Hundreds of credit unions look at merging together
Merger moves are to build stronger units
MORE than half of the country's credit unions are now looking at merging.
If even a fraction of them go ahead with tie-ups, it will amount to the biggest shake-up in the 55-year history of the movement.
Just over 200 credit unions have contacted the state body put in place to manage voluntary mergers, up from 125 at the start of the month.
This is out of a total of 392 member-owned credit unions.
The merger moves are to build stronger units, with lower costs. Offices will not close, and no job losses are planned, head of the Credit Union Restructuring Board (ReBo) Donal Coghlan stressed.
This week, north Co Dublin credit unions in Skerries, Balbriggan and Donabate formalised a merger to create Progressive Credit, which will now have assets of €70m and be able to offer electronic payments.
Now it has emerged that the boards of Batinglass in Co Wicklow and Castledermot, Co Kildare, have passed a resolution to merge.
The process should be concluded by the start of next year and will create a new body with assets of €42m. Castledermot has assets of just €5m.
And three south Dublin credit unions are to come together to create a bigger lender.
The tie-up of Dalkey, with Sallynoggin/Glenageary, along with Shankill, Ballybrack and District, will create a new body with assets of €69m.
The three community lenders are engaged in a due diligence process, and intend to complete a merger by the end of March next year, Mr Coghlan said.
Each credit union is owned and operated separately, with its own board, its own IT and payments systems.
By joining with another credit union, the lenders can pool their costs and become bigger entities, allowing them to offer more services to members.
Where a credit union in a town merges with another, there will still be a branch in that town, and each member will still have a vote.
However, some critics have questioned if mass mergers will lead to a loss of local control.
Around 40 credit unions have advanced their merger plans to the point where they are engaged in talks with each other on linking up, in a move that could eventually see this number whittled down to just 18 separately owned credit unions.
The Government has set aside €250m to cover the legal, accountancy and other costs for credit unions that are merging.
This is in addition to the €250m fund run by the Central Bank to boost credit unions that are in trouble.