Monday 11 December 2017

Cost of Newbridge bailout may be lower than planned

Credit Union
Credit Union

Gordon Deegan

The cost to the taxpayer of the bailout of Newbridge Credit Union (NCU) may be some way off the €53.9m provided for by the Central Bank.

That is according to new figures provided by the Minister for Finance, Michael Noonan.

In November 2013, the Central Bank appointed Permanent TSB (PTSB) to take over NCU and provided a State fund of up to €53m to PTSB to make good the losses at NCU.

The takeover was taken after poor lending decisions were made by NCU.

It avoided an immediate liquidation of the union under which members would not have had access to their money and some - such as schools which kept deposits there - were at risk from a loss of funds.

The transfer of the financially-troubled credit union to the State-owned bank was approved by the High Court, following an application by the Central Bank.

At the time of the transfer, NCU had about 32,000 deposit accounts and 7,000 loan accounts.

In a written Dáil response to Fianna Fáil's Michael McGrath, Mr Noonan said that part of the €53.9m included €24.7m to cover costs resulting from all loans being written off with nothing recovered.

However, Minister Noonan said that if the loans perform well, the Central Bank may have no liability under this heading or could actually be paid by Permanent TSB in the end.

Irish Independent

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