Credit Unions "reasonably strong" says Central Bank report
The Central Bank has said that the ability of the Irish credit union sector to absorb financial shocks is “reasonably strong”, according to a new report.
However, the Bank warned that there were considerable variations among the capital ratios of the credit unions.
The Central Bank published a report on Friday analysing the activity of the credit union sector between 2011 and 2016.
The report found that there had been considerable consolidation in the sector in recent years, with many local branches merging to form larger organisations.
Total assets in the sector now stand at €16bn, up by a total of €2bn over the period in question.
However, the research found that loan books were down by 28pc between 2011 and 2016. The value of loans held by credit unions across the country is now €4.1bn, down from €5.7bn in 2011.
Loan arrears have also fallen however, with just 10pc of accounts now found to be overdue for payment, compared to 18pc five years ago.
The average sector loan to asset ratio has decreased from 42pc to 27pc over the period.
“We welcome the report and the acknowledgment of the resilience of the credit union sector during the Country’s financial crisis,” said Kevin Johnson, ceo of the Credit Union Development Association (CUDA)
“The sector is well capitalised and well positioned to develop broader range of products and services, but there are impediments, primarily legislative and regulatory, that need to be worked through,” Mr Johnson added.