Leading credit union ring-fences €20m to cover bad debts
ONE of the largest credit unions in the country has been forced to put aside €20m to cover bad debts.
The bad-debt provision at Newbridge Credit Union is up almost a third on the amount put aside last year to cover bad and doubtful debts. The credit union has also seen its income fall, and the number of loans it has issued has also dropped.
Provisions for bad debts have shot up from €14m in 2009 to €20m this year. The credit union, which has €140m in loans, has seen its loan interest income fall by 15pc, the accounts for the year to September 30 last show.
The accounts, a copy of which has been seen by the Irish Independent, also show that just €91,000 was recovered in bad debts last year. Less than €1m has been written off for loans that have gone bad in what appears to indicate that a large number of loans have been rescheduled because people are unable to pay.
Total income for the credit union fell to €14.5m from €17.4m, a drop of 16pc. This shows the pressure on credit unions with fewer loans being approved, low income from deposits and more arrears.