Keen interest expected in sale of credit union loan book
THE liquidators of Charleville Credit Union have put its premises and loan book up for sale, with half a dozen credit unions already eager to acquire the loans.
Accountancy firm BDO is seeking bids for the loan book, which it says has a gross value of €14m.
However, it is understood that only around €8m worth of loans are performing.
BDO has also advertised that it is selling what it says is the prominent, fully-furnished office premises in the Co Cork town.
Charleville Credit Union was placed into liquidation last month by the High Court following an application by the Central Bank, with accountants Jim Hamilton and David O'Connor of BDO appointed to the role.
The lender had been under close regulatory supervision for years. It had been unable to raise and keep its cash reserves at the required level of 10pc of assets, despite receiving a €8m bailout from the League of Credit Unions.
Attempts to merge with other credit unions also failed.
The sale of the loan book is expected to be of most interest to nearby Mallow and Kilmallock Credit Unions, both of which extended their operations to cover the town after Charleville Credit Union was shut down. Another four or five credit unions in the area are also understood to have expressed an interested in acquiring the loan book ahead of it being advertised for sale.
The premises is around 1,000 sq m.
Mallow Credit Union has just done a deal with the liquidators to open a sub office in it, and is expected to be one of the main bidders for the building.
Since the appointment of provisional liquidators, the Deposit Guarantee Scheme, administered by the Central Bank, has issued compensation payments to around 10,900 members of Charleville.
The total amount of compensation paid out amounts to €39.2m, representing over 99pc of depositors covered by the scheme.
The decision to appoint liquidators to Charleville caused shock in the area, but the Central Bank has argued that it had no other option.