Friday 20 April 2018

Surge in credit union mergers

stock image
stock image
Charlie Weston

Charlie Weston

A number of credit unions in North Dublin are planning a merger in a move that could create one of the largest locally-owned lenders in the State.

It comes as a flurry of link-ups are expected ahead of a deadline at the end of this month when State supports for mergers will cease to be available.

Member First Credit Union, which was created through the coming together of Coolock- Artane and Swords credit unions, is planning more link ups.

It already has €154m in assets and 50,000 members.

It is hoping to take over two separate credit unions - one in Raheny, and the Beaumont/Donnycarney one. If the move comes off it will create an enlarged unit with €250m in assets and 70,000 members.

A spokesman for Member First had no comment.

Some 68 different member plans are in negotiation, involving 123 credit unions, according to the State body set up to facilitate and help fund mergers, Rebo. The remit of Rebo will end on the last day of this month.

It provides pay up to 50pc of the total costs associated with a tie-up such as due diligence, business consultancy, legal, human resources and communications costs.

It is official policy to encourage credit unions to merge to create larger units that will benefit from economies of scale.

An Irish League Credit Unions spokeswoman said: "A number of credit unions are in discussion with Rebo at the moment as its (Rebo) operation comes to an end."

The credit union for ESB staff, St Patrick's, is proposing a merger with Ringsend & District, East Wall and IndoGroup credit unions. The latter is for staff of Independent Newspapers.

Members of the four credit unions have voted in favour of the link-up. Collectively, the new credit union would have assets of €350m, making it one of the largest in the state.

There are 335 active credit unions in the State following a spate of mergers, but around 100 are not engaged in any merger discussions.

The directors of these feel there will be a loss of the ethos of the movement if they engage in mass mergers.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business