DUBLIN, Ireland–More than 100 Irish credit unions remain subject to lending restrictions due to high delinquencies, but that number is down from nearly 200 at the peak of problems.
Ireland’s Registrar of Credit Unions, Anne Marie McKiernan, told the Credit Union Development Association annual meeting that “credit union arrears remain unacceptably high at 13%,” and that a recent increase in new lending volume has only served to disguise a continued downward trend in the number of new loans.
McKiernan said Ireland’s credit unions have seen improvements in some areas of operations, including growth in new loans, a continued decrease in delinquencies, and a decline in the number of credit unions reporting below the regulatory reserve ratio to seven at the end of last year from 11 at the end of 2014.
“While we welcome the fall in the number of credit unions below our required regulatory reserve ratio, this reflects restructuring and resolution efforts more than financial recovery,” McKiernan told the meeting. “Credit union members are not likely to take undue comfort from knowing that the number of credit unions failing to meet minimum standards is reducing – they rightly expect us, their regulator, to ensure that all credit unions meet the appropriate standards, and that we take appropriate regulatory action when they fail to do so.”
McKiernan said aggregate loans among Ireland’s credit unions declined to €4 billion in 2015 from €7 billion in 2008, and that the pressure is on to grow income from core lending. To do this, credit unions need to address the aging membership base, their product and service offering as well as the need to offer new services via different channels.
“For the sector’s future sustainability, we see four main requirements: further restructuring; a greater drive for new, active borrowers; a marked increase in core lending, and business model development in a multi-step, well-managed way,” McKiernan told credit unions.