There is no viable future for Newbridge Credit Union as a stand-alone entity unless it is merged with Naas at a significant cost to the tax payer, the Leinster Leader can reveal.
The Central Bank’s Registrar of Credit Unions Sharon Donnery, speaking exclusively to the Leader, said Newbridge Credit Union has no future unless it is merged with Naas, because it requires the financial support of the Minster for Finance.
Finance Minister Michael Noonan has set aside €500m to recapitalise struggling Credit Unions that are being merged with more financially stable ones.
“The merger with Naas is the only viable option remaining to secure the long term future of credit union services in Newbridge,” she said.
“The credit union does not have a strong enough position to operate as a stand alone credit union.
“However, the combination with Naas will ensure that not only are credit union services available to people in Newbridge into the future, but that there is now an opportunity to build larger and stronger credit unions, under the ownership of its combined membership, to build and develop the credit union sector for the future.”
Atlthough no exact figure was given, Ms Donnery said that “significant funding will be required to cover the losses at Newbridge and the Minister’s [for Finance] support will mean that members will not suffer any financial losses”.
“The new combined credit union will be on a secure and stable financial footing and well positioned to develop and expand credit union services for the community,” she added.
According to the Registrar it is “most likely” that the €2m cost of the special manger and his team will also be covered by the bail-out fund, which effectively means the tax payer will foot the bill.
Once the merger has taken place, an AGM can finally be called, and the long awaited accounts for Newbridge from 2010 onwards will have to be published.
“Ultimately, if the merger goes ahead the accounts will have to be published,” she said. “The underlying issues will appear. We had specific concerns in relation to the level of losses incurred by the credit union, which impacted on the level of reserves held by the credit union.
“We also had concerns about some of the lending made by the credit union, which went beyond the traditional type of lending normally provided by credit unions, and increased losses at the credit union.”
She also noted that if the Central Bank had not taken action wih the appointment of the special manager in January 2012, “the position of Newbridge Credit Union would have continued to weaken and deteriorate, which could have had serious consequences”.
“The full range of credit union services will continue to be provided in Newbridge after the merger and there is no question of any member having to travel to another town to avail of credit union services,” she added.
“We understand that the last 18 months have been difficult for members, who have remained loyal and supportive to Newbridge credit union during this difficult period.
“We hope that now a resolution is proposed, which will ensure a viable future and the continuity of services within, members will view this as an opportunity to move forward and build a strong credit union, underpinned by a strong financial position, for all members.
“If this combination is approved, we expect that credit union services will continue to develop and grow within the community, ensuring a strong and successful future.
- Paula Campbell
For full coverage of the crisis at Newbridge Credit union, see our print and online editions.