In a last ditch attempt to keep Newbridge Credit Union from a proposed merger with Naas, the Newbridge CU Action Group have retained the services of a “resolutions expert” to deliver an alternative plan for its future to the Central Bank.
The issue of Newbridge Credit Union was hotly debated in the Dail last Wednesday, following a question raised by Kildare TDs.
It has futhermore emerged that Minister Noonan took advice independent of the Central Bank in relation to Newbridge Credit Union before making his statement on the Dail which supports its proposed merger with Naas.
The Action Group met with the Minister for Finance, Michael Noonan, on Thursday. The meeting began with the Action Group Chairman Wille Crowley calling on the Minister to resign.
“It was a very tense meeting,” said Mr Crowley, who added that there is an historical reluctance to engage between the two towns of Naas and Newbridge.
“The Minister pre-empted our meeting by announcing in the Dail his position, [in line with the Central Bank] regarding Newbridge Credit Union and that undermined us.”
Mr Crowley furthermore claimed that bad debt provision at Newbridge Credit Union is now up to 50 percent of the loan book.
Mr Crowley added that the Action Group has “sufficient information to present an alternate resolution” but when pressed on the matter he said the “information was sensitive”. He also claims that Newbridge Credit Union Action Group have information that the provision for bad debts at Newbridge CU is currently “as high as 50 percent” of the loan book.
Mr Crowley said that the group’s alternative plan “will require certain changes to our existing credit union but it is a feasible and cheaper alternative [than the merger]. It will be a compromise on both sides -If restrictions are lightened to reasonable levels - we would be happy to have a prudent reserve of 7.5 percent from 10 percent.”
According to Mr Crowley, the Minister’s response to the call for his resignation was that he felt it was “harsh”.
Kildare South TD, Martin Heydon, who also attended the meeting, said the call for the Minister’s resignation was “not helpful”.
“The Minister did not accept the allegations made,” said Deputy Heydon, referring to the Minister’s statement in the Dail on Wednesday about the high level of loan losses incurred by Newbridge Credit Union prior to the appointment of the special manager, and loans made. The Minister also reiterated in the Dail that it would be impossible to recapitalise a credit union on a stand-alone basis, and that “a combination with Naas represents the best way of delivering a sustainable credit union presence in Newbridge into the future”.
Minister Noonan said he expected the merger to be complete by the end of the year.
He further addressed the issue of Naas Credit Union dividends, stating: “The issue of dividend payments to Naas members for the current year is a matter for the board of Naas credit union and, following the combination, will be a matter for the board of the merged entity in future years”.
Deputy Heydon said: “The Minister had an obligation to stress the importance of the issue. I can confirm that the Minister has got independent advice separate to the Central Bank from officials with international banking experience who have analysed the data and advised the Minister accordingly.”
The Action Group are now working with resolutions expert Greg Allen, who was also in attendance at the meeting, in a bid to offer a new option for Newbridge Credit Union. The proposed plan is expected to be delivered to Deputy Heydon, who has committed to passing it on to the Central Bank, in two weeks’ time.
According to Mr Crowley, the value in use for the Newbridge Credit Union building should be €15 million despite its current market value of €1.5 million.
“We don’t accept the market value,” Mr Crowley said. “It is a prime building in a prime location in Newbridge. What would Aldi or Lidl pay for it? A building is only worth what somebody will pay for it.”
A spokesperson for the Minister for Finance declined to comment on the Action Group’s resignation call or on their latest bad debt provision claims.
“We are not in a position to comment on the figures as they remain subject to confidentiality under the High Court process,” said Paul Bolger, Press Officer. “No figures were given at the meeting.”