Last ditch plan for Newbridge CU

Paula Campbell


Paula Campbell

Newbridge Credit Union was on 'hourly liquidity watch'.
A last-ditch plan to keep Newbridge Credit Union (CU) from merging with Naas will propose the establishment of a new credit union funded in part by members.

A last-ditch plan to keep Newbridge Credit Union (CU) from merging with Naas will propose the establishment of a new credit union funded in part by members.

The proposed new entity will ask members, if they agree to the move, to cough up a percentage of their shares to buy the existing Credit Union’s loan book, assets and liabilities.

The current value of the loan book is still not publicly known.

Newbridge CU Action Group have retained the services of a “resolutions expert” – Greg Allen – to deliver an alternative plan for its future to the Central Bank in less than two weeks’ time.

The plan proposes that the 37,000 members of Newbridge CU will take on a potential risk themselves in order to keep the Credit Union in Newbridge.

All who want to become members of the new Credit Union would have to agree to this concept.

If so, a new credit union, with a new board of directors would be set up.

The basis of the plan, to be presented to the Central Bank, is that if Newbridge keeps a credit union in the town, members would get a better recovery than if it merges with Naas.

The strategy would focus on loan recovery or, put simply, recovering as much of the loan book as is possible.

All members will be asked to put up some shares – aka savings – as capital to cover losses.

However, the last say on this plan will lie with the Central Bank, who have already proposed a merger with Naas.

The figures for savings in the Newbridge Credit Union in 2011 amounted to €152 million, while in 2010, it was slightly higher – amounting to €163 million.

If the Newbridge CU Action Group’s proposal succeeds, any new entity will still require a multi-million-euro bailout.

However, the Action Group claims that this figure will still be less than what it will cost the taxpayer to merge with Naas.

Part of the strategy would be to keep the current building with a value-in-use of €15 million despite a current market value of €1.5 million.

The Leader understands it will also challenge current legislations to request the surplus to cover expenses be reduced from 10 percent to 7.5 percent.

Chairman, Willie Crowley said that the Group has “sufficient information to present an alternate resolution” but when pressed on the matter he claimed the “information was sensitive”.

The Group have also claimed that the total of all loans outstanding in NCU at end of September 2012 was €124 million, while the bad debt provision for the same time frame was €56 million, or 45 per cent of the loan book.

The issue of Newbridge Credit Union was hotly debated in the Dail last Wednesday, following a question raised by Kildare TDs.

It has furthermore 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, last 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 was 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.”

According to Mr Crowley, the Minister’s response to the call for his resignation was that he felt it was “harsh”.