Highest level of new credit union lending in 14 years
Credit unions affiliated with the Irish League of Credit Unions (ILCU) reported the highest level of new lending since 2009 in the last year, the latest results for the group show.
In the 12 months to September, loan values were up by €555m. This brought the total ILCU loan book to €5.3 billion with much of the new lending accounted for by growth in the mortgage market.
At the same time, the level of arrears fell to a historic low of 2.7%, despite the backdrop of the cost of living squeeze and rising interest rates.
More than 420,000 loans were issued in the year to September by ILCU-affiliated lenders, which account for 92% of active credit unions in the Republic.
It brings the credit union share of the unsecured personal lending market to 40%, the report noted.
That saw the loan to savings ratio across the group increasing by 3 percentage points in the year to 35%.
Member credit union capital reserves stood at 15.8% at the end of September, which was ahead of regulatory requirements and up from 15.6% at the same time last year.
Asset values were almost 3% higher at €17.9 billion in the year to the end of September 2023 up from €17.4 billion at the end of September 2022.
“There has also been a surge in demand for credit union mortgages with the credit union sectoral mortgage loan book growing by an astounding 52% year on year to nearly €500 million,” David Malone, CEO of the ILCU said.
“Over 90% of new mortgage lending is dominated by the retail banks. However, credit unions have funds to lend and many are now offering fantastic mortgage rates combined with the personal touch of our staff supporting people making a life time decision to purchase a home,” he added.
The results were published as the Credit Union Bill passed all stages in the Oireachtas.
The aim of the legislation is to expand the credit unions’ range of services and to facilitate all members to access mortgages, business loans and current account services.
The law will also allow smaller credit unions that do not provide services such as mortgages or SME loans to refer members to branches that do.
David Malone said the legislation would help to expand the ILCU’s national reach in mortgages and commercial lending in particular.
“Importantly, it will also serve to provide much needed choice in the contracting financial services market and evolve to position credit unions as the leading financial services provider of choice for the public,” he said.
The legislation will now go to the President for final approval.