2 weeks Ago
Two large credit unions are planning a merger, in a move that will create the largest lender in the sector if it goes ahead. Progressive Credit Union, which has members in most of north county Dublin all the way to Fairview in Dublin city, and Drogheda Credit Union, are in talks to merge. The combined entity would have an asset size of €615m and would be regarded as a “super credit union”.
It would have 120,000 members if the merger is approved by the Central Bank. Some larger credit unions already offer mortgages, but each has a different interest rate Both the Government and the Central Bank have a policy of encouraging credit unions to merge to create financially stronger units. It comes as credit unions have joined forces to take on the banks on mortgages.
They are to jointly offer mortgages from next month in a move that is set to deepen the sector’s influence in the home loans market. Some larger credit unions already offer mortgages, but each has a different interest rate. The new product, Credit Union Mortgage, means there will be a standardised national mortgage, with a set interest rate.
Mortgage stock image Chief executive of Drogheda Credit Union, Tom Kiely, said: “Drogheda and Progressive have entered discussions with a view to a transfer of engagements between the two credit unions.” If the merger goes ahead, it will create the largest credit union in Ireland in terms of asset size. Drogheda has 60,000 members and €385m in assets.
It has five offices – two in Drogheda, one in east Meath, one in Dunleer and one in Trim. Mr Kiely said the merger was at the early stage, and the Central Bank has recently been notified. It could take up to a year for the transfer to be finalised.
Drogheda Credit Union has also entered into merger talks with nearby Slane Credit Union. Slane has 3,600 members, with assets of around €19.5m.
Sean Staunton, chief executive of Progressive, said: “If the merger happens, it is expected to be the largest credit union in Ireland, in the absence of another merger elsewhere in the meantime.” Progressive has around 60,000 members and over €230m in assets. “We are in very early stage talks at the moment but both credit unions have informed the Central Bank of Ireland and expect to engage with the Central Bank regarding the potential merger,” Mr Staunton said.
Progressive grew out of a series of mergers between the lenders in Skerries, Donabate, Balbriggan, Howth-Sutton, River Valley and Rathingle, Baldoyle-Portmarnock, Clontarf, East Wall, and Fairview. It operates also in Dublin city and covers Ballymun. Progressive hit the headlines a few years ago when it stepped in to fill the void after the forced shut down of scandal-hit Rush and Lusk Credit Union.
Rush’s former manager Anne Butterly was jailed for stealing €875,000 from the lender. She was released from prison after three months and has since died. Progressive previously abandoned plans to merge with Core Credit Union, operating in south Dublin.
Other big credit unions include St Raphael’s Garda Credit Union, St Canice’s in Kilkenny, Savvi in Dublin, and St Paul’s Garda Credit Union. Credit unions collectively have around three million members in the State, and assets of more than €18bn. They are regarded as the sleeping giants of the financial sector.
However, they are increasingly becoming more powerful. Recent legislative changes, due to come into effect by the end of summer, mean credit unions will be able to almost triple their mortgage lending..
