08 Dec 2021

€43.5 million in savings transferred from former Longford Credit Union at beginning of 2020

Mullingar Credit Union remains in a strong financial position despite Covid-19 challenges

€43.5 million in savings transferred from former Longford Credit Union at beginning of 2020

Launching the Mullingar Credit Union Members’ Update Report at Longford branch were Melissa Rabbitt, Maeve Duffy, Helen Whitney and Nicola Burke Picture: Shelley Corcoran

The premises of Longford Credit Union reopened as a branch of Mullingar Credit Union on January 28, 2020. In mid-2016 discussions commenced with a view to a transfer of engagements from Longford CU to Mullingar CU.

And having received approval from the Central Bank of Ireland, both credit unions arranged concurrent AGMs for December 18, 2019 where the majority of members voted to proceed with the transfer.

Transfer documents were signed by the Registrar of Credit Unions on January 25, 2020, and on that date the members of Longford CU became members of Mullingar CU.

The transfer of the former Longford CU to Mullingar CU resulted in a significant increase in balance sheet assets and liabilities.
Savings increased during the year by €80.8 million of which €43.5 million arose from the transfer of savings of members of the former Longford CU.

Loans to members increased during the year by €11.2 million. Loans transferred from the former Longford CU amounted to €12.6 million.

Excluding the Longford transfer, outstanding loans to members fell by €1.4 million reflecting a very subdued demand for loans during 2020, particularly in the early stages of the Covid–19 pandemic.

Balances held in cash, accounts with Central Bank, bank deposits and other investments increased by €79 million with €36 million of this increase arising from the transfer of the former Longford CU investments and the remaining €43 million reflecting the increased levels of savings in the Credit Union during the year.

The provision for doubtful debts increased to €4.9 million from €3.3 million at the end of 2019.

Total reserves increased by €7.4 million to €51.3 million, €6.6 million of which resulted from the Longford Credit Union transfer of engagements.

Mullingar Credit Union keeping members informed
Normally at this time of year Mullingar Credit Union would be presenting members with their Annual Report and be preparing to hold their Annual General Meeting (AGM) which is usually held in December.

However, this year due to the current Covid-19 restrictions and public health guidelines, they are presently unable to host a physical, in person AGM.

In order to keep members informed and updated on the financial results and position of the Credit Union the Board of Directors decided to prepare and make available a Members’ Update Report which includes the audited Financial Statements for the financial year ended September 30, 2020.

In his statement to members Chairperson, Mr Paul Isdell, provided an update on the financial position of the Credit Union and set out the position as regards the holding of the AGM which is now expected to take place in the New Year following proposed amendments to Credit Union legislation to make provision for the holding of certain credit union member meetings by remote means.

Mr Isdell explained, “Credit Unions are regulated entities and many aspects of their operations, including the holding of general meetings of members, are governed by the Credit Union Act 1997 -2018.”

He continued by saying “the legislation makes no allowance for the holding of member meetings other than by traditional, in person means, which leaves us in this uncertain position. The authorities are working to rectify this and provide a solution for Credit Unions, which may allow virtual meetings if required or necessary.”

Mr Isdell outlined that this will require a change in legislation and the Government has indicated that this is considered a priority for enactment before the end of 2020, but that this cannot be guaranteed.

Mr Isdell said that, in the interest of keeping members informed, the Directors of Mullingar Credit Union took a decision to publish a report, which is available to members in all five offices and on their website, giving an update on the financial position of the Credit Union and an explanation regarding the holding of the AGM.

He said the full Annual Report including notice of the AGM will be published in the normal manner as soon as legislation allows.
Mr Isdell reassured members that Mullingar Credit Union remains in a strong financial position despite the challenges and disruption to normal activity brought about by Covid -19.

The Credit Union is reporting a surplus of €1.5 million for the financial year which is considered very satisfactory in the prevailing conditions.

He commented, “similar to many other businesses, we are experiencing challenges in our operations. In particular we are seeing a significant build up in savings, a subdued demand for lending and a very low return investment environment.”

He stated that in light of the uncertainty created by Covid-19, the Central Bank of Ireland has advised Credit Unions in the Republic of Ireland that they should not pay a dividend or interest rebate to members this year. Mullingar Credit Union will be adhering to this advice.

Mr Isdell concluded, “In the early stages of the pandemic the Government listed Credit Unions as an essential service and requested that as far as possible they continue to provide services to their members. I am pleased to say that all of the Mullingar Credit Union offices have remained open and available to our members throughout and I would like to thank our Members, Staff, Directors, Board Oversight and other Committees for the manner in which they have worked together during this period.”

A few points to note from the Directors report:

  • Total income for the year increased from €7.4 million in 2019 to €8.5 million in 2020. Income from loans to members increased by €932,000 in line with the increased level of loans outstanding.
  • Income from investments increased by €203,000. However, returns on investment are extremely low at the moment with negative rates being imposed by some institutions, particularly for short term liquid funds. This trend of lower investment returns is expected to continue for the foreseeable future.
  • Total expenditure increased from €5.1 million in 2019 to €6.9 million in 2020.
  • Bad and doubtful debts written off increased slightly from €407,000 in 2019 to €431,000 in 2020.
  • Recoveries from previously written off loans amounted to €438,000 during the year.
  • There was an increase in the provision for doubtful debts of €1,023,000 in the current year compared to a credit of €106,000 in 2019, reflecting increased provisions for loan losses that may arise as a result of members suffering loss of earnings as a consequence of COVID–19.
  • Staff related costs increased by €213,000 and other management expenses increased by €446,000, these increases include the operational costs of running the Longford branch office from February 2020.
  • A significant part of the other management expenses is the cost of insuring member savings and loans. This year the cost of this insurance was €778,000, an increase of €232,000 from 2019. This is due to covering the increased savings and loans values.
  • Overall, assets increased by almost €89 million of which €50 million arose from the Longford CU transfer. This build-up of assets is putting severe pressure on the Credit Union as we need to provide 10% of this, as a minimum, to Regulatory Reserves immediately and on an ongoing basis. Currently we are not generating a sufficient level of surplus for this purpose.
  • The Directors are confident that the sound financial position of Mullingar Credit Union will be maintained.
  • The Directors intend to further develop current activities and facilities over the coming years.

For further information please contact our office on 044 9348817,

To continue reading this article for FREE,
please kindly register and/or log in.

Registration is absolutely 100% FREE and will help us personalise your experience on our sites. You can also sign up to our carefully curated newsletter(s) to keep up to date with your latest local news!

Register / Login

Buy the e-paper of the Donegal Democrat, Donegal People's Press, Donegal Post and Inish Times here for instant access to Donegal's premier news titles.

Keep up with the latest news from Donegal with our daily newsletter featuring the most important stories of the day delivered to your inbox every evening at 5pm.