The latest update on the financial situation of the Credit Union sector issued by the Central Bank should provide a positive context to the enterprise level pay talks which will shortly be undertaken by the Union, according to SIPTU Organiser Peader Nolan.
The update, ‘Financial Conditions of Credit Unions’, outlines a largely positive position concerning the fundamentals and trends in the sector. LTA (Loan to Assets ratio) has improved from 28.4% at year-end 2022 to 31% at end September 2023, the year-end reporting period for credit unions.
In absolute terms, total outstanding loans for the credit union sector now stand at €6.3 billion versus €5.6 billion at end 2022, up 12% year on year. Average reserves as a percentage of total assets in the credit union sector were at a very comfortable level of 16.2% as of September 2023.
The average rate of loan arrears is running at a very modest 2.7% of total loans, which represents the lowest level observed for many years. Sector profitability as measured by ROA (return on assets) is now running at 0.7% compared to 0.3% in 2022, a doubling of profits and back to levels last seen in 2019 before the pandemic.
Nolan said: “For several years we have been receiving bleak financial reports from the Credit Union sector and this has provided for a less favourable context to pursue pay talks in the individual enterprises. The latest data would seem to indicate that the sector has turned a corner, and this provides for a much more favourable position for Union representatives to seek significant improvement in pay over the coming months.”