Irish Credit Bureau faces €1.84m redundancy costs as liquidation looms

The Irish Credit Bureau (ICB) recorded a €1.84 million charge last year to cover planned redundancy payments to its staff of about 15 as it prepares to go into liquidation after ceasing its credit referencing service last month.

The ICB, which dates back to 1963, warned repeatedly in annual reports in recent years that its future is “uncertain”, after the Central Bank’s new Central Credit Register (CCR) was set up and started collecting credit information and issuing credit reports to lenders in 2017.

The decision to stop providing services from October 1st was made four months ago after larger users indicated they intended to stop using it. However, the redundancy cost was booked in last year's accounts, co-signed by chief executive Mary Leonard on July 22nd and filed with the Companies Registration Office this week.

The redundancy charge, together with a €90,000 fine from the Data Protection Commission for a data breach, alongside a 28 per cent slump in revenues last year, to €4.5 million, pushed the company into a net loss of €146,361 for the year, compared to a €3.4 million profit for 2019.

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The revenue decline was driven by a drop in credit checks as consumer lending plummeted during the Covid-19 crisis and an increasing number of financial firms terminated membership agreements to rely on credit reports from the Central Bank’s alternative register to support lending decisions.

Bid approach

The company was the subject of a failed sale process in 2010 at a time when its shareholders were looking for €100 million for the business. It also received a bid approach last year. That proposal was said to have valued the business at about €4 million but did not lead to a deal.

The Data Protection Commission fine, publicised in May, stemmed from a computer code change in 2018 that contained a technical error. It resulted in the ICB’s database inaccurately updating the records of 15,121 accounts over the course of two months that year.

It disclosed 1,062 inaccurate account records to financial institutions or data subjects before fixing the issue.

AIB is the biggest shareholder in the company, with a stake of about 18.6 per cent. Bank of Ireland has a 17.4 per cent stake, while Ulster Bank owns about 15 per cent. Fexco owns 12 per cent.

The ICB paid €1.4 million in dividends last year, down from almost €1.9 million a year earlier. It had reserves of €3.8 million and €5.5 million of cash and short-term deposits as of December.

The company will be put into voluntary liquidation “in due course”, the report said.