No ‘significant’ deposit changes at Newbridge after bailout
Politicians claim there has been a lack of transparency at credit union since last year
Newbridge Credit Union opened as normal this morning, following a last minute reprieve yesterday evening when the High Court, as a “matter of urgency”, agreed to the transfer of the loans and savings of the Kildare credit union to Permanent TSB.
Formerly owned and controlled by its members, Newbridge credit union will now be in the full control of Permanent TSB, although a group of activist members, Newbridge Credit Union Action, said it would lodge an immediate appeal to the High Court. The Action Group is holding a protest outside the credit union in Newbridge in opposition to the takeover.
The credit union, which has been in trouble since 2008, was at risk of going into liquidation if the transfer had not been approved the Central Bank moved on the situation yesterday in order to provide certainty.
It is understood that Permanent TSB did not actively seek out the transfer of loans and deposits but was asked to take on the business by the Central Bank.
Some €53 million will be transferred to Permanent TSB from the Central Bank’s €250 million Resolution Fund to help deal with the credit union’s problems.
In a statement this morning Permanent TSB told members of the credit union no action was required of them and it was business as usual at the Newbridge branch.
It said the bank would honour all deposits held with the credit union.
Applications for new loans and deposit accounts will continue to be accepted, while loan applications that were submitted recently and which are currently awaiting a decision will be processed as normal, the bank said.
The credit union has approximately 32,000 deposit accounts and 7,000 loan accounts. In 2011, total loans stood at almost €140 million.
It is understood that the move will involve no redundancies to the credit union’s 36 staff, who will now transfer to Permanent TSB, and the bank, which already has a branch in Newbridge, will keep the office open over the coming months and will announce more details in due course.
With regard to the credit union’s dividend policy, Permanent TSB said it will make a payment to members “in recognition of their support in recent months for their credit union during what was a period of considerable uncertainty”.
Permanent TSB group chief executive Jeremy Masding said the transaction would bring certainty and stability to the credit union’s members.
“We are bringing stability and management expertise to the significant financial challenges facing Newbridge Credit Union. We believe that the terms of the transfer will protect Permanent TSB bank from any financial risk in the transaction and this will enable us to focus our resources entirely on managing the credit union’s deposits and loan book,” he said.
At a meeting of the Credit Union Action Group, chairman Willie Crowley said it would seek legal advice on a potential action both in Ireland and Europe, once it had had a chance to examine documents from the Central Bank.