Bad debt provision at credit union now €14m

NEWBRIDGE CREDIT Union increased its provision for bad and doubtful debts to €14 million as at the end of September 2009, compared to €5 million a year earlier.

Bad debts totalling €1.46 million were written off, compared to €534,163 the previous year.

The credit union, which is holdings its annual general meeting this evening, has recently sent out its accounts to members following a delay caused by queries from the office of the Regulator for Credit Unions.

A spokeswoman for the regulator said the issue had to do with the accounts rather than the solvency of the credit union, which she said was not a difficulty.

The credit union would be proposing a dividend at its agm, she said.

The credit union had total assets of €214 million and total liabilities of €189 million at year’s end, making for a net worth of €24.3 million.

Statutory reserves increased to €21.29 million from €14.7 million, while other reserves fell to €3 million from €17.95 million.

Tangible fixed assets at €16.6 million were similar to those of a year previously, when they were €16.99 million.

The accounts show that the freehold property element of this fell only slightly in value during the year, to €16 million, from €16.36 million.

The accounts say the value of the property was assessed by two professional valuers, Remax Achievers and Jim Payne Associates, in November 2009.

New loans granted during the year were €30 million, down from €56 million the previous year.

However, the level of loans out to members remained constant, at €145.5 million compared to €145.4 million the previous year.

Chairman Bill Donnelly, in his report with the accounts, said the increases in the doubtful debt provisions and the reserves left the credit union in a strong position to face any future economic uncertainty.

The return to members would be lower than in previous years due to economic circumstances and regulatory constraints, he said.

Management expenses showed that legal, professional and management expenses jumped to €274,405 from €39,352.

In a letter announcing the date of the annual general meeting, the credit union said the delay was caused by an internal review held to ensure “the current economic environment was fully reflected in our reserving policies.”

It said the credit union remained one of the top five of the 400 credit unions in the State, in terms of size, success, liquidity and security.

The officers reaffirmed the “absolute financial stability” of the credit union. Dividends are to be paid tomorrow.

The new Financial Regulator, Matthew Elderfield, is to take on the duty of credit union regulator from next year, pending the appointment of a replacement for Brendan Logue, who is retiring at the end of this year.