Credit Union sector achieves record financial results over past 12 months

Posted on: 06 Dec 2023

The Irish League of Credit Unions (ILCU), which represents 92% of the total active credit unions in the Republic of Ireland, has released the 2023 full year financial results for its member unions and broader analysis of the sector. The results show that credit unions have continued to deliver for members with a strong performance headlined by annual growth in the loan book of 12% while arrears fell to historic lows illustrating prudent management by credit unions.
 
For the full year to September 2023, loans were up €555 million, and the total ILCU credit union loan book now stands at €5.3 billion (up from €4.7 billion a year ago).  
 

ILCU Credit Union Members – Financial Performance

The results for the year ended September 2023 show the highest new lending total since 2009 and the highest average new loan size. Credit unions have continued to increase their market leading share to over 40% of the unsecured personal loan market. Loans are typically used to help with household improvements, to retrofit homes, buy a car, pay for a wedding, cover medical costs etc. Over 420,000 loans were issued in the year to end September 2023. This equates to over 8,100 new loans per week, 35,000 loans per month to the value of €49.6 million per week or €215 million per month.
 
In the year to end September 2023, the overall arrears ratio is down to 2.7%. The ratio is now at a new record low, down from 2.8% recorded in September 2022 and is the lowest across the financial services sector.
 
ILCU member credit union capital reserves stand at 15.8% at end September 2023, comfortably ahead of regulatory requirements and are up from 15.6% at end September 2022.
 
ILCU member credit union assets are up 2.8% to €17.9 billion in the year to end September 2023 up from €17.4 billion at end September 2022. The asset size of the credit union sector in Ireland has grown at a phenomenal rate and has more than doubled over the last 20 years.
 
Loan to savings ratio has climbed to over 35% at the end of September 2023, the highest level since 2013 and compares to 32% at end September 2022.
 
Membership of ILCU affiliated credit unions also continues to increase. It currently stands at 3.2 million members in the Republic of Ireland and is increasing steadily at a rate of 1,000 new members per week.
 

Mortgages – Credit Union Sector

The past twelve months have seen a surge in public demand for credit union mortgages with overall sectoral lending increasing by over 50% to almost €500 million. This has been driven by credit union lending capacity, competitive rates and the ability to provide competition as an alternative to the three main retail banks.
 
David Malone CEO of the Irish League of Credit Unions welcomed the results and stated;
 
“The 2023 financial results for ILCU member credit unions show a clear growth trajectory. Annual lending growth is now at a 10 year high of 12% and our market share of the unsecured personal lending market has increased to a phenomenal 44%. This growth has been achieved with sound prudent management maintaining record low arrears of 2.6% and increased capital reserves well in excess of capital requirements.
 
There has also been a surge in demand for credit union mortgages with the credit union sectoral mortgage loan book growing by an astounding 52% year on year to nearly €500 million. Over 90% of new mortgage lending is dominated by the retail banks. However, credit unions have funds to lend and many are now offering fantastic mortgage rates combined with the personal touch of our staff supporting people making a life time decision to purchase a home.
 
While our financial numbers are impressive, we evaluate our performance on the quality of our services, our trust and our reputation.  We provide people with solutions to sustain a good quality of life. One that allows them to live their life on their terms. One that they trust. We are a financial movement that is digital when you want it but importantly, human when you need it.
 
Looking ahead to 2024, the new ground breaking credit union legislation which has now passed final stages in the Dail will build on our growth, increasing our national footprint in mortgages and commercial lending. Importantly, it will also serve to provide much needed choice in the contracting financial services market and evolve to position credit unions as the leading financial services provider of choice for the public”.
 

ENDS

Notes to Editor
Key 2023 financial performance indicators of ILCU member credit unions.

• Total Assets up 2.8% year on year (y-o-y) to €17.9 billion (€17.4 billion September 2022).

• Total Reserves up to 15.8% (15.6% September 2022).

• Total Loan book up 11.7% y-o-y to €5.3 billion (€4.7 billion September 2022).

• Average new loan size up 14.9% to €6,107 (€5,316 Septembr 2022).

• Average mortgage amount issued up 21.6%.

• Total Commercial loan book up 12% to €152 million (€136 million September 2022).

• Average Commercial loan up 9.3% to €21,232 (€19,432 in September 2022).

• Loan arrears fell to 2.7% (2.8% September 2022).