A global financial services provider that insures almost 100 credit unions in Ireland has warned of closures in the Irish industry unless immediate changes are implemented.
At a conference in Dublin this morning Paul Walsh, chief executive of Cuna Mutual Europe described the Irish credit union movement as the "Cinderella" of financial services, and said it was the only part of the financial system "still intact". Mr Walsh predicted that credit unions will have a "bright future" but only if they change their current practices and collaborate on cutting costs and improving efficiencies.
"If they fail to seize this immediate opportunity, we unfortunately may see many credit union closures around the country," he said.
This warning comes after the registrar of Credit Unions James O'Brien said in a recent speech that an increasing number of credit unions are now regarded as 'high risk' due to the sharp rise in the level of arrears at many institutions, as well as potential solvency problems. A subsequent media report suggested that as many as 79 out of the country's 410 credit unions are at risk of closure.
However John Lass, senior vice president of corporate strategy of Cuna Mutual Group, told delegates at this morning's conference that Irish credit unions have the ability to achieve sustainable growth of 7.5 per cent per annum.
"The challenge and opportunity for credit unions is to balance the three keys to sustainability: governance, financial structure and value proposition," Mr Lass said.
The 'The Future Business Model for Credit Unions' conference was hosted in Dublin Castle by Cuna Mutual Group Europe, part of Cuna Mutual Group which has been operating in Ireland since 1963.
