A COLLAPSE in the volume of credit issued in Ireland last year resulted in a sharp decline in revenues and profitability at the Irish Credit Bureau, which is owned by the State’s main financial institutions.
Latest accounts for the bureau, which maintains a register of credit ratings of borrowers, show that its income declined last year to just under €6 million from €8.5 million in 2008.
Profit after tax almost halved to €2.9 million.
This was the result of “reduced enquiries” by members, who check a borrower’s credit rating before approving a loan.
The bureau collects information from the banks, tabulates it and then sells it back to the financial institutions, and to members of the public.
The decline in fees has continued into 2010 with revenues down 25 per cent in the first six months of the year, the accounts show.
“The rate of decline is down to about 21 per cent now,” managing director Séamus Ó Tighearnaigh told The Irish Times yesterday.
“The bigger picture is that people are less inclined to borrow at present and the banks have put in place tighter lending regimes. That’s the squeeze.”
Mr Ó Tighearnaigh said its 2010 profits would be in the same “neighbourhood” as last year as “our costs are down”.
“We’re certainly not going to make a loss,” he added.
Mr Ó Tighearnaigh also confirmed that the process to sell the bureau has been terminated.
The move to sell followed Bank of Ireland’s decision earlier this year to sell its 17 per cent stake in the bureau as part of an asset disposal programme agreed with the European Commission.
Reports suggested that offers submitted fell short of the valuation placed on the bureau by its shareholders, who include Mr Ó Tighearnaigh.
He declined to comment on the value of the business or on how much had been sought for the company.
“The sale process has been discontinued and we move on. We’re very confident about our future and what it holds.”
The bureau employed 18 staff last year while total employment costs were flat at €1.6 million.
