Tipperary Credit Union Year in Review 2011

Tipperary Credit Union held its AGM on Tuesday the 6th of December 2011 in the Ballykisteen Hotel. Over 90 members attended and below is a report from Pat Shanahan CEO Tipperary Credit Union Limited.

We are all living in difficult times. Now more than ever, Credit Unions have a major part to play in people's lives. The job of the Board of Directors and Management of Tipperary Credit Union is to ensure that members are confident in their Credit Union; confident that their Credit Union is financially strong and well managed; confident that their Credit Union is open for business and there when the need arises. As with other financial institutions, Credit Unions depend on public confidence for their success. Members need to be assured that their savings are safe. Tipperary Credit Union is doing well and is recognised as being a strong Credit Union, well run, and capable of meeting the challenges that lie ahead. Member's Savings are totally secure within Tipperary Credit Union.

Our Credit Union achieved a surplus of €1.3 Million for the year to the 30th September 2011. This was after significantly increasing our provision for bad debts, which was considered prudent by the Directors in light of the worsening economic climate and as a protection mechanism for our Credit Union. We also wrote down the values of our properties to reflect current valuations.

Total Assets of the Credit Union were €93 million at the 30th September 2011. Our Reserves are strong and at €13.6 million represent 14.7% of Total Assets, well ahead of the minimum Regulatory requirement of 10% of Total Assets..

Tipperary Credit Union is not currently subject to any Regulatory Lending restrictions and continues to lend in accordance with its own lending policy, the Credit Union Act, 1997 (as amended) and other lending guidelines. The vast majority of our members are honouring their loan repayment commitments and repaying their loan as agreed. Arrears are low and well under control.

Unfortunately the recession had a negative impact on our lending figures for 2011. We lent a total of €12.8 million in 2011 as compared to €14.4 million in 2010 and €16 million in 2009. Lending was down in all categories. We would like to reassure members that we have money to lend out. We are actively lending and very much open for business; however we can understand some members' reluctance to borrow in the current climate.

The key requirements in getting a loan from Tipperary Credit Union are (A) The purpose of loan (B) The member's income and ability to repay (C) The member's credit worthiness and record, and (D) Security, if required.

Our overall membership has grown to 18,058. Members' savings were €78.8 million at the year end. Remember, all savings are individually guaranteed by the Government's Deposit Guarantee Scheme up to €100,000 per member.

A 1% Dividend on members' savings was approved by members at the AGM. This is an excellent return on 'demand' savings, when compared to the return the Banks are offering. A 5% rebate on loan interest paid was also agreed.

The focus of the Government, Central Bank and Regulatory Authorities has turned to Credit Unions in recent months, now that the Banks have been dealt with. In May 2011, the Government established a Commission on Credit Unions to review the future of the Credit Union movement and make recommendations in relation to the most effective regulatory structure for Credit Unions, taking into account their not-for-profit mandate, their volunteer ethos and community focus, while paying due regard to the need to fully protect depositors savings and financial stability.

The Commission produced their interim report in early October 2011. They concluded that "The Credit Union Sector in Ireland continues to play a crucial role in helping to meet the financial, economic and social needs of many people and their communities. While the challenges faced by the Credit Union sector are significant, they are far from being insurmountable. A strengthened and revitalised sector can be in a position to play an increasing role in the retail financial landscape".

Many Credit Unions, including ourselves, are doing well, are financially strong and are well managed. Unfortunately, there are a number of Credit Unions in trouble and need help. The 408 Credit Unions currently in existence in the Republic of Ireland will shrink over time as mergers, acquisitions and take-overs take effect. This process has already begun. The Commission will examine options for restructuring the Credit Union Sector and will bring forward detailed recommendations this spring. Clear distinctions will be made between Credit Unions that are 'viable' and those that are 'not viable'. Huge focus will come on 'risk management' and 'regulatory compliance'. It is also likely that increased prudential controls, limits, standards and administrative sanctions will be introduced. Tipperary Credit Union looks forward to the challenge

Tipperary Credit Union adopts a rigorous training programme for its staff and volunteers. We have adopted the minimum competency requirements, which requires all staff and volunteers who are actively involved in Financial Services, specifically insurance type products, to be adequately experienced, qualified, and trained. Six staff members are currently Qualified Financial Advisors (QFA's) of which five staff members are also Qualified Credit Union Advisors (CUAs). In addition, Sixteen Staff members hold the Advanced Certificate in Credit Union Practice (ACCUP). Seven Directors, Two Supervisors and three Branch Volunteers also hold the ACCUP qualification.

The next few years will be difficult for all of us. The challenge for Tipperary Credit Union is to continue to satisfy our member's financial requirements, be financially sound, and continue to grow and prosper. We have survived for over forty years, through good times and bad times and hopefully we will continue to be there for our members for many years to come.

We welcome all of our new members and encourage you to participate fully in Tipperary Credit Union. We remember past members and those we have lost.

From the staff and volunteers, we wish everybody a happy, prosperous and safe new year

 Thank you

Pat Shanahan

Chief Executive Officer

Tipperary Credit Union Limited