Ireland’s credit union sector has taken a significant move to considerably expand its foothold in the mortgage market, putting it in greater competition with traditional banks.
Twenty-six credit unions have received board approval to establish a services organisation, which will lead to the creation of a centralised treasury function for the sector, reports RTE.
The combined assets of these credit unions total €9 billion.
Last year, the Central Bank announced that credit unions would be permitted to raise their mortgage lending levels to 30% of their total assets, reports RTE.
However, to achieve that threshold, the regulator indicated that a more advanced approach to asset and liability management would be required, which has led to the planned centralised treasury function.
The initiative will also enable credit unions to provide greater lending support to small and medium-sized businesses, reports RTE.
John Webb, a former Treasurer of Ulster Bank, has been appointed as acting CEO of the new initiative.
The drive to establish a Centralised Treasury Function has been spearheaded by five credit unions and is backed by both the Irish League of Credit Unions and the Credit Union Development Association, reports RTE.
The project is open to all credit unions throughout the country.
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