Mortgage lending by credit unions has grown by over 60% over the last year and now accounts for 10% of the total value of all loans issued by these community financial institutions, the Irish League of Credit Unions (ILCU) has said.
In its latest results for the period April to June, the ILCU said mortgage lending increased by 10% compared to the first three months of this year bringing the total lent out by members to €518m. As of the end of June 2023, the total value of all mortgage lending by ILCU members stood at €320m.
The ILCU represents 90% of the total active credit unions in the Republic of Ireland. Chief executive of the ILCU David Malone said these results “highlight the continued astounding momentum of credit unions”.
“Mortgage lending continues to grow apace. Credit unions are providing much-needed competition and customer choice in the hyper concentrated mortgage market,” he said.
Credit unions are limited by regulations as to how much they can lend in respect of mortgages with Mr Malone saying they actively prohibit competition. He said that changes need to be made to these regulations by the Central Bank of Ireland.
“Given the clear demand for mortgages and credit union services overall, changing the lending limits will offer an immediate and tangible benefit to aspiring homeowners across Ireland,” he said.
In the year to the end of June, new loans issued by ILCU members increased by 12.7% to €2.78bn with the total value of loans outstanding increasing 12.8% to €5.74bn. These results mark the 13th consecutive quarter of sustained lending growth by credit unions across the country.
Between April and June, 110,000 new loans were issued by credit unions — a 21% increase on the previous three months. Over the 12-month period, more than 424,000 new loans were issued.
The average loan is now for the first time over €10,000. In addition to the increasing level of lending, arrears are at record lows of 2.54%.
The value of all assets held by ILCU members now stands at €18.33bn — an increase of €450m year-on-year. The total value of savings with credit unions has increased to €15.3bn, up 2.1% compared to last year.
THE ILCU said these latest results “demonstrate a well-rounded performance” with both traditional and digital channels contributing to credit union success.
On top of lending, credit unions processed eight million electronic payments of which 58% were card-based and the rest were SEPA transfers. This is an overall increase of almost 16% when compared to the period last year.
Over the past 12 months, there have been 14.1 million digital transactions conducted by credit union members, which is a 30% increase year-on-year, with a total value of €2.3bn.
“Credit union digital transactions have increased fourfold in the last five years. These results highlight an increasing shift of members accessing everyday banking services digitally through their credit unions,” Mr Malone said.