Plans for major merger of Midlands Credit Unions

The merger of two Midlands-based credit unions with St. Brigid's Credit Union in Clara could see the greatly expanded facility in control of assets worth in excess of €80 milion.

Both Ferbane and District Credit Union and Banager Credit Union have applied to St. Brigid's Credit Union in Clara for what is known as “a transfer of engagements” and the matter is due to be debated by members at the AGMS of all three credit unions, which will take place simultaneously tonight,Monday, January 22.

Talks on a possible merger between Ferbane and Clara credit unions began as far back as mid-2015 following the closure of the Ulster Bank branch in Ferbane, with Banagher coming on board a year later.

“Looking towards the future, I suppose we recognised in 2015 that if we wanted to expand and provide a better service to our members we would have to seek to become part of a bigger operation, so we approached St. Brigid's as we liked their ethos, rather than looking towards Athlone or Tullamore where we felt we would be in danger of losing our identity” explains Paddy Egan, Chairperson of Ferbane Credit Union.

Credit unions are under the control of the Central Bank and Paddy Egan says it is getting “harder and harder” for smaller credit unions to survive as a lot of the Central Bank policies favour larger financial institutions. “A lot of credit unions are merging around the country, so we feel that now is the right time for us to put a merger proposal before our members” he said.

While the Ferbane Credit Union Chairperson says there has been “very positive feedback generally” from members of all three credit unions to the idea of a merger, the issue will ultimately be decided on by those members at the AGMS's on Monday night next.

St. Brigid's Credit Union in Clara, which was established in 1963, and has a branch office in Moate, has assets of €62m, while Ferbane, which was set up in 1990, holds assets of €14.5m. Banagher was set up in 1984 and currently holds assets of €7.3m.

If the proposed merger gets the go-ahead, both Ferbane and Banager credit unions will retain their existing offices and will be branch offices of St. Brigid's. “From a members perspective everything will be the same” says Paddy Egan “and we will still keep our name over the door of our office in Ferbane, as will Banagher.”

However, the merger will allow both Ferbane and Banagher credit unions to offer enhanced services to customers, due to the considerable asset base. Among the changes planned are longer opening hours; increasing savings; death benefit insurance; foreign exchange and, in the longer term, the credit unions would like to move closer towards being in a position to enter the Irish mortgage market.

“For example, in Ferbane we had a cap of €30,000 on savings, so if a former Bord na Mona employee came in with a retirement lump sum of maybe €45,000, he wouldn't be able to put it into savings” says Paddy Egan “so a merger would allow us to increase our cap on savings, and we would also be able to consider giving members bigger loans.”

In their joint message to members, the Board of Directors of all three credit unions state that the proposed transfers arise from “the belief of the Board of Directors of all credit unions concerned that their members can be better served together, and we consider it an ideal opportunity to grow and develop our services to members in an enlarged and complimentary common bond.”

They further state that they are confident that the decision to join forces will “strengthen our position to be the most trusted, respected and preferred financial institution for our members, providing good value and a modern, accessible and tailored service.”

All three credit union AGM's take place at 8pm tonight with St. Brigid's taking place in Ard Scoil Chiaráin in Clara; Banagher in the Further Education & Training Centre and Ferbane in the local Heritage Centre.

If the merger plan is approved by members, it is due to be come into effect in the last week of February.