The transfer of assets, liabilities and operations between credit unions have taken place in almost every county since 2013, a new report from the Central Bank shows.
The Central Bank's thematic review of restructuring in the credit union sector shows that over 420,000 members have moved to larger credit unions, most of whom operate from multiple business locations today.
Restructuring has had a positive impact on the financial position and performance of credit unions as transferees, with higher lending growth and lower growth in operating costs, the Central Bank stated.
This provides a strong base for the future development of the sector, the bank added.
Today's report analysed the transformational impact of restructuring on the credit union sector generally, as well as on membership, business locations and financial position and performance.
According to the report, from January 2008 to September 2018, 154 individual credit unions completed a transfer to another credit union, with 135 of these transfers occurring since 2013.
It said that while the number of registered credit unions has reduced by 35% since 2013, there has only been an 8% reduction in the number of business locations.
In 77% of transfers, the number of business locations were not reduced following the transfer.
The report also noted that restructuring was the main driver in a 58% reduction in the number of smaller credit unions (assets of less than €40m) and a 93% increase in larger credit unions (assets of more than €100m).
The Registrar of Credit Unions at the Central Bank said today's report highlights that credit unions that have completed transfers are delivering higher lending growth and improved cost to income metrics compared to peers.
"When setting strategic objectives, boards of all credit unions should consider the findings of this report and the potential strategic opportunities that restructuring can present," Patrick Casey said.
"We continue to encourage credit unions to consider restructuring as a strategic opportunity in service of enhancing member services, in achieving scale efficiencies and in consolidating strength in reserves," Mr Casey added.
Kevin Johnson, CEO of the Credit Union Development Association, said that credit unions have significantly strengthened their governance and controls while undertaking this considerable consolidation over the last five years.
"The credit unions' commitment to being the heart of local financial services is demonstrated by the 154 mergers only needing 8% of branch closures, while some new outlets are being planned and a range of new digital channels have been added for members to engage with their credit union," he added.
