Mortgage lending by credit unions up 34% on foot of homebuyers seeking alternatives to banks
credit unions
increased by 34 per cent to €632 million in the three months to the end of March compared with the same period last year as consumers increasingly turn to finance buying a home.
The Irish League of Credit Unions
(ILCU), representing 90 per cent of credit unions, has published its quarterly results which show continued growth by credit unions, with further expansion in
mortgage
lending.
Credit unions issued loans
to the value of €685 million in the period, which was up 11 per cent on the previous quarter. Yet new lending in the year to the end of March was up just 0.3 per cent to €2.75 billion compared to the previous 12-month period.
The total credit union loan book now stands at €6.08 billion, which is its highest point since 2008. That figure was up 2.1 per cent on the previous quarter and 9.3 per cent year-on-year.
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The results show mortgage lending continues to be a growing part of the sector's loan book, increasing to €632 million, which represents a 5 per cent increase on the previous quarter and growth of 34 per cent over the previous 12 months.
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Credit union mortgages jump more than 40% by value as sector eyes new lending rules
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Mortgages represented 10.4 per cent of the credit union loan book at the end of the quarter, a figure that was up from 8.5 per cent on the same period a year earlier and 5.7 per cent on March 2023.
ILCU chief executive David Malone said the group was 'eagerly awaiting' changes to the Central Bank's lending rules, which could see credit unions expand their mortgage loan portfolios to more than €5.5 billion from the current cap of €1.9 billion.
'This would enable credit unions to meet the growing demand from members for credit union mortgages and ultimately help more people achieve home ownership,' he said.
The average loan outstanding is now at a record high of €10,617, up from €10,387 in the previous quarter. The growth in overall lending is in the context of close to record low arrears of just 2.37 per cent.
'Surpassing the €6 billion mark in our loan book for the first time since 2008 is a significant milestone and the consistent growth in mortgage lending shows that members are increasingly turning to credit unions for long-term financial needs,' said Mr Malone.
As well as the growth in lending, there has been continued growth in savings, which now stand at €15.7 billion, which represents growth of 1.6 per cent in the quarter and 3.6 per cent since March 2024.
There are now 3.3 million credit union members, up more than 15,000 in the quarter and 37,000 across the past 12 months.
In addition, more credit union members are applying for their loans digitally, with more than half of all member loan applications originating online.
Credit unions processed in excess of 8.8 million debit card payments in the three-month period, which was an increase of 10 per cent on the same period last year. Of these payments, 59 per cent were contactless.
Looking at the data on an annual basis to March, debit card payments totalled 33 million, which was a 13 per cent increase.
'Credit unions now provide digital services on par with larger financial institutions,' said Mr Malone, who added they are continuing to invest in technology.
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