Credit unions to expand further into mortgage market

Ireland's credit union movement has taken a step to significantly increase its ability to expand further into the mortgage market in competition with the banks.

Twenty-six credit unions have received board approval to set up a services organisation which will lead to the establishment of centralised treasury function for the sector.

The credit unions have combined assets of €9 billion.

Last year, the Central Bank said credit unions would be allowed to increase the level of mortgage lending to 30% of their total assets.

But to reach that level the regulator said they would need a more sophisticated asset and liability management which has resulted in the planned centralised treasury function.

The initiative will also allow credit unions to offer more lending to small and medium sized firms.

John Webb, a former Treasurer of Ulster Bank, has been appointed acting CEO of the new initiative.

The move to create a Centralised Treasury Function has been led by five Credit Unions and is supported by the Irish League of Credit Unions and the Credit Union Development Association.

The project is open to all credit unions across the country.