Makhlouf urges credit unions to restructure and build scale

11 November 2023 Press Release

Central Bank of Ireland

Governor of the Central Bank of Ireland Gabriel Makhlouf this morning (Saturday) addressed the Irish League of Credit Unions conference – Unlocking the Power of Credit Unions.

Speaking at the event, Governor Makhlouf said: “The Credit Union Amendment Bill provides a significant opportunity for the credit union sector to transform into a community based provider of universal retail banking products and services.

“However, to achieve this, the sector must be prepared to embrace change.

“Restructuring has already resulted in significant beneficial change, including more business and home lending. 

“With the knowledge that restructuring delivers good outcomes, and given the transformation and change that is happening in financial services, we at the Central Bank urge all credit unions – small, medium and large – to consider, or perhaps re-consider, the strategic opportunities that restructuring offers to achieve greater efficiency, build resilience, and build scale. We support larger asset-sized restructuring solutions to build scale, as well as the continuation of transfers between medium and smaller asset-sized credit unions.

“The process can be challenging, perhaps even daunting. But I believe that those among you who have undertaken such a change would encourage your colleagues to embrace the opportunity.

“We in turn welcome the opportunity that the new Bill provides smaller credit unions, who choose to remain standalone, to collaborate and refer business to other credit unions, so that all members of any credit union can gain seamless access to the broader range of services that are now being provided within the sector, such as current accounts.

Speaking in relation to credit union lending, Governor Makhlouf commented: “Significant capacity exists within the existing limits for further home and business lending. At end September 2023, there was total capacity of €2.1bn should all large credit unions take advantage of the increased lending limits available to them.

“Regretfully, there has not been a significant take up of these increased limits. Of the 67 larger credit unions, only 12 have applied for the increased lending limits, and of these 12, nine have already been approved.

“The credit union sector has significant funds to lend.  I urge you to utilise the capacity that exists within the existing house and business loan limits, and develop appropriate strategies to grow your loan books prudently. While you are achieving growth, the loan to asset ratio in the credit union sector at 30% remains close to historically low levels.

“And when the loan limits have been utilised, or near-utilised, we will ensure that the regulatory framework, including the loan limits, remain appropriate.”

Concluding, Governor Makhlouf said: “You don’t need me to tell you that you are starting from a good place. Year after year, the credit union sector comes out on top in studies on corporate reputation.[1] Your brand is known, and is strong. I know that key contributors are the sector’s human, friendly and authentic service. Others in the financial system should take note.”


Notes to Editors

The full text of Governor Makhlouf’s speech is available on our website 

[1] See RepTrak