Thematic review of restructuring in the credit union sector

21 February 2019 Press Release

Central Bank of Ireland

  • Restructuring has transformed the sector, reducing by half the number of smaller credit unions, whilst almost doubling the number of larger credit unions.
  • Credit unions involved in restructuring marginally improved their financial position and performance.
  • Restructuring remains a strategic option for consideration by credit unions of all sizes.

The Central Bank of Ireland today publishes a thematic review of restructuring in the credit union sector. The report analyses the transformational impact of restructuring on the sector generally, as well as on membership, business locations and financial position and performance.  The pace of restructuring increased from 2013 supported by the Credit Union Restructuring Board (ReBo), and continues today with oversight from the Central Bank, as regulator, following the conclusion of ReBo’s mandate. 

Since 2013, transfers of engagements between credit unions have taken place in almost every county, with over 420,000 members moving to larger credit unions, the majority of whom operate from multiple business locations today. The report notes that 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. This provides a strong base for the future development of the sector.

The report concludes that restructuring can help credit unions to realise cost savings by eliminating duplicated costs and achieving scale economies. When setting their business strategy, the boards of credit unions should be mindful of the potential opportunities that restructuring can offer to their credit union and its members.

Key findings of the report include:

  • From January 2008 to September 2018, 154 individual transferor credit unions completed a transfer to another credit union, with 135 of these transfers occurring since 2013.
  • 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 the majority of transfers completed (77%), the number of business locations were not reduced following the transfer.
  • Restructuring was the primary 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).
  • Transferee credit unions have delivered higher loan growth than the rest of the sector – an increase of 7.4% compared to a decrease of 0.8% across other credit unions.
  • Transferee credit unions have also experienced a lower level of increase in operating costs by eliminating duplicated costs and achieving scale economies.
  • With higher loan growth and lower increases in operating costs, transferee credit unions exhibit lower cost to income ratios and marginally higher returns on assets. However, cost to income ratios remain high and return on assets remain low across the sector when compared to historical levels.

Commenting on the report, the Registrar of Credit Unions Patrick Casey, said:

“Since 2013 restructuring has transformed the sector, as credit unions transferred to become part of larger, stronger credit unions, with multiple business locations. 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. 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.”


  • A ‘Transfer of Engagements’ is the process used to transfer the assets, liabilities and operations of one or more credit union(s) into another credit union. Under credit union legislation, Transfers of Engagements must be confirmed by the Registrar of Credit Unions, and all assets and liabilities are transferred on the date the transfer is confirmed. Members of the transferor credit union (the credit union transferring its engagements) become members of the transferee credit union (the credit union accepting the transfer of engagements) on the date of confirmation.
  • The Credit Union Restructuring Board (ReBo) was formally established on a statutory basis by the Minister for Finance in January 2013 to assist and oversee the voluntary restructuring of the sector on a voluntary, incentivised and time bound basis. By the time ReBo ceased its restructuring operations on 31 March 2017, it had supported a total of 117 transfer projects, of which 82 had concluded.