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Over €31 million in deposits were taken from Newbridge CU in 18 months

New documents released by the Central Bank show that a number of the loans at the credit union were in danger of failing.
Dec 12th 2013, 9:14 AM 7,345 30

ALMOST HALF THE loans held at Newbridge Credit Union was in danger of default in March this year, new figures have shown.

Documents released by the Central Bank paint a picture of an institution lacking confidence and haemorrhaging deposits in the months before the credit union was taken over by Permanent TSB, at a cost of €54 million to the taxpayer.

In an affidavit sworn by a Central Bank staff member, the credit union’s reserve ratio is put at just half a per cent of lending. The regulatory requirement is ten per cent, meaning Newbridge had a deficit of around €13 million.

Struggling loans had increased from 14 per cent in September 2010 to almost 50 per cent by March this year.

A special manager had been appointed to the credit union in January 2012, but regulator’s still feared a run on deposits, which materialised over time.

In September 2011, the documents show, Newbridge had over €49 million in deposits. In March of this year, just 18 months later, that had dwindled to just under €18 million.

In a report to the Central Bank, Special Manager Luke Charleton “about six years” to restore capital to a regulatory minimum, without availing of government funding.

Dubbed “Project Tokyo”, Charelton’s report shows that 80 per cent of the loan book was in some level of arrears and a discrepancy of €13 million between the credit union’s valuation of their building and that of their auditors.

Read: Gilmore: Newbridge Credit Union is a one-off case

Read: Provisional meeting scheduled between Siptu and PTSB over Newbridge Credit Union

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Paul Hosford

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