Athlone Credit Union confirms plan to merge with Castlerea
Athlone Credit Union is working towards a merger with Castlerea & District Credit Union in Roscommon, with the aim of having it completed, and a new combined 'Athlone and Castlerea Credit Union' in place, by next February.
Michael Evans, the CEO of Athlone Credit Union, said discussions between the two organisations began approximately two years ago, and that the Central Bank of Ireland has given its initial approval for the merger plan.
Athlone is the larger of the two entities, a fact underlined by their respective staffing levels. There are 28 credit union staff working across three offices in Athlone (Northgate Street, Irishtown and Monksland), compared with six staff at Castlerea Credit Union.
Mr Evans explained that mergers, or transfers of engagement, have become increasingly common in the credit union sector in recent times
"At the level we are at in Athlone we can offer services like current accounts, but Castlerea wouldn't be allowed to do that because they don't have the scale," he said.
"By coming together, we can do more things, offer more services to more members, and become more involved in collaboration and joint initiatives.
"So transfers of engagement and mergers are happening in the credit union sector and indeed are being encouraged by the central bank because there are a lot of efficiencies that can be created as a result."
He said the merger would mean Castlerea would also be able to offer a number of services it doesn't currently provide, such as current accounts, mortgages, and farm lending, and it would also be able to avail of the "enhanced digital offering" in which Athlone has invested.
Mr Evans said that as part of the merger there was a commitment to retain Athlone's two public credit union offices, in Monksland and at Irishtown Central, Golden Island, as well as the Castlerea office.
"With bank branches closing around the country, the Ulster Bank and Bank of Ireland closing branches, Castlerea might have been afraid that their branch would close, but no, there is a commitment to keeping branches open.
"Our commitment would be to have at least three offices, with Monksland, Irishtown and Castlerea, that are fully staffed, face-to-face, and member-facing."
He said that as part of the merger process there were likely to be some voluntary staff redundancies, but there would be no compulsory redundancies.
"We are fortunate to have energetic teams in both places," said Mr Evans. "As part of any merger process, there will be opportunities for voluntary redundancies.
"We expect that there may be a few people who will avail of the opportunity to exit. But we are not there yet, and at the moment we are going through a recruitment process and are constantly looking for qualified people."
He emphasised that the merger deal would be contingent on approval by the members of both credit unions.
He said legal representatives on both sides were currently working through a 'due diligence' process in respect of the merger and that a detailed business case would then be presented to the Central Bank for approval.
"We then have to go to the members, to look for members' permission. We'll probably try to do that in conjunction with an AGM, and then after that we complete the merger process.
"We will certainly be very upfront about everything we're doing, and we'll ensure that the members have an opportunity to ask questions and get answers."
Following the merger, the AGM of the new entity will rotate between Athlone and Castlerea, and it may also be held virtually.
While there will be some one-off merger costs for both credit unions, Mr Evans said it was envisaged that the combined operating costs would be reduced when the process is complete.
It's expected that costs will be saved through the use of only one IT system, one external auditor, one internal auditor, one strategic plan, one business continuity plan, one risk management officer, and one compliance officer.