Newbridge Credit Union Bailed Out

bear1 · 12-11-2013 03:17PM

I wonder though, does the PTSB figure of €54 million include any element of loan guarantees or is it just a straight cash payment?

http://www.thejournal.ie/ilcu-denies-any-capitalisation-problem-in-ireland-1171420-Nov2013/

If they are well financed as mentioned above, what was the need of us having to fork out another 54 mill then?

Anyone · 12-11-2013 03:35PM

bear1 wrote: »

I wonder though, does the PTSB figure of €54 million include any element of loan guarantees or is it just a straight cash payment?

http://www.thejournal.ie/ilcu-denies-any-capitalisation-problem-in-ireland-1171420-Nov2013/

If they are well financed as mentioned above, what was the need of us having to fork out another 54 mill then?

The 54m is for Newbridge, the other link refers to the report stating 100 credit unions are at risk. And its a straight cash injection of 54m into the balance sheet to prop up the reserves of Newbridge prior to the transfer.

bear1 · 12-11-2013 03:36PM

Ah ok thanks for the clear up

MadsL · 12-11-2013 04:07PM

bear1 wrote: »

This gets better and better

http://www.independent.ie/irish-news/one-in-four-of-all-credit-unions-in-serious-trouble-29745778.html

As I said...tick tock.

MadsL wrote: »

So €54m now, then the next one fails, and the next...there are 408 CUs in Ireland. Tick Tock.

hatrickpatrick · 12-11-2013 04:10PM

Grimreaper666 wrote: »

.............and for everything else, there's the Irish tax payer......

Ok if I make a meme of this?

JustAddWater · 12-11-2013 04:11PM

the groutch wrote: »

fat load of use that €423 per hour "special manager" was.

sure he dropped his fee!

bear1 · 12-11-2013 04:12PM

JustAddWater wrote: »

sure he dropped his fee!

From what?

JustAddWater · 12-11-2013 04:20PM

bear1 wrote: »

From what?

BTW, i'm being sarcastic!

It's a small reduction of an extraordinary fee of €1m a year

http://www.leinsterleader.ie/news/business/news/newbridge-credit-union-special-manager-drops-55k-from-fees-1-5040877

THE special manager of Newbridge Credit Union has agreed in the High Court last Wednesday to reduce his fees by €55,000 to cover a six-month period up to January last.

bear1 · 12-11-2013 04:21PM

JustAddWater wrote: »

BTW, i'm being sarcastic! It's a small reduction of an extraordinary fee of €1m a year

http://www.leinsterleader.ie/news/business/news/newbridge-credit-union-special-manager-drops-55k-from-fees-1-5040877

Didn't mean to sound narky, was just curious

Well, first thing I would do is make that gob****e repay the money

noodler · 12-11-2013 04:36PM

Why on earth are you blaming the Special Manager appointed in 2012 for silly loans issued during the boom?

bear1 · 12-11-2013 04:40PM

Because I believe his fees are disgusting. He is being paid a **** load of money to oversee things at the Credit Union become smooth.
54 million is being pumped into it but he is going to be eligible for 1m in fees.

noodler · 12-11-2013 05:31PM

bear1 wrote: »

Because I believe his fees are disgusting. He is being paid a **** load of money to oversee things at the Credit Union become smooth.
54 million is being pumped into it but he is going to be eligible for 1m in fees.

So you think he is overpaid?

How does that make him a gob*****?

mikom · 12-11-2013 05:48PM

MadsL wrote: »

This will haunt Gilmore I think..

https://www.youtube.com/watch?v=4ZlposIyfTM

Serious lying rattlesnake tongue push on him after he said "happened on a one off basis".
I'd say you are right, MadsL.

Grandeeod · 12-11-2013 05:50PM

noodler wrote: »

So you think he is overpaid?

How does that make him a gob*****?

Probably is overpaid. Doesn't make him a gob****e. I've read the CB report and its quite clear he did all in his power to retain NBCU as some kind of CU.

I don't subscribe to all this conspiracy theory BS from the action group and other commentators regarding a plan to rid the nation of CUs and pillage peoples savings for the betterment of banks. I can tell you that over the years NBCU spent a lot of money discouraging the people of Newbridge from depositing and/or borrowing with/from banks.

The deal is done now and those responsible cannot be held accountable in any legal sense. However it would be interesting to see if civil cases could be taken against the board on the basis of their actions (breaching of regulations leading to appointment of a special manager) leading to the non payment of dividends.

bear1 · 12-11-2013 05:53PM

Ok I'll retract the gob****e part...
Anyone against me then if I would say Gilmore is a gob****e judging from the link that was posted?

Grandeeod · 12-11-2013 06:24PM

bear1 wrote: »

Ok I'll retract the gob****e part...
Anyone against me then if I would say Gilmore is a gob****e judging from the link that was posted?

We can look at this two ways.

1. Gilmore is confident that it is a one off and has the info to back it up.

2. He's talking tripe.

My take on it is this. NBCU appears to be very unique amongst CUs in general and maybe, just maybe there are facts that we don't know about yet. The rumour mill is rife. I'd agree that there are other CUs in trouble, but I don't think we will see a repeat of the NBCU scenario.

pharmaton · 12-11-2013 06:27PM

Bailout 2: coming to a credit Union near you soon

bear1 · 12-11-2013 07:12PM

pharmaton wrote: »

Bailout 2: coming to a credit Union near you soon

Bloody hope not

kupus · 12-11-2013 07:25PM

bear1 wrote: »

Bloody hope not

Stats would argue otherwise.....

Where there is one there is always another.
Sorry to be the bearer of bad news but this looks like a cash grab for the unions to be consolidated and then privatised with selling off.

mikom · 12-11-2013 07:55PM

kupus wrote: »

Stats would argue otherwise.....

Where there is one there is always another.
Sorry to be the bearer of bad news but this looks like a cash grab for the unions to be consolidated and then privatised with selling off.

What would that mean to those with shares in the credit unions?
I presume they would be shafted...

Cee-Jay-Cee · 12-11-2013 07:58PM

donkeyoaty0099 wrote: »

Well the crowd running this were certainly professional clowns. ****ing joke. Heard on the radio this morning the old chestnut that if the credit union falls others will fall and then the banks will fall and then it'll basically be mad max. Such total bollox.

I know what should happen now...the gubberment should offer a blanket guarantee of the credit unions, it worked in the case of the banks...didn't it???

kupus · 12-11-2013 09:09PM

mikom wrote: »

What would that mean to those with shares in the credit unions?
I presume they would be shafted...

Nothing, bar a rise in union fees to align it with bank fees, everything will be as it is, but the CU to be sold to a private banking institution.

Its ripe and ideal to be taken over by someone or some company hedge fund who can streamline it. Get rid of the muppets thats in it, bring in professional staff and not the ones that are there at the moment.
We all know somebody in the credit union and i'm suggesting a blanket statement by saying they wouldn't be the brightest so I wont say that.

If I had the money Id be looking to buy the credit unions in a heartbeat.
Prime real estate, save by getting rid of the driftwood, raise fees, oh and the government just happened to give a guarantee right before I bought.
Keep it for 5 or 6 years and then sell on at huge profit. Easy.

Thats pure speculation on my part btw, but I can see it happening.
I wouldnt be surprised to see high level meetings which we wouldn't hear about going on now to offload the CU some way or the other.

Grandeeod · 12-11-2013 10:21PM

A lot of ****e being talked in this thread. Looks like that famous night of the bank guarantee had lasting effects for some people and Im not talking monetary. Im talking about the crazy predictions and comparisons. This thread is about a renegade CU that thought it was a bank and strove to lend accordingly. The arrogance of its board and management brought it to where it is now. Im sure there was a tad of ignorance too considering it core board members thoughout the early to mid 00s couldn't organise a piss up in a brewery.

I will reiterate that NBCU is a unique case. Other troublesome CUs are not in the same ballpark. There is nothing fundamentally wrong with the CU movement once its protected from power hungry volunteers that want to use it as a means to stick their dicks and tits out at the next parish. NBCU was a victim of this. Members suffered.

Grandeeod · 12-11-2013 10:43PM

This is the statement issued by the BOD of NBCU today.

In a statement released to Kfm this afternoon, the Board of Directors Of Newbridge Credit Union says the decision by the Central Bank to obtain a High Court Order to appoint a Special Manager to Newbridge Credit Union in January 2012, and now the Transfer Order to PTSB, were made with no opportunity for the Board to put forward its views.

The Board says that a more measured approach by the Central Bank would have dealt with the issues without causing such damage to NCU.
It says it is consulting with its legal advisors to assess how best to proceed, whether by way of application to set aside the Transfer Order or have it varied or amended.

The statement says the loan book continued to generate significant income during the past two years; and that the regulatory deficit, which was a direct result of the increased bad debt provisioning policy adopted by the Special Manager, did not increase during the past two years which, the Board says, indicates that the outflow of members' savings in recent months has been entirely attributable to the mismanagement of the process, and not any historical issues.

The Board concludes by saying that, prior to the Special Manager being appointed, Newbridge Credit Union was solvent and had more than adequate liquidity; that the Board at all times tried to work through the process by engaging with the Central Bank; and, that the Board has always acted in the best interest of the Staff and Members.

They make no mention of the fact that the broke regulatory rules. They are like blind mice running across the Curragh. From the CB report.

In addition to the current breaches of the CUA by NCU summarised above, RCU considers
that NCU has also previously breached a number of regulatory requirements, as follows:
100.1 Section 27(4) of the CUA
Section 27(4) of the CUA requires that a member of a credit union shall: (a) not have
a deposit exceeding €100,000; and (b) shall not have a claim or interest in shares in a
credit union exceeding an amount which, when aggregated with the amount held by
the member on deposit with the credit union, exceeds either €200,000 or 1% of the
total assets of the credit union, whichever is the greater. NCU was in breach of this
requirement in June 2008.3

100.2 Section 35(2)(a) and (b) of the CUA
Section 35(2)(a) and (b) of the CUA requires that the proportion of a credit union’s
total loans that have maturities in excess of five years and in excess of 10 years must
not exceed certain limits. As reported by NCU in the Prudential Return at 30 June
2008, the credit union was in breach of this requirement with the total amount
outstanding in respect of all loans exceeding five years at 51.6% of total gross loans
(the maximum permitted under the Act was 20%) and with the total amount

3
Please refer to NCU’s 30 June 2008 Prudential Returns at Appendix B14. 31

outstanding in respect of all loans exceeding ten years at 18.5% of total gross loans
(the maximum permitted under the Act was 10%).4

100.3 Section 32(3) of the CUA
Section 32 of the CUA outlines certain restrictions on withdrawals of shares and
deposits. Grant Thornton indicated in its management letter of 30 September 2009,
received by the Bank on 12 May 2010, that during the course of its audit for the
financial year ended 30 September 2009, it noted breaches of Section 32(3)(b) of the
CUA based on samples.5

And that was before the Special Manager was appointed. It appears that the BOD of NBCU are united in trying to offer up figures as a defence to their actions and subsequent demise under the Special Manager. The leaked news and run on the CU last July is directly related to the absolute shambolic way this CU was managed. It turned into an arrogant financial beast under virtually no regulation. It was a founder of CUDA, which was a breakaway entity of the long established ILCU. From the late 90s it was obvious the NBCU was trying to become something very different to what CUs should be. They have their followers and there are some big guns in CUDA money wise.

driver02 · 12-11-2013 11:42PM

The directors and supervisors of Newbridge were either incompetent or on a power trip but probably a combination of bot a very dangerous thing.judging by the ivory tower of a building they had one comes down on the side of the power trip.

Highflyer13 · 13-11-2013 01:08AM

It has to be said the calibre of senior management in financial institutions in Ireland is appalling and incompetent to say the least.The RSA debacle and Newbridge CU confirming this with rumours of more credit unions in trouble. I have very little faith in the Central banks regulation going forward. As long as nobody is being held accountable this s**t will carry on. I wonder who the big customers in Newbridge were?

bear1 · 13-11-2013 10:45AM

Now they are saying an 11m black hole has been found in 20 CU's.

http://www.independent.ie/irish-news/black-hole-of-11m-threatens-20-credit-unions-29749579.html

This is my favourite part:

"But Mr Gilmore said the assets and liabilities of Newbridge Credit Union had to be transferred to Permanent TSB.

"Without the transfer to Permanent TSB, Newbridge would have been liquidated," he said.

Mr Gilmore said this would have resulted in a "loss of €1.1m in unprotected savings".

The savings of individual depositors are covered up to a limit of €100,000. However, there was over €1m lodged in individual accounts above the €100,000 limit"

Seems to me it's more about protecting the rich than anything.

noodler · 13-11-2013 10:50AM

bear1 wrote: »

Now they are saying an 11m black hole has been found in 20 CU's.

http://www.independent.ie/irish-news/black-hole-of-11m-threatens-20-credit-unions-29749579.html

This is my favourite part:

"But Mr Gilmore said the assets and liabilities of Newbridge Credit Union had to be transferred to Permanent TSB.

"Without the transfer to Permanent TSB, Newbridge would have been liquidated," he said.

Mr Gilmore said this would have resulted in a "loss of €1.1m in unprotected savings".

The savings of individual depositors are covered up to a limit of €100,000. However, there was over €1m lodged in individual accounts above the €100,000 limit"

Seems to me it's more about protecting the rich than anything.

Disagree completely.

The point is even if we liquidated the NCU then 99% of all deposits are under 100k and would have to be forked out by the Government anyway.

The benefit of burning a million euro or so of depositors over 100k would be totally outweighed by the potential negative effect it would have on other credit unions.

bear1 · 13-11-2013 11:20AM

noodler wrote: »

Disagree completely.

The point is even if we liquidated the NCU then 99% of all deposits are under 100k and would have to be forked out by the Government anyway.

The benefit of burning a million euro or so of depositors over 100k would be totally outweighed by the potential negative effect it would have on other credit unions.

What is happening here is this:

The Government is pumping 50 million into NCU so that PTSB (which the taxpayer also bailed out) can take it on.
So instead of burning 1.1 million they decide that we should pay 50 million into the CU so that 1.1 million wont be lost???
Are we serious??
If that is the case then I completely disagree with you.
It's sounds cruel to burn the 1.1 million of savers money but it should have been to the other financial institutions too.
Their management was reckless to say the least but why should they worry when they know that the debts they have racked up will land on our backs.
I don't know about everyone else but I, as a taxpayer, am sick of paying off others debts

zl1whqvjs75cdy · 13-11-2013 11:41AM

But how much would it have cost to cover the savings that were under 100k? I think that's what we really need to know, would it have been considerably cheaper to let it go to the wall? I'd say no in both financial and sentimental terms.

Newbridge Credit Union Bailed Out

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