Lending levels have been boosted by credit unions issuing more mortgages to members.
In the last year alone, mortgage lending is up by more than a third. Mortgages now make up 10pc of the overall credit union loan books, according to the Irish League of Credit Unions, the representative group for the sector.
The league released financial details for the April to June period outlining the performance of its members.
Overall, the results showed continued growth among credit unions, with continued expansion in mortgage lending and in the adoption of digital services, the league said. Credit unions issued loans to the value of €685m the second quarter, an 11pc increase on the first three months of the year.
The total credit union loan book now stands at €6.08bn.
This is the first time since 2008, the peak of the Celtic Tiger, that the loan book of credit unions has topped the €6bn figure, according to Irish League of Credit Unions chief executive David Malone.
He said mortgage lending was a growing part of the sector’s lending.
The loan books of credit unions, which are members of the league, increased to €632m at the end of March, a 5pc increase on the first quarter. This is a growth of 34pc over the year.
At the end of the second quarter of this year, mortgages represented 10.4pc of the loan books, up from 8.5pc in March 2024 and 5.7pc in March 2023.
The average loan outstanding is now at a record high of €10,617.
The growth in overall lending is in the context of close-to-record-low arrears of just 2.37pc.
Recent legislative changes, which are due to come into effect by the end of the summer following Central Bank changes to its rules, mean credit unions will be allowed to almost triple their mortgage lending.
Credit unions are now coming together to take on the banks on mortgages.
They are to jointly offer mortgages in a move that will deepen the sector’s penetration in the home-loans market.
A number of larger credit unions already offer mortgages, but each has a different interest rate.
The new product, Credit Union Mortgage, will mean there will be a standardised national mortgage, with a set interest rate.
Initially, there will be a single mortgage product with a variable interest rate of 3.85pc.
The launch of the product for new buyers and existing homeowners is due on a phased basis from next month.
Mr Malone said: “These results reflect the continued trust that communities across Ireland place in their local credit unions.
“Surpassing the €6bn mark in our loan book for the first time since 2008 is a significant milestone, and the consistent growth in mortgage lending shows that members are increasingly turning to credit unions.”
He said the sector had achieved near record-low arrears and growing membership.
Mr Malone said the sector was eagerly awaiting the finalisation of the Central Bank’s ‘Consultation on Proposed Changes to the Credit Union Lending Regulations’.
With these proposed changes, credit unions could potentially expand their mortgage loan portfolios to more than €5.5bn, he said.
