Credit Union able to pay 1% dividend to members hit by cost-of-living crisis thanks to increased income

The dividend was approved at the Credit Union’s Annual General Meeting on Monday night and has been set at one per cent on members' shares and one per cent on minors' deposits.

Ms. Bradley, in the DCU Annual Report for 2023, said it had been a ‘very successful year’ despite the ‘continued impact of COVID and Brexit, and the cost-of-living and energy crises created by the war in Ukraine’.

Equally, she acknowledged ‘an increasing number of our members have indicated that they are struggling with the cost of living and are worried about the uncertainties ahead’.

"Despite these many challenges, DCU recorded a successful financial year, attaining a significant surplus at year-end of £1,890,905 from our core areas of operation.

"Our income was £5,404,708, and expenditure was £3,513,803. This financial outcome enables the Directors of DCU to recommend an increased dividend of one per cent and an interest rate rebate on eligible loans of 25%.

"The dividend increase of 0.5% from 0.5% (as outlined in our Strategic Plan) to one per cent recognises the difficulties being experienced by members in this cost-of-living crisis and is possible due to our increased income from a growing loan book and better returns on investments,” she declared.

The DCU Treasurer contributed the increase in income over the year to three principle factors – interest on members’ loans, written-off debt recovered and investment income.

"Our main source of income was interest on members’ loans. The returns we achieve on interest on loans is greater than that achieved from investments.

"There were 9,229 borrowing members in 2023. I would like to thank them as well as our Loan Officers who processed 14,415 loan applications during the year,” stated Ms. Bradley.

Net interest income for the year ended September 30, 2023, stood at £5,392,305, a year-on-year increase from £4,718,243.

She went on to state that £191,596 in written-off debt was also recovered in 2023 thanks to ‘the tireless work of our Credit Control Department’.

"The third source was Investment income which increased by £1,349,550 from £710,541 in 2022 to £2,060,091 in 2023. This increase was achieved by careful investment decisions taken by the Finance Committee and endorsed by the Board in a market where interest rates started to increase,” stated Ms. Bradley.

DCU managed to cut expenditure by one per cent (£47,066) in 2023 against budgeted expenditure thanks to ‘careful control and monitoring of expenditure carried out by the Finance Committee’.

Ms. Bradley noted how the DCU loan portfolio increased significantly over the year while the ongoing cost-of-living crisis was reflected by a decrease in members’ shares.

"The value of our Loan Book was £33,848,324, representing a substantial increase of almost £1.9 million in 2023.

"This was due in part to the popularity of our new loan products introduced in 2022 and our loan marketing campaigns. Staff continued to remind members of the benefits of credit union loans when engaging with us.

Derry Credit Union pays out in excess of ££17m in loans this year

"Shares decreased by £986,066 in 2023, reflecting pressures imposed by the cost of living crisis,” she stated.

Capital, meanwhile, increased to £15,986,780.

"Total assets of DCU now stand at £114,281,169 – a remarkable figure when compared to our recorded assets of £8.60 in October 1960,” said the DCU Treasurer.

Secretary Patricia Doherty also writing in the Annual Report said the total value of members’ shares decreased slightly but remained close to £100m.

"We provide two share accounts for each member: a Main Account and an Easy Shares Account. Minors deposit their savings in a Minor Savings Account. All shares and deposits attract a dividend. At year end, members’ shares (including Easy Shares) were £92,015,536. This represents a decrease of £986,066. In 2023, minors’ deposits amounted to £4,754,183,” she stated.

Referring to DCU’s popular loans service, Ms. Doherty said 95.5 per cent of the 14,415 loan applications received in the year to September 2023 were approved.

"Loan applications are considered on the individual member’s history and capacity to repay the loan. At year end, our Loan Book was valued at £33,848,324 – an increase of nearly £1.9 million from 2021/2022.

“While this growth in loans is welcomed, we would continue to caution members to borrow only what they need, when they need it, and aim to have the credit union as their life-long financial partner of choice,” she said.

£45,000 for new play on John and Pat Hume

Over the year 14,415 loans with a value of £19,807,172 were issued – an increase of £521,988. The total value of the loan book was £33,848,324 – an increase of £1,892,850.

Ms. Doherty stated: “We are the only credit union in the Northwest to offer six loan products: the Covered by Shares loan at 6.43% Annual Percentage Rate (APR), the Auto Loan at 6.7% APR, Diamond Extra loan at 7.23%, the Green Loan at 9.38% APR, the Agri Loan at 9.38% APR, and the Standard Loan at 12.68% APR.”

The most popular loans issued in 2023 were as follows: Covered by Shares loans (3,768 loans; £4,629,186); Diamond Extra loans (345 loans £3,366,759); Auto loans (727 loans; £3,092,692); Holiday loans (2,335; £2,701,006); Christmas loans (2,177 loans; £2,076,775); and Household Expenses loans (979 loans; £437,020).

Colm McCauley, President, recommended the annual report to members.

"On behalf of the Derry Credit Union Board of Directors, I thank our active members and remind our wider Membership that the future success of Derry Credit Union depends upon your ongoing use of our services and facilities. We must work together to ensure the future growth and sustainability of this great organisation,” he stated.

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