# St Michael's, Ballypehane & St Finbarr's South CUs merging



## TheJackal (7 Dec 2015)

Got a booklet in the door on Friday to say St Michael's, Blackrock is merging with Ballyphehane CU, subject to ratification at the AGMs. Ballyphehane in turn are merging with St Finbarr's South CU.

The new body will be called First South Cork CU I believe.


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## The_Banker (7 Dec 2015)

Ballyphehane has a big membership and i would have thought they would be one of the CUs to be least in trouble. Im a member and I got a letter saying that they were merging with St Finbarrs South only two weeks ago, which has an extremely small membership...
However, why would have though that they would have held off informing members regarding the St Finbarrs 'merger' and confirmed that all three were coming together...

Seems strange...


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## Conor Long (16 Dec 2015)

St Michaels rejected the motion to merger .It was a very heated meeting and the board of St Michaels were pushing the merger .

They looked very out of touch and the arguments they put forward in favour were very vague . Over 60% were against .


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## TheJackal (16 Dec 2015)

Conor Long said:


> St Michaels rejected the motion to merger .It was a very heated meeting and the board of St Michaels were pushing the merger .
> 
> They looked very out of touch and the arguments they put forward in favour were very vague . Over 60% were against .



Interesting. When I read the booklet I said they keep mentioning cost savings but have given no examples or even stated why they decided merging was the best option


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## Conor Long (16 Dec 2015)

The reasons they gave for the merger were very watery . Also there was also rep from REBO who didn`t really help there cause .


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## trojan (17 Dec 2015)

Conor Long said:


> The reasons they gave for the merger were very watery . Also there was also rep from REBO who didn`t really help there cause .


I was not at the meeting but when i first heard of the proposed merger and change of name i immediatley felt many people would be upset as they were very proud of their local cdredit union, St Michaels wheich rightly they regarded as an intergal part of the local community.


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## 24601 (17 Dec 2015)

As far as I understand St. Michael's would have missed a few AGMs in the past few years so I'm guessing the proposed merger would have been to their members benefit but was obviously very poorly explained on the night.


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## DannyO (17 Dec 2015)

Ballyphehane CU passed the motion almost unanimously. There was very little discussion.


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## 24601 (4 Jan 2016)

Ballyphehane released a statement on their website - http://www.balecu.ie/credit-union-news/update-on-proposed-merger-with-st-michaels-credit-union/


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## Black_Adder (21 Jan 2016)

I love one of our posters which said Ballyphehane were "...one of the CUs to be least in trouble...".

This of course is true but hardly fair. Again ask people to list all the failed credit unions and they struggle after 4 or 5.

St Michael's is a good example of having fallen foul of the 10% Regulatory Reserve Ratio.

They are well below 7.5%. Again if we had access to Accounts for research, it would reveal a lot.

The problem with the ratio is this:
1. Only retained profits can increase the reserves essentially [This is a significant serious flaw]
2. Even though Shares are 'capital' the CBI treats them as 'deposits' so they don't count for risk capital [Maybe this makes sense]
3. Its against all assets with no risk weightings [This makes  the ratio a nonsense because Loans are assets and US Government Bonds are assets]
4. When a CU goes below 7.5% alarm bells ring signalling remedial action. [This is on very dodgy foundations]

[So  even if I say 3% against Total Assets is the Banks equivalent under Basel III then why are Credit Unions being hammered when their ratio
is above 3% but below 10%?]

So Michael's would have been 'advised' - well lets say merge or the consequences are ..

So if St Michael's are challenged to fill the gap in their ratio - a seriously flawed ratio - how do they fill it if the profitability is temporarily
challenged?

You will note that I say temporarily - I do not buy for a minute the bogus 'viability' argument. Credit Unions have temporarily lost
their way on lending - but just look at 1295% APR in another posting and Credit Unions at 12.9% APR Maximum.

Basically if Michael's were properly advised the CBI would be challenged on the Reserve Ratio and there are so many defects that
whoever came up with it had one thing in mind. Put a brake on Credit Union growth. Use it as an enforcement mechanism.
It is the most crude, illogical, highest in the world 'ratio' based on  prejudice by the designer and accepted because nobody knows how
to bring the CBI to order on certain excesses. This is one.


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