# What should I raise at the CU AGM?



## yeatsanon45 (26 Nov 2012)

The AGM of Sligo Credit Union is on tomorrow night. 

They have declared a 0.75% dividend which is reasonable in the difficult times that we are in. To the credit of the Board and its management AGMs have been held promptly in the last week of November each year as long as I can remember.

However, none of the reports give us any hard facts such as the actual delinquency amount we are carrying plus the percentage of renegotiated loans on its books.

Like many other Credit Unions throughout the country Loans are static but the amount of Shares are growing rapidly notwithstanding the difficulties that a 10% Statutory Reserve imposes.

I would like to generate a debate on this issue and explore different alternatives.

I fully appreciate carrying excess Share amounts pre the European Exchange Mechanism of 1999.


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## WizardDr (26 Nov 2012)

@yearsanon45

First thing is that the Statutory Reserve at 10% is out of RETAINED profits

It is 300% bigger than that required by the Banks after Basel III which when you cut throught the tedious and odious risk weighted assets - suggests that the ratio could be no less than  3% of total assets.

You credit union should have a representative of the Regulator down to explain in detail this regulatory gap of such a high magnitude.

For the avoidance of doubt, if Sligo Credit Union had only one asset called Government Gilts - it would still need 10% of that value - as a revenue reserve,

What that means is that it would retain profits equal to that amount.

This is  incredibly easy when the best banks in the world do not make more than 1.1% on their assets.

So those Regulators should be challenged on this.

Its a pity that so many people simpy don't get it.

Your credit union is on the way out - because of some incredibly deranged and illogical Regulator that most of us are afraid to question.


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## Slim (27 Nov 2012)

yeatsanon45 said:


> The AGM of Sligo Credit Union is on tomorrow night. They have declared a 3/4% dividend which is reasonable in the difficult times that we are in. To the credit of the Board and its management AGMs have been held promptly in the last week of November each year as long as I can remember.
> However, none of the reports give us any hard facts such as the actual delinquency amount we are carrying plus the percentage of renegotiated loans on its books.
> Like many other Credit Unions throughout the country Loans are static but the amount of Shares are growing rapidly notwithstanding the difficulties that a 10% Statutory Reserve imposes.
> I would like to generate a debate on this issue and explore different alternatives.
> I fully appreciate carrying excess Share amounts pre the European Exchange Mechanism of 1999.


 
I relation to bad debts, look at the Balance Sheet. Under Assets, Members' loan = €X, Provision for Bad and Doubtful Debts=€Y, Net asset of loans = X-Y. This will give you an indication of the level of risky loans as this is calculated by the system. Under Reserves, your CU may have Doubtful Debt reserve (or some such name). The reserve is largely discretionary and the larger the DD reserve compared to the value of loans, X, the better. If the DD reserve equals Y, you are probably in good shape, imho. Provided, of course, that you are compliant with the 10% Statutory Reserve. The question of re-scheduled loans should be raised from the floor.


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