Proposed Dividend CORE

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PeeBee

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CORE Credit Union is proposing a dividend of only 0.40%. The average interest on Loan A/Cs is 8.62%. that is less than most competing institutions

I think the Credit Union(s) has lost sight of the Saving MEMBERS who provide the funds for Borrowing MEMBERS. Time for savers to look elsewhere?
 
Thank for the alacrity of your response. I was rather hoping to get a more 'considered' reply. However, I will of course 'attend' the ONLINE AGM , raise my concerns and probably vote with my feet!
 
PeeBee said:
I was rather hoping to get a more 'considered' reply.
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I considered the matter very carefully before replying.

Anyway, if you're looking for better deposit rates than any CU offers then see here:

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Thank you ClubMan. I am well aware of the market place for retail deposits. That said, I find it disappointing that a large, 'profitable' Credit Union charges,on average, more than 20 times more on loans than it pays by way of dividend. The nature of a Credit Union is MUTUALITY; charging 8.62% while only paying 0.4% is a gross distortion of the MUTUALITY that should underpin a Credit Union.
 
Credit Unions never treated their members fairly.
E.g. by insisting that they keep 25% of any loan on deposit/in shares thus inflating the cost of credit significantly above the stated APR.
Credit Unions will only change how they do things if active members attend general meetings and make their feelings known.
 
The CORE AGM will, yet again, be an ONLINE meeting where the chances of rejecting the motion to pay a paltry 0.4% dividend tends towards zero
 
The banks and CU are flooded with deposits.

They have no need to compete for deposits.

Indeed, some CU have refused large deposits, as there are costs for the CU, and no corresponding income, as their loan books are way smaller than their deposits.
 
I think you will find that the CUs have been 'earning' on money markets. The day of negative returns is past. The management fees of many CUs is excessive and they rely on the inertia of saving Members when proposing derisory divends
 
PeeBee said:
The management fees of many CUs is excessive and they rely on the inertia of saving Members when proposing derisory divends
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Who is benefitting from the excessive management fees?

If they were reduced to what you deem to be an acceptable level, how much dividend would you expect in return? Any other suggestions on how to increase the dividend?

PeeBee said:
That said, I find it disappointing that a large, 'profitable' Credit Union charges,on average, more than 20 times more on loans than it pays by way of dividend.
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What are the 'profits' and where are they going?

Might be helpful to consider if you are raising the issue at the AGM or rallying other members into action.
 
PeeBee said:
The CORE AGM will, yet again, be an ONLINE meeting where the chances of rejecting the motion to pay a paltry 0.4% dividend tends towards zero
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In fairness, the options for members are to accept the dividend proposed or to reject it, so it's either 0.4% or 0%. Credit union balance sheets are upside-down, why would they be paying high dividends and attracting deposits when they can only lend out €3 for every €10 they take in? The money is on-demand - what's the best rate going for on-demand deposit accounts at the moment - can't be much more than 0.4%?
 
24601 said:
what's the best rate going for on-demand deposit accounts at the moment - can't be much more than 0.4%?
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3.7%?

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Rates are frequently updated. Information last changed: 22 November 2024. Highest Instant Access Rate: €1+ - Trading212 - 3.70% Selected Instant Access & Notice & Money Market Products: Trading212 3.70% on €1+ Access: Instant access. Interest paid: Daily. This rate requires opt-in inside...
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An Post is paying 0.75% on Demand accounts; that is nearly twice that proposed by the cash rich CORE Credit Union at 0.4% The pillar banks will also pay 0.75% ,subject to 31 days notice. And, as mentioned above, the 'offshore' institutions are paying up to 3.7% on demand monies.The question is, why save with a Credit Union?. They have lost sight of the ethos of and application of MUTUALITY. They rely on the inertia of the Saving Members.

Let's take Savings of €50.000 and compare

@ 3.7% the net return is €1259.50
@ 0.75 the net return is £251.25
@ 0.4% the net return is € 134.00

In other words, the 'offshore' bank pays almost 10 times more NET interest than Core Credit Union and An Post pays almost twice what Core Credit Union is proposing!
 
PeeBee said:
An Post is paying 0.75% on Demand accounts; that is nearly twice that proposed by the cash rich CORE Credit Union at 0.4% The pillar banks will also pay 0.75% ,subject to 31 days notice. And, as mentioned above, the 'offshore' institutions are paying up to 3.7% on demand monies.The question is, why save with a Credit Union?. They have lost sight of the ethos of and application of MUTUALITY. They rely on the inertia of the Saving Members.

Let's take Savings of €50.000 and compare

@ 3.7% the net return is €1259.50
@ 0.75 the net return is £251.25
@ 0.4% the net return is € 134.00

In other words, the 'offshore' bank pays almost 10 times more NET interest than Core Credit Union and An Post pays almost twice what Core Credit Union is proposing!
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You're comparing apples and oranges though. An Post has turnover of about a billion and Trading 212 is an online trading platform that appears to makes about £40m in profit per annum that offers very little capital protection on its products, whereas Core CU is a co-operative with turnover of around €7m, profit of €2.2m and 5 offices in south County Dublin. 0.4% dividend will cost them about half a million so they are distributing around a quarter of their surplus. Bear in mind that they have strict enough reserve requirements that they can only fund trhough retained earnings. Given their small loan book and current economic uncertainty it seems sensible enough to have a conservative dividend policy.
 
Interesting take 24601.

So, accepting your view, tell me why I should save with Core. It is not my fault that they cannot recruit enough borrowers. Their accounts suggest that it is profitable to place funds on money markets. Furthermore, 0.4% represents about only about 18% [Not 25%!] Of €2.2m surplus.
No saving Members, = no Borrowing Members= no Credit Union. Spin it any way you want but savers with the Credit Union are being badly treated .
 
PeeBee said:
So, accepting your view, tell me why I should save with Core.
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If your priority is to maximise the interest on your savings then you shouldn't.
If your priority is, say, to support a community "bank" and you might want to borrow from them at some point then perhaps you should.
Sounds to me like you shouldn't as you're simply not happy with them and don't seem inclined to tell them this at a general meeting or unilaterally.
 
24601 said:
You're comparing apples and oranges though. An Post has turnover of about a billion and Trading 212 is an online trading platform that appears to makes about £40m in profit per annum that offers very little capital protection on its products, whereas Core CU is a co-operative with turnover of around €7m, profit of €2.2m and 5 offices in south County Dublin. 0.4% dividend will cost them about half a million so they are distributing around a quarter of their surplus. Bear in mind that they have strict enough reserve requirements that they can only fund trhough retained earnings. Given their small loan book and current economic uncertainty it seems sensible enough to have a conservative dividend policy.
Click to expand...

The online banks DO OFFER GUARANTEES!

A dividend of say 1%+ could easily be paid, whilst staying well within regulatory parameters.
 
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