ANNUAL REPORT 2024
Wednesday, 18 December, 7:00pm, Zoom
GUIDE TO JOINING US ON ZOOM
Wednesday, 18 December, 7:00pm
The last day for registering for the 2024 First South Credit Union AGM is Sunday, 15 December 2024.
• If you have already consented to receive your AGM notification electronically, you will receive an email shortly with a link to register.
• If you have received this booklet by post you must contact the Credit Union in order to register your email address for the AGM.
• You can contact us on 021-4965134 or by emailing agm@1cu.ie (subject to verification).
• Your full name and email address is required – this email address is the one you will use to log into Zoom for the AGM.
› REGISTER › MEETING
• Once registered, you will be sent a link from Plannd Events to join the AGM 24 hours prior to the event date.
• This is a link unique to your email address and can not be shared.
• If you share this link you forego the right to vote during the AGM.
• You will not be able to change your name on Zoom once you join the Zoom event.
• If you wish to ask a question, propose or second a motion you may do so by using the “raise your hand” function.
• The facilitator will enable your microphone and the Chair will welcome you to unmute and make your comment/question.
• Please note comments and questions can only be addressed at designated times throughout the meeting.
AGM Notice
The 65th Annual General Meeting of First South Credit Union Limited will be held remotely via Zoom, on Wednesday, 18 December at 7:00pm.
Each Member is earnestly requested to attend. The election of three members to the Board of Directors, one member to the Board Oversight Committee and an Auditor will take place at the meeting. For health and safety reasons, this meeting will be held remotely using ZOOM, a live video stream which you will be able to access online.
At the beginning of this report on pages 2-3, it is outlined how to access the meeting. Each member will be required to pre-register for this meeting and details on how to do this are outlined on pages 2-3.
Finnuala Hanley, Secretary
Members are requested to be logged in before the appointed time to enable the meeting to start punctually. 1. Acceptance of Proxies (if any) by Board of Directors
AGM Agenda
Board of Directors
Finbarr O’Sullivan (Chairperson)
Norma Cotter (Vice-Chairperson)
Finnuala Hanley (Hon. Secretary)
Eamonn Collins
Margaret Canty
Senior Managers
George Cantwell ...................
Tracy McCarthy ......................
Johanna Mulvihill .................
David Tobin .............................
Katherine Spillane ................
James Aveyard .......................
Blanche Ronayne
Carmel Murphy
Donal Scannell
Board Oversight Committee Committees
Internal Audit .......................
Risk Management ...............
Remuneration ......................
Complaints ............................
Credit .......................................
Credit Control .......................
Nominations .........................
Asset & Liabilities ................
John O`Sullivan
Chief Executive Officer
Finance Manager & Deputy CEO
Risk Manager
Operations Manager
Senior Branch Manager
Compliance Officer
Eimer O’Leary
John O’Halloran
John O’ Shea
J. O’Halloran, F. O’Sullivan, E. O’Leary & F. Hanley
F. Hanley, E. O’Leary, J. O’Shea, C. Murphy, N. Cotter & D. Scannell
J. O’Shea, F. Hanley & F. O’Sullivan
F. Hanley, C. Murphy & B. Ronayne
M. Linehan, P. Linehan, C. Murphy & D. Scannell
J. O’ Shea, F. O’Sullivan & F. Hanley
N. Cotter, C. Murphy & B. Ronayne,
B. Ronayne, J. O’Halloran, D.Scannell, M. Linehan, G. Cantwell & T. McCarthy
Internal Auditors .... Barrett O’Connor & Co, North Point House, North Point Bus. Park, Cork
Solicitors .................Healy O’Connor Solicitors, Quay House, Fitton Street, Cork
Padraig J Sheehan, Village Green House, Douglas, Cork
Auditors .................. Grant Thornton, Penrose One, Penrose Dock, Cork
Bankers ...................Bank of Ireland, 32 South Mall, Cork
Dankse Bank, Holmens Kanal 2-12 1092, Copenhagen
Board of Directors’ Report
On behalf of my fellow Board of Directors (BOD) it is my pleasure to update you on our activities over the last year.
The primary objective of the Board of Directors is the protection of member’s savings.
The Board are responsible for the general control, direction and management of the credit union and ensure that adequate and appropriate systems and resources are in place to meet both our legal and regulatory requirements.
The BOD made a successful application to the Central Bank to increase its long term lending limits. We are now permitted to lend up to 15% of our assets for a period greater than 10 years. The Board will continue to review its lending policies to ensure that members have the best loan products whilst ensuring we minimise risk to members savings.
Our Current Account offering continues to give members a real choice of banking. In 2025 our Debit Card is switching to a Visa branded card. At a monthly cost of €4, we believe our current account offers great value. Members may also apply for an overdraft on their current account. Members over 66 years and qualifying students are exempted from these fees. In addition, members in these categories do not pay general transaction fees.
The financial year under review has seen your Credit Union create an operating surplus of just under €2 million. The Board of Directors are proposing a dividend of 0.6%. This will return over €1,000,000 to our members (over 50% of the surplus). The balance will remain in our reserves which are essential for the stability of your credit union.
The Assets of the credit union remain stable at €211.2 million up €2.6 million from 2023 whilst our Member savings have grown by just under €1.5 million.
We have experienced significant growth in our Loan Book. It has increased by €9.5 million to €67.3 million. The key contributor to this increase was the continued growth in our mortgage business (€8.9 million in the financial year). Our Mortgage book now equates to 19.65% of overall loans. We have both fixed rate mortgages and variable rate mortgage products available at very competitive rates.
Whilst the growth in our loan book is welcomed, it is important to point out only 18% of our membership have loans with their Credit Union. I would encourage any member who is planning to borrow, to consider their Credit Union. We have multiple loan products, all very keen interest rates, which are designed to meet all of our member’s needs.
Our Membership remains strong at 39,898.
We welcomed 1,336 new members this year. We have recently launched a number of new initiatives with our schools. We appreciate the assistance of the Principals, Teachers, Parents Committees and of course the students in making this initiative work.
Board of Directors’ Report (continued)
Sadly, a number of members also passed away during the year and we wish to express our sympathies to their surviving loved one’s.
Our Credit Union is very mindful of the impacts of Climate Change. The Board of Directors have adopted an Environmental and Social Governance Policy (ESG) which will ensure we play our part in climate change and social obligations. Credit Unions have always been mindful of our Social responsibilities before ESG became popular. Our ethos and operating principles ensure we put our members interests first. We have a number of initiatives under way to reduce our electricity consumption from the national grid which includes installing Solar Panels in our premises’.
We continuously monitor our paper usage and we would also encourage our members to sign up for Electronic Communication and in doing so reduce the amount of paper we use.
A number of significant Information Technology projects are currently underway to increase the reliability, safety and security of our IT infrastructure. We would remind members to never disclose their PIN’s or passwords. The Credit Union will never ask you to disclose this information either over the Phone or electronically. If you are ever in doubt about any communication, you receive from your Credit Union it always best to contact the office first.
It would be remiss of me not to pay special tribute to a number of our Volunteers who are retiring from their involvement with our Credit Union. Eamonn Collins is retiring from the Board Oversight Committee after 14 years of service. Eamonn has always approached his responsibilities diligently and we wish him well into the future. Philip Linehan has given many years service to our Credit Union, firstly as a Director and in more recent years as a member of the Credit Committee. Both Eamonn’s and Philip’s unpaid service epitomises the voluntary ethos of the credit union movement.
I would like to acknowledge my fellow Directors and members of the Board Oversight for their continued voluntary unpaid commitment and dedication, ensuring First South Credit Union is a safe and sound organisation for member’s savings.
Your voluntary Directors elected from the Membership ensures our Members interests are always foremost in our decision making.
The Board of Directors would like to thank our CEO George Cantwell and all the Management and staff, for the manner in which they conduct their business. Their professionalism and Member first approach is clear in the good relationship we have with our members.
Finally, to you the members we thank for your continued loyalty.
Finbarr O’Sullivan Chairperson of the Board of Directors
Nomination Committee Report
The Nomination Committee met regularly throughout the year and is tasked with responsibilities including:
• Identifying candidates to be nominated to the Board of Directors and Board Oversight Committee;
• Ensuring that all candidates are fit and proper to perform their functions in line with Central Bank Standards;
• Ensuring that the Board and Committees receive ongoing and relevant training;
• Assisting the Board of Directors with Succession Planning and the filling of casual vacancies which may arise on the Board.
Board of Directors
There are 3 candidates on the ballot to fill 3 positions on the Board of Directors of First South Credit Union. Each vacancy is for a term of 3 years.
The following candidates are proposed (in alphabetical order):
• Eimer O’Leary
• John O’Shea
• Finbarr O’Sullivan
Board Oversight Committee. (BOC)
Eamonn Collins is retiring from the Board Oversight Committee after serving 14 years on the Committee.
Accordingly, we have an election for 2 positions to the BOC. There are 2 candidates on the ballot to fill 2 positions on the Board of Directors of First South Credit Union. One for a term of 3 years and the other term is for 1 year. The candidate who receives the highest vote will serve for 3 years and the remaining candidate will serve for 1 year.
The following candidates are proposed:
• Margaret Canty
• Bernard Farry
Auditor
The Board of Directors are proposing Grant Thornton as its external auditor for the coming year.
All candidates nominated for appointment to the Board of Directors and Board Oversight Committee are proposed through the Nomination Committee and elections are held by secret ballot. Due diligence has been carried out on all candidates and we are satisfied that all meet the Central Bank’s Standards of Fitness & Probity.
The Committee is always interested in hearing from people who would like to volunteer for a position on the Board or on any of the various Committees of First South Credit Union. If you wish to put your name forward to volunteer, please contact a member of the Nomination Committee.
On behalf the Nomination Committee, Blanche Ronayne
VOLUNTEERS NEEDED
Are you passionate about making a difference in your community? We are looking for volunteers to join our Board of Directors.
WHY VOLUNTEER AT FIRST SOUTH CU?
› Professional Growth
Gain valuable experience in business disciplines, from strategic planning to risk management, in a regulated environment.
› Personal Development
Enhance your skills through unique training and development opportunities that can benefit your career in numerous ways.
› Community Impact
Play a crucial role in shaping the financial wellbeing of your community.
If you're ready to grow with us and contribute to a brighter financial future for our members, consider volunteering with First South Credit Union.
The position of a Director is a controlled function and potential applicants must satisfy fitness and probity standards as prescribed by the Central Bank of Ireland.
For more information visit: www.1cu.ie/volunteering-opportunities
Board Oversight Committee Report
Three members serve on the Board Oversight Committee.
The role of the Board Oversight Committee is to ensure on behalf of the Credit Union Members that all the actions and decisions of the Board of Directors are within the law and the rules of this Credit Union.
In this regard, we are satisfied from our observations at Board Meetings and our attendances at Board Sub-Committee meetings that the Board of Directors has operated in accordance with Part 4 and part 4A of the Credit Union Act, 1997 as amended.
We have attended the following Board of Directors sub-committee meetings:
1) Assets & Liabilities Management Committee
2) Remuneration Committee
3) Risk Committee
4 ) Complaints Committee
5) Credit Control Committee
Minutes were recorded at each meeting. We were satisfied with the scope of business and reviews conducted. We were satisfied further that all business was conducted within Board Policies.
We have attended all Extended Credit Committee meetings during the year and we were satisfied that the approvals decisions followed correct procedure in all cases.
We would like to record our thanks and appreciation to the Board of Directors, the CEO, Management and Staff for their assistance and co-operation throughout the year.
And once again, may we take this opportunity to thank you the members for your continued support and involvement with First South Credit Union Ltd.
Eamonn Collins Chair
E-SIGNATURES ARE HERE
What are e-signatures?
E-signatures, or electronic signatures, are a digital way of signing documents that eliminates the need for physical signatures on paper.
What are the benefits:
• Securely sign loan documents from the comfort of your own home, office, or even while on-the-go.
• No need to physically visit our branch to collect your loan.
• Protected by advanced encryption technology, ensuring that your personal information remains confidential and secure.
What documents can I e-sign?
With our new e-signing technology, you can apply for your loan through our online banking portal, e-sign the credit agreement upon approval, and have the funds deposited directly into your credit union account.
Credit Committee Report
During the past year we advanced 3,792 loans amounting to €30,447,877 (2023: €23,836,809). At the year end the total loans outstanding were €67,285,757 (2023: €57,735,777). This is an increase of almost €9.5 million (16.5% increase)
The Board of Directors made a successful application to the Central Bank to increase its long term lending limits. This has enabled us to loan a greater % of our Assets over longer durations. We are now permitted to lend up to15% of our assets for a period greater than 10 years.
Currently, we have 6,200 borrowers. Our interest rates remain very favourable when compared to other financial institutions with the added flexibility of early repayment with no penalties. Members can visit any of our offices and meet in person, one of our experienced loan officers, to discuss their loan options. In addition, members have the convenience of ringing us or making an online loan application.
Mortgages
Our Home Loan Mortgage product allows a member to borrow up to €400,000 at market leading rates. The maximum duration for this loan type is 35 years. Further information can be obtained by visiting any of our offices or our website at www.1cu.ie.
Loans issued by category for the year ending 30th September 2024
Purpose
Mortgage Home
Car
Personal
Home Improvement
Secured Savings Rate
First Time Borrower
Smart Option
Total for Year
Loans Issued
€8,911,452
€7,196,175
€5,126,094
€4,860,691
€2,249,947
€1,537,878
€565,640
€30,447,877
We believe that our choice of loan products, coupled with our personal service will surpass the offerings of any of our competitors.
Your Credit Union would actively encourage you to make greater use of it’s loan facilities. Members who have existing loan facilities with other financial institutions might consider making greater use of their Credit Union. If you wish to transfer a loan you may have with a bank or a PCP we would love to talk to you.
All loan applications are subject to affordability and credit checks.
The Credit Committee ensure lending decisions comply with the Credit Unions policy. The Credit Policy is reviewed on an on-going basis to ensure that our lending function complies with best practice and
Credit Committee Report (continued)
Central Bank guidelines. We apply prudential standards for all new and top up loans. We would like to remind members that it is mandatory to make a Central Credit Register (CCR) enquiry for all loan applications greater than €500 (including existing loan balance where one exists) and PPS numbers are required at the application stage, to enable the CCR check to be conducted.
You are also required to produce proof of address when collecting a loan, example a utility bill dated within the last 3 months. This is required to meet obligations under Anti-Money Laundering Legislation.
The following documentation may be required to support loan applications:
Proof of Income
Payslips (if paid directly into bank or Credit Union, copy of statement will suffice)
Confirmation of any social welfare benefit (if not in paid employment)
Tax Returns (if self-employed)
Bank Statements
Three (3) months bank statements (if the member has a bank account).
We have recently rolled out our digital signature offering which is available now to our members. This offering is available through our online banking facility and will assist in the loan draw down process.
One of our Committee members, Philip Linehan is retiring from the committee. Philip has given many years of loyal voluntary service to our Credit Union and we wish him well for the future.
We would like to thank all of our loan officers and in particular the Loans Department under the stewardship of Traci Hughes and Marian Dennehy, for the professional manner in which they have performed their duties.
In conclusion, we would like to express our sincere thanks and gratitude to all of our members who have borrowed from the Credit Union during the year, and we look forward to serving many more of you during the next twelve months.
Carmel Murphy Chair
Credit Control Committee Report
The Credit Control Committee is committed to working with members who find themselves under financial pressure and are having difficulty in coping with their existing debt. We would urge any Member who is finding it difficult to make loan repayments to contact the Credit Control Department as soon as possible. We guarantee that you will be dealt with in a sympathetic and professional manner. Where a member refuses to make repayments, we may, as a last resort have to take legal action against.
In the last year members have repaid €20.6 million in loans and we recovered €620.3K in impairments. This reflects very positively on your Credit Union and the commitment of our members to repay their borrowings with their Credit union. Loans totalling €320K were put into Recovery, which is less 0.5% of the loan book.
Our provision for bad debts is just over €4.5 million and is equivalent to 6.6% of the total loan book. Based on a review of the performance of all loans we are satisfied that this sum is sufficient to cover any future losses.
First South Credit Union Ltd. is owned by you, the Members, and by borrowing and repaying your loans on time you are helping to build a better and stronger Credit Union for your Community.
We would like to thank Linda Kent our Credit Controller and Anne Hurley for their dedication and hard work during the year. We would also like to thank George Cantwell our CEO for his continued help and support.
Finbarr O’Sullivan Chair
SCHOOL SAVING SCHEME
We’re proud to announce the success of our School Savings Scheme in five local primary schools and one secondary school. This accomplishment is thanks to the hard work and dedication of the teachers, parents and students at these schools.
• Bunscoil Chríost Rí
• Our Lady Of Lourdes GNS
• St Anthonys BNS
Active Students
• Scoil Maria Assumpta GNS
• Gaelscoil Chionn tSáile
• Kinsale Community School
In three primary schools, sixth class pupils are gaining practical skills by helping run their school credit unions.
Dedicated Parents
We’re grateful to the parents in Our Lady of Lourdes GNS, who have volunteered their time to make their school credit union possible.
TY Student Leaders
Transition Year students at Kinsale Community School are leading efforts and educating younger students about saving.
We’ve opened 544 accounts in just a few months, showcasing the strong support from everyone involved.
Thank you to all who have played a part in this initiative.
We’re excited to continue this journey and welcome even more schools and families to join us.
Asset & Liabilities Management Committee Report
The Committee are assigned the responsibility for reviewing, managing and making recommendations to the board of directors on the following:
1. Investments
2. Liquidity
3. Balance Sheet Reserves
4. Capital Reserve Management
At September 30 2024, the Credit Union assets totalled €211.2 million. Our loan book has increased by €9.5 million (16.5%) since last year. The main contribution to this growth was our Mortgage Offering. At year-end our total loans outstanding stood at €67.3 million.
The Board of Directors have increased the maximum savings a member can hold to €50,000. At year end our savings totalled €173.4 million (an increase of €1.51 million). Members savings continue to be covered by the Deposit Guarantee Scheme (up to €100,000). Investments and Cash under management stand at €145.8 million (2023: €151.2 million).
The returns available on our investments is now positive and we received an overall 0.93% return on assets for the year.
The Credit Union’s Total Reserves as at September 30 2024 stood at €32.9 million (2023: €31.8 million). This equates to 15.56% of total assets (2023: 15.23%). Our total Regulatory reserve is 12.66% (2023: 12.14%) of total assets.
Our accounts show a Surplus of €2 million (2023: €1.8 million). The Board of Directors are recommending a dividend of 0.6% which will return €1 million to our members.
The Board of Directors is constantly reviewing costs to ensure that we operate as efficiently as possible. We aim to continue to provide a personal service to our members, whilst ensuring the highest standards of good governance.
Our aim is to ensure First South Credit Union will continue to be one of the premier Credit Unions in the country, offering full financial services with the appropriate risk management.
Blanche Ronayne Chair
2023: €23.8M Loans Issued
€30.4M
2023: 39K Membership
39.5K
€173.4M
2023: €171.9M Savings
2023: €57.7M Loans Outstanding
€67.3M
2023: €31.8M Total Reserves
Total Assets
€32.9M
€211.2M
2023: €208.6M
Membership Officer Report
The role of a membership officer is to ensure that all applicants are eligible for membership.
Who can join First South Credit Union?
You must meet one of the following conditions:
• Residing in the Common Bond
• Employed within the Common Bond
• Attending School / College in the Common Bond
• Residing with a Family member who satisfies any of the above Members can now avail of our Website to join on line at www.1cu.ie.
Acceptable forms of address verification include:
• Government-issued documentation
• Recent bill e.g. Gas, ESB etc.
Acceptable forms of verification of identity include:
• Passport
• Driving Licence
We now have a facility where members can now apply for membership via our on line facility at www.1cu.ie.
Where a member’s marital status has changed and he/she wishes to amend his/her surname, we will require documented confirmation of this change.
To meet our legal responsibilities, Credit Unions have a duty to seek from members written confirmation of identification and address to support their application for membership. In addition we must ensure that due diligence on all existing members is current and up to date. We would appreciate if you have not previously submitted your proof of identification and/or address to the credit union that you provide it when you next call to any of our offices to ensure that we comply with our statutory responsibilities. Members can upload their documentation via our on line portal ww.1cu.ie. Your co-operation with this requirement is greatly appreciated.
During the year our membership increased by 1,336.
Our total Membership at 30th September 2024 stood at 39,898.
In addition, we have 190 Clubs / Association accounts.
SUPPORTING US SUPPORTS YOU
In 2023/2024, First South Credit Union spent over €38,000 supporting 39 groups, clubs, schools and organisations in our community.
Action Group
Turners Cross Climate
Ballinlough Active Retired Association
Turners Cross Summer Scheme
Kinsale Tidy Towns
Ballinlough Summer Festival
Kinsale Lourdes Pilgrimage
St Josephs Active Retired Association
Days of the Week Summer Camp
Morning Star Boys National School
Kinsale Community School VEX Team
St Brendan’s Girls National School
Ballyphehane Community Centre
Directors’ Report
For the Financial Year Ended 30 September 2024
The directors present their annual report and the audited financial statements for the financial year ended 30 September 2024.
Principal activity
The principal activity of the business continues to be the operation of a credit union.
Authorisation
The credit union is authorised as follows:
• Entitled under the European Union (Payment Services) Regulations 2018 to provide payment services.
Business review
The directors acknowledge the results for the year and the year-end financial position of the credit union. The directors expect to develop and expand the credit union’s current activities and they are confident of its ability to continue to operate successfully in the future.
Dividends
The directors are proposing a dividend in respect of the financial year ended 30 September 2024 of €1,037,054 (0.60%) (2023: €869,967 (0.50%)).
Principal risks and uncertainties
The principal risks and uncertainties faced by the credit union are:
Credit risk: Credit risk is the risk that a borrower will default on their contractual obligations relating to repayments to the credit union, resulting in financial loss.
Lack of loan demand: Lending is the principal activity of the credit union and the credit union is reliant on it for generating income to cover costs and generate a surplus.
Market risk: Market risk is the risk that the value of an investment will decrease. This risk can arise from fluctuations in values of, or income from, assets or changes in interest rates.
Liquidity risk: Liquidity risk is the risk that the credit union will not have sufficient cash resources to meet day to day running costs and repay members’ savings when demanded.
Operational risk: Operational risk is the risk of loss resulting from inadequate or failed processes or systems of the credit union, any failure by persons connected with the credit union or from external events.
Global macro-economic risk: There is an economic and operational risk relating to rising inflation rates, disruption to global supply chains and a general uncertainty in the markets as a result of the changing geopolitical landscape.
These risks and uncertainties are managed by the board of directors as follows:
Credit risk: In order to manage this risk, the board of directors regularly reviews and approves the credit union’s credit policy. All loan applications are assessed with reference to the credit policy in force at the
Directors’ Report (continued)
For the Financial Year Ended 30 September 2024
time. Subsequently loans are regularly reviewed for any factors that may indicate that the likelihood of repayment has changed.
Lack of loan demand: The credit union provide lending products to its members and promote these products through various marketing initiatives.
Market risk: The board of directors regularly reviews and approves the credit union’s investment policy and funds are invested in compliance with this policy and regulatory guidance.
Liquidity risk: The credit union’s policy is to maintain sufficient funds in liquid form at all times to ensure that it can meet its liabilities as they fall due.
Operational risk: The operational risk of the credit union is managed through the employment of suitably qualified staff to ensure appropriate processes, procedures and systems are implemented and are further supported with a robust reporting structure.
Global macro-economic risk: The board of directors and management closely monitor the developments of rising inflation rates and disruption to global supply chains and markets, and continue to take appropriate actions to mitigate any possible adverse effects on the credit union.
Accounting records
The directors believe that they comply with the requirements of Section 108 of the Credit Union Act, 1997 (as amended) with regard to books of account by employing accounting personnel with appropriate expertise and by providing adequate resources to the finance function. The books of account of the credit union are maintained at the credit union’s premises at Lower Friars Walk, Ballyphehane, Co. Cork.
Events after the end of the financial year
There have been no significant events affecting the credit union since the year end.
Auditors
In accordance with Section 115 of the Credit Union Act, 1997 (as amended), the auditors Grant Thornton offer themselves for re-election.
This report was approved by the board and signed on its behalf by:
Finbarr O’Sullivan Chairperson of the Board of Directors
Date: 22 November 2024
John O’Shea Member of the Board of Directors
Directors’ Responsibilities Statement
For the Financial Year Ended 30 September 2024
The directors are responsible for preparing the financial statements in accordance with applicable Irish law and regulations. The directors have elected to prepare the financial statements in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (FRS 102). The directors are also responsible for preparing the other information included in the annual report. The Credit Union Act, 1997 (as amended) requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the credit union and of the income and expenditure of the credit union for that period.
In preparing those financial statements the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether the financial statements have been prepared in accordance with applicable accounting standards, identify those standards, and note the effect and reason for any material departure from those standards; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the credit union will continue in business.
The directors are responsible for ensuring that the credit union keeps or causes to be kept adequate accounting records which correctly explain and record the transactions of the credit union, enable at any time the assets, liabilities, financial position and income and expenditure of the credit union to be determined with reasonable accuracy, enable them to ensure that the financial statements comply with the Credit Union Act, 1997 (as amended) and enable the financial statements to be audited. They are also responsible for safeguarding the assets of the credit union and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the credit union’s website.
On behalf of the board:
Finbarr O’Sullivan
Chairperson of the Board of Directors
Date: 22 November 2024
John O’Shea Member of the Board of Directors
Board Oversight Committee’s Responsibilities Statement
For the Financial Year Ended 30 September 2024
The Credit Union Act, 1997 (as amended) requires the appointment of a board oversight committee to assess whether the board of directors has operated in accordance with part iv, part iv(a) and any regulations made for the purposes of part iv or part iv(a) of the Credit Union Act, 1997 (as amended) and any other matter prescribed by the Central Bank of Ireland in respect of which they are to have regard to in relation to the board of directors.
On behalf of the board oversight committee:
Eamonn Collins
Chairperson of the Board Oversight Committee
Date: 22 November 2024
OUR PLEDGE TO SUSTAINABILITY
& COMMUNITY GROWTH
We are proud to share our commitment to Environmental, Social and Governance (ESG) efforts, focusing on the Sustainable Development Goals (SDGs). Your support plays a crucial role in our journey toward a more sustainable future.
EMPOWERING THROUGH EDUCATION
Our financial literacy program, school savings initiatives and debit card offerings for children aged 12+ are designed to empower the youth in our community & build a financial savvy future generation.
REDUCED INEQUALITIES
We have eliminated fees for transactions under €50 and provide affordable credit. In 2023/2024 we issued 213 loans under €1,000, ensuring financial inclusivity for all members.
STRENGTHENING COMMUNITY BONDS
Our vision of “Strengthening our Community” is at the heart of everything we do. We actively support local initiatives through financial sponsorships and community event participation.
CHAMPIONING ENERGY EFFICIENCY
We’ve developed a Climate Champion Team focused on promoting sustainability across our branches. We are also exploring heating and lighting solutions to foster a more energy-efficient environment.
AUDITED ACCOUNTS 2024
Independent Auditor’s Report to the Members of First South Credit Union
Opinion
We have audited the financial statements of First South Credit Union Limited for the financial year ended 30 September 2024, which comprise:
• The Income and expenditure account;
• The Statement of other comprehensive income;
• The Balance sheet;
• The Statement of changes in reserves;
• The Statement of cash flows; and
• The related notes 1 to 30, including the summary of significant accounting policies as set out in note 2.
The financial reporting framework that has been applied in the preparation of the financial statements is Irish law including the Credit Union Act, 1997 (as amended) and accounting standards issued by the Financial Reporting Council including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (Generally Accepted Accounting Practice in Ireland).
In our opinion, First South Credit Union Limited’s financial statements:
• give a true and fair view in accordance with Generally Accepted Accounting Practice in Ireland of the state of the credit union’s affairs as at 30 September 2024 and of its income and expenditure and cash flows for the year then ended; and
• have been properly prepared so as to conform with the requirements of the Credit Union Act, 1997 (as amended).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (‘ISAs (Ireland)’) and applicable law. Our responsibilities under those standards are further described in the ‘responsibilities of the auditor for the audit of the financial statements’ section of our report. We are independent of the credit union in accordance with the ethical requirements that are relevant to our audit of the financial statements in Ireland, including the Ethical Standard for Auditors (Ireland) issued by the Irish Auditing and Accounting Supervisory Authority (IAASA), and the ethical pronouncements established by Chartered Accountants Ireland, applied as determined to be appropriate in the circumstances for the entity. We have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Independent
Auditor’s Report to the Members of First South Credit Union
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the credit union’s ability to continue as a going concern for a period of at least twelve months from the date when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Other information comprises information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed on the other information, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Matters on which we are required to report by the Credit Union Act, 1997 (as amended)
Based solely on the work undertaken in the course of the audit, we report that:
• we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit;
• in our opinion proper accounting records have been kept by the credit union;
• the financial statements are in agreement with the accounting records of the credit union; and
• the financial statements contain all primary statements, notes and significant accounting policies required to be included in accordance with section 111(1)(c) of the Act.
Responsibilities of directors for the financial statements
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements which give a true and fair view in accordance with Generally Accepted Accounting Practice in Ireland, including FRS 102, and for such internal control as they determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the credit union’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
Independent Auditor’s Report to the Members of First South Credit Union
the going concern basis of accounting unless the directors either intends to liquidate the credit union or to cease operations, or has no realistic alternative but to do so.
Responsibilities of the auditor for the audit of the financial statements
The auditor’s objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes their opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs (Ireland), the auditor will exercise professional judgement and maintain professional scepticism throughout the audit. The auditor will also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for their opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the credit union’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the credit union’s ability to continue as a going concern. If they conclude that a material uncertainty exists, they are required to draw attention in the auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify their opinion. Their conclusions are based on the audit evidence obtained up to the date of the auditor’s report. However, future events or conditions may cause the credit union to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves a true and fair view.
Independent Auditor’s Report to the Members of First South Credit Union
The auditor communicates with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that may be identified during the audit.
The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the credit union’s members, as a body, in accordance with section 120 of the Credit Union Act, 1997 (as amended). Our audit work has been undertaken so that we might state to the credit union’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the credit union and the credit union’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Michael Nolan FCA for and on behalf of Grant Thornton Chartered Accountants & Statutory Audit Firm, Limerick
Date: 22 November 2024
Income and Expenditure Account
For the Financial Year Ended 30 September 2024
movement on investment properties (note 11)
of previous impairment on premises (note 10)
impairment losses/(gains) on loans to members (note 5)
The financial statements were approved and authorised for issue by the board and signed on behalf of the Credit Union by:
Finbarr O’Sullivan
Member of the board of directors
Date: 22 November 2024
George Cantwell Chief Executive officer
The notes on pages 37 to 55 form part of these financial statements.
Statement of Other Comprehensive income For the
Financial Year Ended 30 September 2024
The financial statements were approved and authorised for issue by the board and signed on behalf of the Credit Union by:
Finbarr O’Sullivan
Member of the board of directors
Date: 22 November 2024
George Cantwell
Chief Executive officer
The notes on pages 37 to 55 form part of these financial statements.
Balance Sheet
For the Financial Year Ended 30 September 2024
The financial statements were approved and authorised for issue by the board and signed on behalf of the Credit Union by:
Member of the board of directors
George Cantwell Chief Executive officer Finbarr O’Sullivan
Date: 22 November 2024
The notes on pages 37 to 55 form part of these financial statements.
Statement of Changes in Reserves
For the Financial Year Ended 30 September 2024
• The regulatory reserve of the credit union as a percentage of total assets as at 30 September 2024 was 12.66% (2023: 12.14%).
• The operational risk reserve of the credit union as a percentage of total assets as at 30 September 2024 was 0.99% (2023: 1.00%).
The notes on pages 37 to 55 form part of these financial statements.
Statement of Cash Flows
For the Financial Year Ended 30 September 2024
notes on pages 37 to 55 form part of
Notes to the Financial Statements
For the Financial Year Ended 30 September 2024
1.
Legal and regulatory framework
First South Credit Union Limited is registered with the Registry of Credit Unions and is regulated by the Central Bank of Ireland. The registered office of the credit union is located at Lower Friars Walk, Ballyphehane, Co. Cork.
2. Accounting policies
2.1 Basis of preparation of financial statements
The financial statements have been prepared in accordance with applicable Irish accounting standards, including Financial Reporting Standard 102, the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland and Irish statute comprising of the Credit Union Act, 1997 (as amended). The financial statements have been prepared on the historical cost basis.
The financial statements are presented in Euro (€) which is also the functional currency of the credit union.
The following principal accounting policies have been applied:
2.2 Statement of compliance
The financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (FRS 102).
2.3 Going concern
After reviewing the credit union’s projections, the directors have a reasonable expectation that the credit union has adequate resources to continue in operational existence for the foreseeable future. The credit union therefore continues to adopt the going concern basis in preparing its financial statements.
2.4 Income
Interest on members’ loans
Interest on members’ loans is recognised on an accruals basis using the effective interest method.
Deposit and investment income
Deposit and investment income is recognised on an accruals basis using the effective interest method.
Other income
Other income is recognised on an accruals basis.
2.5 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and deposits and investments with a maturity of less than or equal to three months.
Notes to the Financial Statements (continued)
For the Financial Year Ended 30 September 2024
2.6 Deposits and investments
Held at amortised cost
Investments designated on initial recognition as held at amortised cost are measured at amortised cost using the effective interest method less impairment. This means that the investment is measured at the amount paid for the investment, minus any repayments of the principal; plus or minus the cumulative amortisation using the effective interest method of any difference between the amount at initial recognition and the maturity amount, minus, in the case of a financial asset, any reduction for impairment or uncollectability.
Central Bank deposits
Credit unions are obliged to maintain certain minimum deposits with the Central Bank but may also hold an excess over the regulatory minimum. The regulatory minimum deposits are technically assets of the credit union but to which the credit union has restricted access. The regulatory minimum portion will not ordinarily be returned to the credit union while it is a going concern and is separately identified in note 7, Deposits and investments - other. Funds held with the Central Bank in excess of the regulatory minimum requirements are fully available to the credit union and are therefore treated as cash equivalents and are separately identified in note 7, Deposits and investments – cash equivalents. The amounts held on deposit with the Central Bank are not subject to impairment reviews.
2.7 Financial assets – loans to members
Loans are financial assets with fixed or determinable payments. Loans are recognised when cash is advanced to members and measured at amortised cost using the effective interest method.
Loans are derecognised when the right to receive cash flows from the asset has expired, usually when all amounts outstanding have been repaid by the member.
2.8 Provision for bad debts
The credit union assesses if there is objective evidence that any of its loans are impaired with due consideration of economic factors. The loans are assessed collectively in groups that share similar credit risk characteristics. Individually significant loans are assessed on a loan by loan basis. In addition, if there is objective evidence that any individual loan is impaired, a specific loss will be recognised. Bad debt provisioning is monitored by the credit union, and the credit union assesses and approves its provisions and the adequacy of same on a regular basis.
Any bad debts/impairment losses are recognised in the income and expenditure account.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in the income and expenditure account.
Notes to the Financial Statements (continued)
For the Financial Year Ended 30 September 2024
2.9 Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
The credit union adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the credit union. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to the income and expenditure account during the period in which they are incurred.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.
Depreciation is provided on the following basis:
Premises
Computers
Fixtures, fittings and equipment
Office equipment
2% straight line per annum
33.33% straight line per annum
10% straight line per annum
20% straight line per annum
The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the income and expenditure account.
2.10 Impairment of assets
At each reporting date assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If the estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in the income and expenditure account. If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in the income and expenditure account.
2.11 Investment properties
Investment properties are carried at fair value determined annually at each reporting date as derived from an independent market valuation for comparable property adjusted if necessary for
Notes to the Financial Statements (continued)
For the Financial Year Ended 30 September 2024
any difference in the nature, location or condition of the specific asset, with changes in fair value recognised in the income and expenditure account. No depreciation is provided.
2.12 Other receivables
Other receivables such as prepayments are initially measured at transaction price including transaction costs and are subsequently measured at amortised cost using the effective interest method.
2.13 Financial liabilities – members’ shares
Members’ shares are redeemable and therefore are classified as financial liabilities. They are initially recognised at the amount of cash deposited and subsequently measured at amortised cost.
2.14 Members’ current accounts
The credit union provides Member Personal Current Account Services in accordance with Section 49(3) of the Credit Union Act, 1997 (as amended).
2.15 Other payables
Short term other liabilities, creditors, accruals and charges are measured at the transaction price.
2.16 Pension
First South Credit Union Limited participates in an industry-wide pension scheme for employees (The Irish League of Credit Unions Republic of Ireland Pension Scheme) (“the Scheme”). This is a funded defined benefit scheme with assets managed by the Scheme’s trustees. The ILCU is the principal employer of the Scheme and First South Credit Union Limited is a participating employer. The Scheme is a multi-employer defined benefit scheme and there is insufficient information for the credit union to separately identify its share of the Scheme’s underlying assets and liabilities. Consequently, the Scheme is currently accounted for as a defined contribution plan. If an agreement is entered into with the Scheme that determines how First South Credit Union Limited will fund a past service deficit, the credit union shall recognise a liability for the contributions payable that arise from the agreement (to the extent that they relate to the deficit). Refer to note 28 for further detail.
The credit union also operates a defined contribution pension scheme. The assets of this scheme are held separately from those of the credit union in independently administered funds. Employer contributions to the scheme are charged to the income and expenditure account in the period to which they relate. The amount payable at the year end in respect of same was €32,269 (2023: €30,591).
2.17 Holiday pay
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.
Notes to the Financial Statements (continued)
For the Financial Year Ended 30 September 2024
2.18 Operating leases
Rentals payable under operating leases are charged to the income and expenditure account on a straight line basis over the lease term.
2.19 Derecognition of financial liabilities
Financial liabilities are derecognised when the obligations of the credit union specified in the contract are discharged, cancelled or expired.
2.20 Regulatory reserve
The Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 requires credit unions to establish and maintain a minimum regulatory reserve requirement of at least 10 per cent of the assets of the credit union. In instances where the credit union has been approved for long term lending, a minimum regulatory reserve of 12.5 per cent is required. This reserve is to be perpetual in nature, freely available to absorb losses, realised financial reserves that are unrestricted and non-distributable.
2.21 Operational risk reserve
Section 45(5)(a) of the Credit Union Act, 1997 (as amended) requires each credit union to maintain an additional reserve that it has assessed is required for operational risk having regard to the nature, scale and complexity of the credit union. Credit unions are required to maintain a minimum operational risk reserve having due regard for the sophistication of the business model. The directors have considered the requirements of the Act and have calculated the operational risk reserve requirement by reference to the predicted impact of operational risk events that may have a material impact on the credit unions’ business. In addition, the credit union has included in its operational risk reserve a Member Personal Current Account Service operational risk reserve, in accordance with Section 49(3) of the Credit Union Act, 1997 (as amended).
2.22
Other reserves
Other reserves are the accumulated surpluses to date that have not been declared as dividends returnable to members and reserves arising on transfer of engagements. The other reserves are subdivided into realised and unrealised. In accordance with the Central Bank guidance note for credit unions on matters relating to accounting for investments and distribution policy, investment income that has been recognised but will not be received within 12 months of the balance sheet date is classified as unrealised and is not distributable. A reclassification between unrealised and realised is made as investments come to within 12 months of maturity date. The directors have deemed it appropriate that interest on loans receivable at the balance sheet date and the balance of the SPS refund receivable is also classified as unrealised and is not distributable. All other income is classified as realised.
2.23
Distribution policy
Dividends are made from the current year’s surplus or reserves set aside for that purpose. The board’s
Notes to the Financial Statements (continued)
For the Financial Year Ended 30 September 2024
proposed dividend to members each year is based on the distribution policy of the credit union.
The rate of dividend recommended by the board will reflect:
• the risk profile of the credit union, particularly in its loan and investments portfolios;
• the board’s desire to maintain a stable rather than a volatile rate of dividend each year; and
• members’ legitimate dividend expectations; all dominated by prudence and the need to sustain the long-term welfare of the credit union.
For this reason the board will seek to build up its reserves to absorb unexpected shocks and still remain above minimum regulatory requirements.
The credit union accounts for dividends when members ratify such payments at the Annual General Meeting.
2.24 Taxation
The credit union is not subject to income tax or corporation tax on its activities.
3. Judgements in applying accounting policies and key source of estimation uncertainty
Preparation of the financial statements requires the directors to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include:
Determination of depreciation, useful economic life and residual value of tangible assets
The annual depreciation charge depends primarily on the estimated lives of each type of asset and, in certain circumstances, estimates of residual values. The directors regularly review these useful lives and change them if necessary to reflect current conditions. In determining these useful lives management consider technological change, patterns of consumption, physical condition and expected economic utilisation of the assets. Changes in the useful lives can have a significant impact on the depreciation charge for the financial year. The net book value of tangible fixed assets subject to depreciation at the year end was €1,987,767 (2023: €2,074,263).
Provision for bad debts
The credit union’s accounting policy for impairment of loans is set out in note 2.8. The estimation of loan losses is inherently uncertain and depends upon many factors, including loan loss trends, credit risk characteristics in loan classes, local and international economic climates, conditions in various sectors of the economy to which the credit union is exposed, and, other external factors such as legal and regulatory requirements. The provision for bad debts in the financial statements at the year end was €4,472,260 (2023: €3,884,526) representing 6.65% (2023: 6.73%) of the total gross loan book.
Operational risk reserve
The directors have considered the requirements of the Credit Union Act, 1997 (as amended) and have
Notes to the Financial Statements (continued)
For the Financial Year Ended 30 September 2024
developed an approach to the calculation of the operational risk reserve. In addition, the credit union has included in its operational risk reserve a Member Personal Current Account Service operational risk reserve, in accordance with Section 49(3) of the Credit Union Act, 1997 (as amended). The operational risk reserve of the credit union at the year end was €2,094,294 (2023: €2,094,294).
Pension
First South Credit Union Limited participates in an industry-wide pension scheme for employees (The Irish League of Credit Unions Republic of Ireland Pension Scheme). This is a funded scheme of the defined benefit type, with assets invested in separate trustee administered funds. Judgement is required to assess whether the credit union has sufficient information to enable it to account for the Scheme as a defined benefit plan. An assessment has been performed of the information currently available and First South Credit Union Limited has determined that there is currently insufficient information available to provide an appropriate allocation of pension assets and liabilities due to the following:
• Scheme assets are not segregated or tracked by contributing employers. There is insufficient information to appropriately allocate the assets to individual employers as contributions paid are pooled in a single fund and none of the contributing employers have separately segregated asset pools.
• Orphan members are those members (including pensioners) who previously contributed to the scheme where their employer has paid an exit cost and as a result has no further liability to the scheme. A pension liability continues to exist for these individual members. There is uncertainty around where the obligation rests in respect of orphan members currently and into the future.
• The Funding Plan calculations are based on each employer’s share of liabilities at a point in time. This does not infer that each employer is contributing towards its liabilities. The determination of the contribution rate is a point in time assessment and is not updated subsequently for changes in the employers’ liability that may occur in the future. Subsequently, as the profile of the scheme continues to change, there will continue to be a natural cross subsidisation.
Consequently, First South Credit Union Limited continues to account for the plan as a defined contribution plan.
Adoption of going concern basis for financial statements preparation
The credit union continue to closely monitor developments within the global macro-economic environment. The directors have prepared projections and cash flows for a period of at least twelve months from the date of the approval of the financial statements which demonstrate that there is no material uncertainty regarding the credit union’s ability to meet its liabilities as they fall due, and to continue as a going concern. On this basis the directors consider it appropriate to prepare the financial statements on a going concern basis. Accordingly, these financial statements do not include any adjustments to the carrying amounts and classification of assets and liabilities that may arise if the credit union was unable to continue as a going concern.
Notes to the Financial Statements (continued)
For the Financial Year Ended 30 September 2024
4. KEY MANAGEMENT PERSONNEL COMPENSATION
The directors of the credit union are all unpaid volunteers. The key management personnel compensation is as follows.
5. NET IMPAIRMENT LOSSES/(GAINS) ON LOANS TO MEMBERS
6. CASH AND CASH EQUIVALENTS
Notes to the Financial Statements (continued)
For the Financial Year Ended 30 September 2024
7. DEPOSITS AND INVESTMENTS
Notes to the Financial Statements (continued)
9. PROVISION FOR BAD DEBTS
Notes to the Financial Statements (continued)
For the Financial Year Ended 30 September 2024
11. INVESTMENT PROPERTIES
The investment properties have been disposed as at 30 September 2024, and sold at a gain of €65,000.
Notes to the Financial Statements (continued)
For the Financial Year Ended 30 September 2024
12. DEBTORS, PREPAYMENTS AND ACCRUED INCOME
13. MEMBERS’ SHARES
14. MEMBERS’ CURRENT ACCOUNTS
Notes to the Financial Statements (continued)
15. OTHER LIABILITIES, CREDITORS, ACCRUALS AND CHARGES
16.
17. FINANCIAL INSTRUMENTS
17.a ) Financial instruments - measured at amortised cost
Financial assets measured at amortised cost comprise cash and balances at bank, deposits and investments, loans, members’ current accounts overdrawn and other debtors.
Financial liabilities measured at amortised cost comprise members’ shares, members’ current accounts, other liabilities, creditors, accruals and charges and other provisions.
Notes to the Financial Statements (continued)
For the Financial Year Ended 30 September 2024
Notes to the Financial Statements (continued)
For the Financial Year Ended 30 September 2024
19. CREDIT RISK DISCLOSURES
In line with regulatory requirements, the credit union:
• Restricts the concentration of lending by the credit union within certain sectors or to connected persons or groups (concentration limits);
• Restricts the absolute amount of lending to certain sectors to a set percentage of the regulatory reserve (large exposure limit);
• Restricts the loan duration of certain loans to specified limits (maturity limits); and
• Requires specified lending practices to be in place where loans are made to certain sectors such as house loans, business loans, community loans or loans to another credit union.
The carrying amount of the loans to members represents the credit union’s maximum exposure to credit risk. The following provides information on the credit quality of loan repayments. Where loans are not impaired it is expected that the amounts repayable will be received in full.
Notes to the Financial Statements (continued)
For the Financial Year Ended 30 September 2024
20. RELATED PARTY TRANSACTIONS
20.a) Loans
The related party loans stated above comprise of loans outstanding to directors and the management team (to include their family members or any business in which the directors or management team had a significant shareholding). Total loans outstanding to related parties represents 0.69% of the total loans outstanding at 30 September 2024 (2023: 0.33%).
20.b) Savings
The total amount of savings held by related parties at the year end was €945,648 (2023: €848,018).
21. ADDITIONAL FINANCIAL INSTRUMENTS DISCLOSURES
21.a) Financial risk management
The credit union manages its members’ shares and loans so that it earns income from the margin between interest receivable and interest payable. The main financial risks arising from the credit union’s activities are credit risk, market risk, liquidity risk and interest rate risk. The board of directors reviews and agrees policies for managing each of these risks, which are summarised below.
Credit risk:
Credit risk is the risk that a borrower will default on their contractual obligations relating to repayments to the credit union, resulting in financial loss. In order to manage this risk the board of directors regularly reviews and approves the credit union’s credit policy. Credit risk mitigation may include the requirement to obtain collateral as set out in the credit union’s credit policy. Where collateral or guarantees are required, they are usually taken as a secondary source of repayment in the event of the borrower’s default. The credit union maintains policies which detail the acceptability of specific classes of collateral. The principal collateral types for loans are: an attachment over members’ pledged shares; personal guarantees; and charges over assets. The nature and level of collateral required depends on a number of factors such as the term of the loan and the amount of exposure. All loan applications are assessed with reference to the credit policy in force at the time. Subsequently loans are regularly reviewed for any factors that may indicate that the likelihood of repayment has changed.
Market risk:
Market risk is the risk that the value of an investment will decrease. This risk can arise from
Notes to the Financial Statements (continued)
For the Financial Year Ended 30 September 2024
fluctuations in values of, or income from, assets or changes in interest rates. The board of directors regularly reviews and approves the credit union’s investment policy and funds are invested in compliance with this policy and regulatory guidance.
Liquidity risk:
Liquidity risk is the risk that the credit union will not have sufficient cash resources to meet day to day running costs and repay members’ savings when demanded. The credit union’s policy is to maintain sufficient funds in liquid form at all times to ensure that it can meet its liabilities as they fall due.
Interest rate risk:
The credit union’s main interest rate risk arises from adverse movements in interest rates receivable which would affect investment income. The credit union reviews any potential new investment product carefully to ensure that minimum funds are locked in low yielding long term investments yet at the same time maximising investment income receivable.
21.b) Liquidity Risk Disclosures
The credit union’s policy is to maintain sufficient funds in liquid form at all times to ensure that it can meet its liabilities as they fall due. The credit union adheres on an ongoing basis to the minimum liquidity ratio and minimum short term liquidity ratio as set out in regulatory requirements.
Notes to the Financial Statements (continued)
For the Financial Year Ended 30 September 2024
21.c) Interest rate risk disclosures
The following shows the average interest rates applicable to relevant financial assets and financial liabilities.
Any dividend payable is at the discretion of the directors and is therefore not a financial liability of the credit union until declared and approved at the AGM.
22. DIVIDENDS
The following distributions were paid during the year:
The directors propose the following distributions in respect of the year:
23. INSURANCE AGAINST FRAUD
The credit union has Insurance against fraud in the amount of €5,200,000 (2023: €5,200,000) in compliance with Section 47 of the Credit Union Act, 1997 (as amended).
24. COMMITMENTS UNDER OPERATING LEASES
The credit union’s future minimum lease payments at the balance sheet date were as follows:
25. CAPITAL COMMITMENTS
There were no capital commitments at 30 September 2024.
Notes to the Financial Statements (continued)
For the Financial Year Ended 30 September 2024
26. CONTINGENT LIABILITIES
There is a contingent liability included in the letter of authority held by Bank of Ireland with regard to Electronic Funds Transfer in the sum of €120,000 and credit card services in the sum of €75,000.
27. THE IRISH LEAGUE OF CREDIT UNIONS REPUBLIC OF IRELAND PENSION SCHEME
First South Credit Union Limited participates in an industry-wide pension scheme for employees (The Irish League of Credit Unions Republic of Ireland Pension Scheme). This is a funded defined benefit scheme with assets managed by the Scheme’s trustees.
On 31 March 2022, the defined benefit scheme closed to future accrual and although staff retained all the benefits that they had earned in the Scheme to that date, First South Credit Union Limited and its employees ceased making regular contributions to the Scheme and ceased earning any additional benefits from the Scheme.
At the date of closure of the Scheme, there was a past service deficit which was allocated to each participating credit union based on the total benefits earned by staff in each credit union. First South Credit Union Limited’s allocation of that past service deficit was €3,453,782. This cost was included in the income and expenditure account for the financial year ended 30 September 2022. The deficit amount was paid to the trustees of the Scheme during the financial year ended 30 September 2022.
As this is a pooled pension scheme, First South Credit Union Limited remains liable to cover the cost of their share of any future increase in the total cost of providing the pension payments to credit union employees who were part of the Scheme. First South Credit Union Limited could exit the Scheme and therefore never have to make a potential additional payment requirement but exiting the Scheme may incur a substantial additional cost.
If credit unions exit the Scheme, they are required to pay to the trustees the exit amount which the trustees determine is required to fund benefits in respect of their active, deferred and pensioner members on a “no risk” basis. The exiting credit union thereby settles any liability they have to contribute to the Scheme in the future.
28. COMPARATIVE INFORMATION
Comparative information has been reclassified where necessary to conform to current year presentation.
29. EVENTS AFTER THE END OF THE FINANCIAL YEAR
There have been no significant events affecting the credit union since the year end.
30. APPROVAL OF FINANCIAL STATEMENTS
The board of directors approved these financial statements for issue on 22 November 2024.
Schedules to the Income and Expenditure Account
For the Financial Year Ended 30 September 2024
The following schedules do not form part of the statutory financial statements which are the subject of the Independent Auditor’s Report on page 28 to 31.
SCHEDULE 1: OTHER INTEREST INCOME AND SIMILAR INCOME
SCHEDULE 2: OTHER INCOME
Schedules to the Income and Expenditure Account (Continued)
For the Financial Year Ended 30 September 2024
SCHEDULE 3: OTHER MANAGEMENT EXPENSES
PROTECT YOURSELF FROM FRAUD
TIP 1:
First South Credit Union will never call, text, WhatsApp or email you to ask for financial, personal or security information. Do not respond to unsolicited texts, calls, WhatsApp or email messages. If in doubt, call us on 021 496 5134.
TIP 2:
Never click on links or attachments from text or WhatsApp, no matter how genuine they might look. Block a suspect number on your phone immediately and then delete the message.
TIP 3:
Don’t assume a call, text or email is genuine because someone has basic information like your name or address. Criminals use publicly available information to lure you in.
TIP 4:
Always keep PINs, passwords and authorisation codes private. Never give your security details such a full banking password, code/login details or PIN to anyone, even First South Credit Union.
TIP 5:
Always keep your debit and credit cards in sight and details out of earshot when paying for goods and services. Remember to cover your PIN every time you use your card for payment and at an ATM.
TIP 6:
Unsecured public Wi-Fi networks are hotspots for criminals – use your own mobile data (3G or 4G) when shopping or banking online outside of home, and be aware of ‘shoulder surfers’ viewing your screen.
TIP 7:
If you believe that you have been a victim of fraud, immediately contact First South Credit Union or relevant financial institutions and report to your local Garda Station.
TIP 8:
If something doesn’t feel right, it probably isn’t. Stay in control and don’t be rushed into making a decision you might regret. Take your time to do the relevant checks and independently verify any requests.
RE-IMAGINE BANKING
At First South Credit Union, we offer a full range of financial services designed to meet your needs, all in a friendly and welcoming environment. Even though 'bank' isn't in our name, our commitment to providing comprehensive and accessible banking solutions is clear. As a member-focused institution, we prioritise your needs over profit. Experience the convenience and personal touch that make First South Credit Union a refreshing choice for all your banking needs.
The Deposit Guarantee Scheme
Eligible deposits in FIRST SOUTH CREDIT UNION LTD are protected by:
Limit of protection:
If you have more eligible deposits at the same credit institution:
If you have a joint account with other person(s):
Reimbursement period in case of credit institution’s failure:
Currency of reimbursement:
To contact FIRST SOUTH CREDIT UNION LTD for enquiries relating to your account:
The Deposit Guarantee Scheme (“DGS”)(1)
To contact the DGS for further information on compensation:
EUR 100,000 per depositor per credit institution(2)
All your eligible deposits at the same credit institution are ‘aggregated’ and the total is subject to the limit of EUR 100,000(2)
The limit of EUR 100,000 applies to each depositor separately(3)
10 working days(4)
Euro or, for branches of Irish banks operating in other EEA Member States, the currency of that State.
FIRST SOUTH CREDIT UNION LTD LOWER FRIARS WALK BALLYPHEHANE CORK
Tel: 021-4965134
Deposit Guarantee Scheme Central Bank of Ireland New Wapping Street North Wall Quay Dublin 1
Tel: 1818 681 681
Email: info@depositguarantee.ie
1. Scheme responsible for the protection of your deposit
Your deposit is covered by a statutory Deposit Guarantee Scheme. If insolvency of your credit institution should occur, your eligible deposits would be repaid up to EUR 100,000.
2. General limit of protection
If a covered deposit is unavailable because a credit institution is unable to meet its financial obligations, depositors are repaid by a Deposit Guarantee Scheme. This repayment covers at maximum EUR 100,000 per credit institution. This means that all eligible deposits at the same credit institution are added up in order to determine the coverage level. If, for instance a depositor holds a savings account with EUR 90,000 and a current account with EUR 20,000, he or she will only be repaid EUR 100,000. This method will also be applied if a credit institution operates under different trademarks. This means that all eligible deposits with one or more of these trademarks are in total covered up to EUR 100,000.
3. Limit of protection for joint accounts
ln case of joint accounts, the limit of EUR 100,000 applies to each depositor. However, deposits in an account to which two or more persons are entitled as members of a business partnership, association or grouping of a similar nature, without legal personality, are aggregated and treated as if made by a single depositor for the purpose of calculating the limit of EUR 100,000.In some cases eligible deposits which are categorised as “temporary high balances” are protected above EUR 100,000 for six months after the amount has been credited or from the moment when such eligible deposits become legally transferable. These are eligible deposits relating to certain events which include:
(a) certain transactions relating to the purchase, sale or equity release by the depositor in relation to a private residential property;
(b) sums paid to the depositor in respect of insurance benefits, personal injuries, disability and incapacity benefits, wrongful conviction, unfair dismissal, redundancy, and retirement benefits;
(c) the depositor’s marriage, judicial separation, dissolution of civil partnership, and divorce;
(d) sums paid to the depositor in respect of benefits payable on death; claims for compensation in respect of a person’s death or a legacy or distribution from the estate of a deceased person.
4. Reimbursement
The responsible deposit guarantee scheme is: Deposit Guarantee Scheme, Central Bank of Ireland, New Wapping Street, North Wall Quay, Dublin 1.
Tel: 1890-681-681 Email: info@depositguarantee.ie Website: www.depositguarantee.ie
It will repay your eligible deposits (up to EUR 100,000) within 10 working days from 1 January 2021 to 31 December 2023; and within 7 days from 1 January 2024 onwards, save where specific exceptions apply.
Where the repayable amount cannot be made available within seven working days depositors will be given access to the appropriate amount will only be made on the basis of data provided by the credit institution. If you have not been repaid within these deadlines, you should contact the deposit guarantee scheme.
5. Other important information
In general, all retail depositors and businesses are covered by the Deposit Guarantee Scheme. Exceptions for certain deposits are stated on the website of the Deposit Guarantee Scheme. Your credit institution will also inform you on request whether certain products are covered or not. If deposits are eligible, the credit institution shall also confirm this on the statement of account.
COMING SOON
The SEPA instant payments regulation comes into effect in 2025.
This means you will be able to receive money into your account instantly from 9th January 2025 and be able to send instant payments in the coming months certainly by 9th October 2025.
Payments will be made instantly and received within 10 seconds, 24 hours a day, 7 days a week, even at weekends and on bank holidays.
Making a payment will be easy, secure, and quick. It can be sent via an App on a phone, using any other device, or in branch. You decide.
