A report by RTE News Ireland said Naas Credit Union would no longer enter into a merger agreement with peer Newbridge Credit Union. Naas and Newbridge are local, non-profit financial organizations.
"Having fully investigated a possible combination, the Board of Naas Credit Union established that such a combination would not be in the best interests of the Members of Naas Credit Union. The Board of Naas Credit Union advised the Central Bank in the past week of its decision, ending dialogue on the possible combination option," Naas' statement read.
Newbridge Credit Union was taken over by the state Central Bank via a High Court-appointed special manager on January 2012. Financial problems were found at the said credit union, prompting the central bank to provide bailout options.
As a response to Naas' backing out of the merger proposal, the Central Bank of Ireland released a statement this afternoon, vowing that it would seek another solution for Newbridge.
"However the Central Bank remains committed to the protection of members' savings and is working towards finalising an immediate resolution to the financial difficulties at Newbridge Credit Union. A viable alternative option is being actively pursued which would protect members' savings and ensure continuity of lending and deposit facilities in the community," The Central Bank of Ireland said in its statement.
The central bank had been using the the 2011 Resolutions Act as reference to uphold its right to provide financial bailout options for Newbridge. The mandate allowed the state central bank to step in a business entity which is having financial difficulties. The same mandate also allowed Newbridge to receive EUR50 million from the Credit Union resolutions fund in order to set against the credit union's liabilities.
After Naas' expressed its statement over the failed merger, The Journal said a few credit unions could have the resources to take over Newbridge. The said credit union has some 37,000 members.
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