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FHC credit union passes $100m mark in surplus

Published:Friday | May 15, 2015 | 12:00 AMNeville Graham

First Heritage Co-operative Credit Union (FHC) is reporting that it passed the $100 million mark in surplus in December 2014, a gain of more than five per cent.

FHC chairman Orville Hill says the performance was good especially in light of a bumpy ride on the loans market and reduced income from fees.

“This was achieved despite a bearish loan market in which net loan portfolio declined marginally,” said the chairman. Additionally, changes made to FHC’s fee structure resulted in a reduction in fees and commission income by $34m or 19.3 per cent, Hill reported to credit union members at the company’s annual general meeting on Tuesday.

Profit or surplus rose from $98 million to $104 million. FHC closed the year with $8.83 billion in assets. FHC CEO, Basil Naar, said a reduction in the loan portfolio was attributable to an operational decision during the year to suspend unsecured lending for nearly two months in order to bring FHC’s loan portfolio in line with prudential and regulatory requirements.

“Unsecured loans form a big part of our business, somewhere in the region of 20-25 per cent, but based on the liquidity requirements, especially those for the coming Bank of Jamaica regulations, we thought it prudent to bring those numbers down to about 15 per cent,”  Naar said.

The merger with St Thomas Credit Union should bring assets to more than $10 billion, according to Naar, making FHC the second largest credit union in Jamaica by assets behind JTA Co-op Credit Union.

FHC membership currently stands at 160,000. Members approved a dividend of five per cent shares for those on record at December 2014.