Montego, Trelawny credit unions agree to merge

The Trelawny Co-operative Credit Union (TCCU) and Montego Co-operative Credit Union (MCCU) are negotiating a merger that would position the new entity among the top five with assets of J$3.2 billion and a loan pool of J$1.8 billion, once the deal is ratified by members.

The merged entity would have a membership base of 76,000, according to TCCU general manager Winston Tomlinson.

MCCU members were due to vote on the merger yesterday, while TCCU will seek approval on July 30. Each requires a 75 per cent vote in favour to pass.

Trelawny is the smaller of the two outfits with a loan portfolio of J$800 million and asset base of J$1 billion; Montego's loan portfolio stands at J$1 billion and total assets at J$2.2 billion.

COK Sodality, Churches Co-operative and C&W Jamaica Co-operative Credit Union Limited (C&WJCCU) are the three largest credit unions, respectively. Churches is also finalising a merger with GSB Co-operative, but is expected to remain in the number two slot.

Trelawny and Montego have already signed a Memorandum of Understanding agreeing to amalgamate their operations.

The agreement comes several months after exploratory talks and due diligence under oversight by the Registrar of Co-operatives and Friendly Societies and the Jamaica Co-operative Credit Union League, the merger partners said in a release.

The credit union sector has transacted a number of mergers in the past two years, aimed at strengthening their capital structures to align with regulations to be policed by new overseer, the Bank of Jamaica, before the new laws are enshrined.

The last merger to be executed was between C&WJCCU and Clarendon Co-operative Credit Union in January, creating a J$4.3-billion operation deployed across a network of 10 branches.

The Trelawny credit union sees the merger as a capacity-building measure as it positions for an expected uptick in business.

"There will be more liquidity to meet the demands of members," said Tomlinson, noting as well that the deal would allow for the additional management needed in Trelawny.

The parish economy is poised to grow arising from the new cruise ship pier and ongoing real-estate projects, all of which have brought new jobs.

Already, there is an uptick in transportation, Tomlinson said.

Meanwhile, Althea Daley, deputy general manager of MCCU, said the single greatest advantage of the merger would be a larger pool of funds from which to serve members.

Daley said the credit union has seen a downturn in loan demand, though this has been abated somewhat by new interest in loan sales priced as low as 12 per cent.

austanny@yahoo.com