Talking Credit Unions with Chris Smith

Credit Union Mergers - A strategic opportunity? EDITION 17

February 02, 2021 Chris
Talking Credit Unions with Chris Smith
Credit Union Mergers - A strategic opportunity? EDITION 17
Chapters
Talking Credit Unions with Chris Smith
Credit Union Mergers - A strategic opportunity? EDITION 17
Feb 02, 2021
Chris

An interview with Robert Kelly CEO at ABCUL (Assoc. of British Credit Unions Ltd).

I was really interested in the news that ABCUL are to launch a Strategic Merger Taskforce. Robert Kelly, CEO at ABCUL, once again appears to tackle subjects that appear sometimes to be difficult to deal with but nevertheless are really of the moment. Credit Union mergers, or transfer of engagements, in the past have typically been a way of saving a struggling credit union from failure, by being absorbed into a healthier partner. However, could two, or more, credit unions join; and become strategically stronger by merging from a position of strength of their combined healthy businesses? 

This new task force should have its work cut out in helping understand what role mergers in boosting the sustainability drive for credit unions. A great deal has been said in recent times about the need for collaboration between credit unions and I know there are collaboration projects out there that are doing well, but I wonder if there is a co-operative way forward, it  could be a jointly owned ‘CUSO’s (credit union service organisations) or in some cases a strategic merger? It has to be said that sometimes, following mergers of any business, scale economies lead to tough outcomes for some stakeholders and I hope the boards of our credit unions are ready for that?

Here's some of the questions I put to Robert:

  • Tell us about the Strategic Merger Taskforce?
  • What is a ‘strategic merger’ and why is ABCUL taking a role in facilitating this? Is there a lot of interest among ABCUL members?
  • If credit unions are doing well, why would they take the risk of merging and fixing something that isn’t broken?
  • What makes mergers successful, in your view? And what are the pitfalls?
  • Is “merger” misleading? Aren’t the successful examples where it’s really an acquisition, i.e. where a successful leadership team effectively absorbing a new group of members into their existing arrangements?
  • Perhaps some CEO's or board directors holding on to their positions, when this might be against their members’ interests? 
Show Notes

An interview with Robert Kelly CEO at ABCUL (Assoc. of British Credit Unions Ltd).

I was really interested in the news that ABCUL are to launch a Strategic Merger Taskforce. Robert Kelly, CEO at ABCUL, once again appears to tackle subjects that appear sometimes to be difficult to deal with but nevertheless are really of the moment. Credit Union mergers, or transfer of engagements, in the past have typically been a way of saving a struggling credit union from failure, by being absorbed into a healthier partner. However, could two, or more, credit unions join; and become strategically stronger by merging from a position of strength of their combined healthy businesses? 

This new task force should have its work cut out in helping understand what role mergers in boosting the sustainability drive for credit unions. A great deal has been said in recent times about the need for collaboration between credit unions and I know there are collaboration projects out there that are doing well, but I wonder if there is a co-operative way forward, it  could be a jointly owned ‘CUSO’s (credit union service organisations) or in some cases a strategic merger? It has to be said that sometimes, following mergers of any business, scale economies lead to tough outcomes for some stakeholders and I hope the boards of our credit unions are ready for that?

Here's some of the questions I put to Robert:

  • Tell us about the Strategic Merger Taskforce?
  • What is a ‘strategic merger’ and why is ABCUL taking a role in facilitating this? Is there a lot of interest among ABCUL members?
  • If credit unions are doing well, why would they take the risk of merging and fixing something that isn’t broken?
  • What makes mergers successful, in your view? And what are the pitfalls?
  • Is “merger” misleading? Aren’t the successful examples where it’s really an acquisition, i.e. where a successful leadership team effectively absorbing a new group of members into their existing arrangements?
  • Perhaps some CEO's or board directors holding on to their positions, when this might be against their members’ interests?