ABCUL Annual Report 2011-2012 Forward Together

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ABCUL Annual Report 2011-2012

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3 ABCUL is the main trade association

for credit unions in Britain

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Representing our members to Government, regulators and policy makers

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Promoting credit unions to the media and public

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Providing a range of products and services to help our members serve their members

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Putting on training and conferences for credit unions and people interested in their development

ABCUL is an Industrial and Provident Society owned and controlled by its members. ABCUL is led by a Board of Directors elected from its membership, by its membership.

This report highlights just some of the work of ABCUL and our member credit unions between October 2011 and September 2012, as we work towards achieving our vision that credit unions will become the primary source of affordable, high quality and ethical financial services for the people of Great Britain.

We carry out a range of activities including:

“Credit unions are a tried and

tested alternative to mainstream

banks, and the Find Your Credit

Union website will help you hunt

down your local branch.”

Channel 4 News website

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President’s Welcome

4

I

was delighted to be chosen as the President of ABCUL at such a

dynamic and fast changing time for the credit union sector in

Britain. In the first few months of my term credit unions around

the country were busy making the most of new opportunities

arising from reformed legislation.

Many credit unions have expanded their common bonds to bring in new geographical areas or add in new groups of employees or tenants. Local community groups and both local and national businesses are now also eligible for credit union membership. This is bringing many new partners into the credit union family and the potential for expansion is enormous.

With the knowledge that collaboration is pivotal to the success of other credit union sectors, the Association has formed a new membership company. Cornerstone Mutual Services is working with our members to develop a range of products that will build on and complement the success of the Credit Union Current Account and the Credit Union Prepaid Card. This collaborative approach will help credit unions attract more members and bring efficiencies to credit union transactions.

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During the year we have passed the landmark figure of

1 million people using

credit unions in Britain

. With all the opportunities open to us, and utilising the talent and enthusiasm within the sector, it has to be much less than 33 years before we reach our next million members.

Sharon Angus-Crawshaw ABCUL President

"The Welsh Government is proud to

support Welsh credit unions to promote their services, expand their capacity and

improve their coverage across the

country. Credit unions offer an

affordable alternative to high cost lenders and payday loan companies,

whilst offering a safe place for people to

save their money for that rainy day.”

Carwyn Jones AM

Welsh Government First Minister, May 2012

“Credit unions provide an essential service for communities and we want to help them to extend the support they provide. Credit unions are growing – almost doubling in membership since 2006 – but we want them to be a mainstream option for savers and borrowers just as they are in other countries and to ditch the image of a ‘poor man’s bank’.”

Lord Freud

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Membership Services

W

e introduced a team of Member Relationship Managers so each

credit union had a dedicated contact at ABCUL to keep them up

to date and assist with any queries.

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• Over 130,000 people

visited www.findyourcreditunion.co.ukduring the year and we helped a further 1,000 people who phoned the office to find a credit union they could join.

• Over 200,000 people

visited the ABCUL website for information on credit unions. They viewed over 1.2 million information pages.

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We dealt with

over 6,000 enquiries

and helped our member credit unions with technical queries on nearly 1,400 occasions.

• Over 3,000 credit union staff members and volunteers

are signed up to the members’ section of our website. They took part in nearly one thousand discussionson our forum during the year.

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We helped

over 120 credit unions

change their rules so they could take advantage of new legislation.

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ABCUL Chief Executive visited

all 11 ABCUL Chapters

at least once to update members on the Association’s activities and seek input for plans for the coming year. Chapters held a range of events throughout the year, providing training and networking opportunities in local regions.

“What’s really needed for many

people, especially vulnerable people,

are local, community based

organisations that are there primarily

to help them, and not to try and

make money out of them, and bingo,

that’s what a credit union does, that’s

what we’re opening today, and that

to me is absolutely fantastic.”

Martin Lewis,

from moneysavingexpert.com when he ‘virtually’ opened Hull and East Yorkshire’s new offices in November 2011

“Without the joint working of

Clockwise, STAR and the landlord I

would still be living in a hostel. Four

weeks later and I am living in my

own flat.”

Clockwise Credit Union member

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O

ver 700 credit union staff members and directors accessed ABCUL

training on a wide range of topics from introductions for new

volunteers to bespoke planning days for established directors.

8 Training, Consultancy and Conferences

“We regard the sector as enormously important. We want to see credit unions grow and develop

in an effective and efficient way, delivering support to those in debt at the bottom end of the

income scale, driving to the heart of communities, attracting savings from a broader range of

people and sources, and absolutely at the heart of what we hope to deliver for local communities

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ABCUL also carried out a variety of consultancy projects including feasibility studies and development work for new credit unions.

ABCUL’s flagship conference moved to York in March. The Annual Conference and AGM attracted over 300 delegates who heard from a wide range of speakers including financial journalist and broadcaster Jasmine Birtles and the President and CEO of the World Council of Credit Unions, Brian Branch.

The Northern Money Conference took place in July in partnership with Liverpool John Moores University. It

attracted a varied audience from a wide range of organisations with an interest in credit unions including housing providers, advice agencies and local government.

The first ABCUL Scotland Conference was held in Glasgow in November and provided an opportunity for credit unions and partner organisations to discuss the

unique challenges for the sector in Scotland. Its success

led to a second conference taking place in September.

ABCUL received support for the conferences from the

Co-operative Bank and CUNA Mutual Group.

Training can be accessed in a variety of formats, including self-paced

online learning, virtual interactive seminars or in the classroom.

“Not only do credit unions often give

pretty good rates for savings and

have some impressive Cash Isa rates

too, but, importantly, when you put

money into one of them you are

actually doing good for the

community.”

Jasmine Birtles

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ABCUL provides the secretariat to the All Party Parliamentary Group on Credit Unions (APPG) which held four meetings during the year including a Credit Union Fair, a Summer Reception addressed by Financial Secretary to the Treasury Mark Hoban and a reception at the House of

Lords in support of the Credit Union Foundation, supported by the

Co-operative Group. The group has 164 members in the House of Commons and House of Lords.

The Cross-Party Group on Credit Unions marked International Credit Union Day

with a reception at the Scottish Parliament. It also held meetings on bankruptcy law, the range of services and diverse memberships of Scotland's credit unions, and the potential for credit unions and housing providers to work together to help people deal with the change to

W

e worked with our members to submit 16 consultation responses to UK

bodies including HM Treasury, the Office of Fair Trading, Financial Services

Authority and the Scottish and Welsh Governments.

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Universal Credit. Speakers included the Minister for Energy, Enterprise and Tourism, Fergus Ewing MSP.

The Welsh Assembly Cross Party Group on Co-operatives held a well attended meeting on the future of credit unions in May, at which ABCUL President Sharon Angus-Crawshaw spoke.

Credit unions gained new powers in January 2012, as changes to the Credit Unions Act came into force.

Credit unions can now changes their rules to allow more people to access their services and allow corporate bodies to

become members. Some credit unions can also choose to offer interest on savings instead of a dividend and to offer membership to younger people. Many credit unions have already changed their rules so they can take advantage of the relaxed laws.

Over 200 ABCUL members took part in our free online seminars held in the run up to new legislation to provide guidance on how to put the new legislation

into practice.

Following a Department for Work and Pensions commissioned feasibility study, the Government announced a major investment in a new Credit Union Expansion Project in June. The investment is designed to bring a further 1 million people into credit union membership by 2017, save an additional £1 billion in interest payments by increasing access to affordable credit and do this in a sustainable way.

“The Government has a strong

commitment to support mutuals and

foster diversity in the banking sector,

and I am proud to support credit

unions which serve approximately a

million people in the UK. Looking

ahead, I want to see credit unions

continue to grow to meet the needs of

their members and the communities

they serve.”

Mark Hoban,

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Statistics

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• 36 ABCUL credit unions

grew their membership by

over 25%.

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Glasgow Credit Union became the first credit union in Britain to reach

£100 million in assets.

• Over 1 million people

in Britain now use a credit union.

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In the six years to 2012, credit union membership grew by 65%and savings grew by 80%.

• Over 95%

of the population can now access a credit union because of where they live. Many more people can access a credit union because of who they work for, or organisations they belong to.

A

t the end of September 2012 there were 255 ABCUL

credit unions. The average ABCUL credit union grew its

membership by over 10% in 2011/12.

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1000,000

2006 2007 2008 2009 2010 2011 2012

Adult Members

Loans Savings

Credit unions in England, Scotland and Wales 2006-2012

(using data produced by the FSA from unaudited quarterly returns).

“I feel so much better now that I’m in

control of my money. The credit

union has even got me into the

savings habit. I’m putting a bit away

each week so I have something to fall

back on in the future.

Debbie Young

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13 Communications

Credit unions were featured on the TV and radio on many other occasions during the year, including on BBC’s Rip Off Britain.

Thanks to the support of the Co-operative Bank,

over 4,000 people

received

Credit Union Newsduring the year. The magazine keeps politicians, policy makers, credit unions and their partners up to date with developments in the sector.

26 editions of news@abcul, containing news about the credit union sector and ABCUL members were received by

3,800 email subscribers

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A

communications campaign run by ABCUL to raise awareness

of the changes to legislation resulted in great media

coverage for credit unions at the beginning of 2012. As a

result of the campaign, credit unions were featured 27 times in

national newspapers and in TV coverage worth an estimated

£40,000. Online and regional coverage took the number of

mentions for the sector to over 150 during one month.

“New research by Consumer Focus shows that one-third of consumers are

interested in joining a credit union, but

that two-thirds of these say they

cannot because they do not think they

have one nearby. This is why we believe

linking credit unions to our post office

network could be a perfect match and

help ensure the continuation of the

vital community resource which our

post offices provide.”

Mike O’Connor

Chief Executive, Consumer Focus, May 2012

“You are the only bank that

remembers my name and treats me

as a person.”

Hastings and Rother Credit Union

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Partners

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Barclays

Barclays has provided support for our lending application processing platform and staff have also assisted us with project governance methodologies for our Shared Business Model project.

Co-operative Banking Group

The Co-operative Banking Group continues to support the production and distribution of Credit Union Newsand provided

support for our Annual Conference and AGM and the Northern Money Conference. The Credit Union Current Account is provided in partnership with the Co-operative Bank.

CUNA Mutual Group

As well as being the main supplier of insurance products to credit unions, CUNA Mutual Group provided support for our Annual Conference and AGM, the Autumn Conference and the ABCUL Scotland Conference.

Santander Foundation

The Santander Foundation has provided funding for the development of our lending application processing platform.

So that we can provide an increasing range of services to our members, we work with a range of suppliers including FIS,

Clydesdale Bank and Experian. ABCUL would like to thank all the organisations with whom we have worked over the past year.

A

BCUL receives support from a number of organisations to

help us to ensure members have the tools and resources

they need to serve their members.

“Everyone in all parties will agree

that credit unions perform an

invaluable service in Scotland.”

Fergus Ewing MSP

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15 Shared Services

Working with Experian, and

with support from the

Santander Foundation, we

began building a bespoke

lending application

processing platform. The

platform is the first product

for credit unions that offers

automated lending decisions

with a bespoke scorecard,

created with data from 10,000

real credit union loans, collected

in the first half of 2012.

We set up Cornerstone Mutual Services

Limited, a service company for credit

unions and a subsidiary of

ABCUL. Cornerstone will

be the home for credit

union products and

services as ABCUL

retains its focus as a

trade association.

Within Cornerstone,

and working with

credit unions, we

established the

Shared Business

Model project, a large scale programme

comprising numerous product and service

developments for credit unions.

We continued to provide detailed PEARLS

analysis for around 25 credit unions every

month, with regular PEARLS comparison

reports submitted to chapters. Developed

by the World Council of Credit Unions,

PEARLS allows credit unions to effectively

measure their financial strength and social

effectiveness.

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more credit unions started offering the Credit Union

Prepaid Card, making it the leading prepaid card product

in the sector. By the end of the year, over 60 credit unions

offered the VISA debit card to their members. Two credit unions

added the Credit Union Current Account to their suite of products.

"I save here because I feel it is very community-based. It is brilliant,"

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Accounts

16 Income and Expenditure

£ £ _£ _£

INCOME

Members’ Dues 692,492 674,828

Other income from Membership Services 275,039 290,173

Fee-based Services income 1,289,928 1,918,107

2,257,459 2,883,108 EXPENDITURE

Direct costs of Membership Services 204,698 279,174

Direct costs of Fee-based Services 1,226,639 1,590,372

Staff costs 724,791 808,573

Office costs 170,877 164,010

Professional costs 11,246 31,992

Contribution to WOCCU Glasgow event - 30,000

(2,338,251) (2,904,121)

(DEFICIT) / SURPLUS FOR THE YEAR BEFORE TAXATION (80,792) (21,013)

Corporation Tax charge (1,916) (1,484)

(DEFICIT) / SURPLUS FOR THE YEAR BEFORE TRANSFERS (82,708) (22,497)

Transfer from / (to) designated funds re Chapters 22,820 10,886

Transfer from / (to) designated funds re WOCCU 2011 conference in Glasgow - 30,000

(DEFICIT) / SURPLUS FOR THE YEAR TRANSFERRED TO GENERAL FUNDS (59,888) 18,389

ACCUMULATED GENERAL FUND B/F 399,646 381,257

ACCUMULATED GENERAL FUND C/F £339,758 £_399,646

There are no recognised gains and losses other than those passing through the income and expenditure account.

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17 Balance Sheet

AT 30 SEPTEMBER 2012 2012 ₂₀₁₁

£ £ _£ _£

FIXED ASSETS 28,911 122,115

CURRENT ASSETS

Stock 14,400 2,800

Debtors 472,445 386,492

Cash at bank 1,508,837 1,398,113

1,995,682 1,787,405

CURRENT LIABILITIES

Creditors 1,454,438 1,256,637

NET CURRENT ASSETS 541,244 530,768

TOTAL ASSETS LESS CURRENT LIABILITIES 570,155 652,883

LIABILITIES GREATER THAN ONE YEAR (-) (-)

£570,155 £652,883

SHARE CAPITAL 255 275

ACCUMULATED FUNDS

Designated funds in respect of Chapters 60,142 82,962

Designated funds for office relocation & refurbishment 50,000 50,000

Designated funds for WOCCU 2011 conference -

-Designated funds for research & development 120,000 120,000

General funds 339,758 399,646

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Board of Directors

18 Antony MacRow-Wood

stepped down from the ABCUL Board in March 2012 after 9 years service to

the Association.

Sharon Angus-Crawshaw

was chosen by the Board to take over as President and she

led the following Board at the end of September 2012.

Sharon Angus-Crawshaw President and Director for Wales

Angela Hampson Vice President and Director for Scotland

David Martin Treasurer and Director for Yorkshire/Humber

Derek Buckland National Director

Paul Burton Director for the North East

Alan Hignett National Director

Robert Kelly National Director

Carol McHarg Director for Scotland

Martin O’Donnell Director for the South East

Clive Rix Director for the East

Peter Sloan National Director

Ross Underwood Director for the South West

Kevin Waters Director for the West Midlands

“I am really impressed at the service

and cannot thank Suzanne enough

-she was an absolute star! Whilst

collecting some savings I also

managed to thoroughly discuss my

situation and came away with having

re-consolidated my debts allowing

me an extra £350 per month.”

Blues and Twos Credit Union

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19 ABCUL Staff

ABCUL Chief Executive

Mark Lyonette

has led the Association since 2005. The staff team at the end of

September 2012 comprised:

Sarah Anwar Finance Officer

Clare Atkinson Business Support Team Manager

Matt Bland Policy and Communications Officer

Phil Davies IT Officer

Rosanna Donovan Member Relationship Manager

Anna Douglas Business Support Administrator

Sam Hardwick Project Operations Manager

Maria Heneghan Member Relationship Manager

Hassan Hussain IT Assistant

Karen Knott Web Content and Online Training Co-ordinator

Claire Lewis IT Assistant

Judith McKenzie Executive PA

Frank McKillop Policy & Relations Manager (Scotland)

Maureen Mooney Business Support Administrator

James Moran Member Relationship Manager

Abbie Shelton Policy and Communications Manager

Cara Sherliker Project Manager

Carol Strand Finance and Shared Services Manager

Annette Warne-Thomas Head of Business Development Thanks also to Simonne Barrett, Chris Canhamand

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ABCUL Annual Report 2011-2012

Forward

Together

ABCUL is the main trade association for credit unions in England, Scotland and Wales. For more information on the Association or any of its services, please contact the Head Office:

ABCUL

Holyoake House, Hanover Street, Manchester M60 0AS

Tel: 0161 832 3694

Email:[email protected]

Web:www.abcul.coop

©ABCUL 2013

ABCUL Annual Report 2011-2012 Forward Together