Benchmarking Survey June 2016 Cathal Melia, Audit Partner
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Benchmarking 2016 6thh Annual Benchmarking survey Trends from September 2015 to March 2016 Trends from September 2015 to March 2016 Financials Mergers M Risk and Compliance Strategy
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The Survey y Context €70.0 €60.0 €50 0 €50.0 €40.0
€60.41m €48.37m
€50.48m €42.73m €39.14m €33.49m €39.38m
€30.0
€39.09m
€20.0 €10.0
2016 €33.54m
€18.01m €14.51m
€1.08m €1.24m €1.17m
€0 0 €0.0 Average Assets
Average Shares
2015 2014
€14.47m
Average Avergare Total Average Gross Investments Income Loan Book 3
The Loan Book Lending Restrictions from Central Lending Restrictions from Central Bank 2016
Lending Restriction from Lending Restriction from Central Bank 2015
20%
40.13% Yes
80%
No
58.79%
Yes No
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Increase / Decrease in Loan Book? Increase / Decrease in Loan Book? 100.00% 90 00% 90.00% 80.00% 70.00% 60.00% 50.00% 40 00% 40.00% 30.00% 20.00% 10.00% 0.00%
92.00%
63% 53.84% 2016
46.15%
36%
2015 2014
8.00%
% who saw increase
% who saw decrease 5
The Loan Book The Loan Book What is the Average Change in the value of New Loans issued year to date compared to Prior Year?
5.00%
4 80% 4.80%
4.60%
4.00% 3.00%
2.30%
2016
2.00%
2015
1.00%
2014
0.00% Overall average
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Financials‐ Balance Sheet Financials Balance Sheet Gross Loan Book % Assets
0.4 0.35 0.3 0.25 0.2 0.15 01 0.1 0.05 0
29.81%
2016
35.00%
38 00% 38.00%
30.00%
2015
2014
2013 7
Financials ‐ Investment Performance Financials Investment Performance What is the % Return on Investment? Income expressed as a % of Total What is the % Return on Investment? Income expressed as a % of Total Investment
4.00% 2016
3 00% 3.00%
2015 3.10%
2.00% 1.00%
1.39% 1 39%
2014
1.73%
0.00% 8
Financials‐ Wage costs Financials Wage costs Wages % of Income Wages % of Income
25% 20% 15%
2016 24% 19%
10%
21%
20%
2015 2014 2013
5% 0% g Wages 9
Financials‐ Dividends Financials Did Your CU pay a dividend?
2016 2015 16% Yes
Yes No
84%
No
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Financials‐ Dividend Rates Dividend Rates Financials % Rate of Dividend Paid 1.00% 1 00% 0.90% 0.80% 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00%
0.93% 0.68%
0.69% 0.57%
2016
2015
2014
Series 1
2013 11
Mergers Has your CU been involved in Merger Discussions with other CU’s 67.50% 80.00%
54.10%
60.00%
45.90%
32.50% 2016
40.00%
2015
20.00% 0.00% Yes
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Mergers What are your Credit Union'ss merger plans for the next 3 years? What are your Credit Union merger plans for the next 3 years?
5.40% 18.90%
16.20%
None Stay as we are but open to approached
29.70% 29.70%
Integrate/ complete mergers already in progress p g Actively seeking a merger Other
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Mergers What was the biggest challenge in implementing merger?
80
76 68
70
66
63
61
60
54 48
50 40 30 20 10 0
Board Consensus
IT Intergration
Merger Integration
Increased Profitability
HR Intergration
Resources to handle Diversion from the project normal business
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Risk & Compliance Risk & Compliance How are Risk, Compliance and Internal Audit of your CU resourced?
100%
93%
80%
63%
57%
60%
Internally
40% 20% 0%
33%
27% 0%
7%
Internal Audit Function
10%
10%
Externally Shares
Risk Management Compliance Officer Officer 15
Risk & Compliance Risk & Compliance What Risk Management software do you use? What Risk Management software do you use? 36.70%
36.60%
40.00% 35.00% 30 00% 30.00% 25.00%
16.70%
20.00%
10%
15.00% 10.00% 5.00% 0.00% g RISC Manager
ViClarityy
CalQRisk
Other 16
Risk & Compliance Risk & Compliance What are the top 3 obstacles to embedding risk & compliance further?
> Human resources/ time (100% of Respondents) > Lack of Skills/Knowledge/Training(60%) Lack of Skills/Knowledge/Training(60%) > Staff Buy ‐In > Constant regulatory change 17
Risk & Compliance Risk & Compliance TOP 5 RISKS TOP 5 RISKS 90% 80% 70%
% of R Respondents
60% 50% 40% 30% 20% 10% 0% Declining Income/Viability
IT Failures
Regulatory Breach
Lack of Resources f (staff and Board)
Credit Risk
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Risk & Compliance Risk & Compliance Has your CU had a PRISM review from the Central Bank in the last 12 months? Has your CU had a PRISM review from the Central Bank in the last 12 months?
43.30% 56 70% 56.70%
Yes No
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Risk & Compliance Risk & Compliance What are the TOP 3 issues which arose from your PRISM visit? your PRISM visit? > Succession planning > Strategic plan/Stress Testing > IT security
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Strategy Did the board/ management take a day out to review and update the strategic plan in the last 12 months?
32.40% Yes 67.60%
No
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Strategic Plan Strategic Plan When was your Strategic Plan last re‐visited
63.40% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%
54.10%
24.30% 22.00% 13.50%
0‐3 mths
3‐6 mths
2016 12.20%
6‐12 mths
2015 8.10%
2 40% 2.40%
12‐24 mths 22
Strategy How Effective is your Board? 0% ‐ 25% effective 3%
75% ‐ 100% effective 41%
25% ‐ 50% effective 24%
50% ‐ 75% effective 32%
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Strategy What is your biggest challenge in implementing your Credit Union Strategy?
2016
21%
2015 Growing Loan Growing Loan Book
12% 19% 34% 24% 38%
42%
9%
Central Bank People Resources Other
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Strategy Is the ILCU advanced organisation proposal a strategy you intend to pursue?
27.80%
22.20%
Yes
Other include: Other include: ‐ No board decision ‐ Need more information ‐ Not sure yet Not sure yet
No Other 50%
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Strategy On a scale of 1‐10 how effective is your strategy implementation
No sign of improved financial performance > Significant concern in relation to viability from Regulator and Sector > Risk and compliance functions getting bedded in > Selecting the correct strategy and implementing it are proving difficult > Resources are coming under pressure from trying to meet Strategic as Risk & compliance needs
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Thank You
Name Cathal Melia Title Audit Partner Russell Brennan Keane T: +353 9064 80600 E:
[email protected] Disclaimer While every effort has been made to ensure the accuracy of information within this publication is correct at the time of going to print, Russell Brennan Keane do not accept any responsibility for any errors, omissions or misinformation whatsoever in this publication and shall have no liability whatsoever. The information contained in this publication is not intended to be an advice on any particular matter. No reader should act on the basis of any matter contained in this publication without appropriate professional advice.
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