AGM 2020 Chairman’s Report
The following reports are concerning our last full accounting year, which ended on 30 September 2019. However, since I wrote this, we have been struck by Covid-19 and the whole country is in an unprecedented struggle, involved to ameliorate the effects of this virus so many things seem to have been overtaken by events. My first thought then is that you all will be able to keep yourselves and your families safe from this awful epidemic
The financial year which ended on 30 September 2019 was a busy one. The first three months were characterised by a great deal of ‘behind the scenes’ work to follow through on our two recent mergers with Prince Bishops Community Bank and with Northumberland Credit Union in 2018.
In December 2018, we received a visit from one of our regulators, the Prudential Regulation Authority (part of the Bank of England). This took place because our recent growth has put us into the group of larger Credit Unions, which the PRA visits on a regular basis. The PRA made a number of helpful recommendations which the board accepted and have implemented in full.
A number of directors and staff members have ‘stepped up’ to take over the roles of the directors who unfortunately left the Board, and I am extremely grateful to them for doing so. I want to particularly thank Joanne Angus our Chief Operating Officer for the amazing work that she has done to keep the Credit Union functioning, and also all the staff who have responded magnificently to the challenges we had to face in the last financial year and continue to do so in this financial year. Of course, we could not run our business without our wonderful, dedicated volunteers who run our collection points and work in our offices – so a huge thank you to you all.
I am pleased to let you know that a former member of our Supervisory Committee, John Lavery, a qualified accountant and former accounting lecturer, has taken over as Treasurer of NEFirst. We are very grateful to him for stepping in at very short notice and for his continuing work as treasurer.
In July 2019, it was identified that we had a growing problem of members struggling to repay their loans on time. The Board responded decisively to this problem by making more provision to meet bad and doubtful debts. This involved setting more money aside for provisioning finding ways to reduce costs and tightening-up our lending policy. Those of you who have applied for loans, and those of you who have helped other members to apply will know that we have reduced our maximum loan to £5,000, and we now ask to see members’ bank statements so that we do not lend money to members who will find it too difficult to repay the loans.
I am pleased to tell you that this action has brought the problem firmly under control, but it does mean that we do not have enough money to pay our members a dividend on their savings this year so the Board will not be proposing one at the AGM.
Many of you will know that NEFirst works with a wide range of partner organisations. We are grateful to them all, but this year I would like to thank Durham County Council and Gateshead Council in particular who are our largest and most supportive partners. Their support this year has been crucial and as a result, representatives of both councils have been nominated to join our Board. I would like to thank both councils for their very great support over the last year.
Next year promises to be an exciting one too, especially because we intend to introduce a Mobile Application which will allow all of our members to put money into or take it out of their accounts from their own computer, tablet or smart phone. This will make life so much easier for you all and also allow us to make staff cost savings. However, this system has some upfront costs which cannot be met from our current income, so we intend to introduce an annual charge of £5 on all our adult accounts to help us pay for this. These charges will be reviewed annually.
We also intend to introduce ‘Child Benefit Loans’; these are loans which we grant to families, which are repaid by having their Child Benefit paid directly into the Credit Union. They are ideal for things like white goods, furniture, school uniforms and so on and have been found to be very helpful to families in other parts of the country.
I am sorry that we have had to postpone our AGM this year, but in the meantime if you would like to ask questions of the Board, as you would be able to at an AGM, please email them to us at email@example.com.
In the meantime, may I wish you and your families and friends a happy and healthy year – as safe from the Corona Virus as you possibly can be!
Chair NEFirst Credit Union