Istituto di Economia Internazionale - Industry Consolidation and the Performance and Stability of Irish Credit Unions

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Corresponding Author:
John O.S. Wilson, Centre for Responsible Banking & Finance, University of St Andrews Business School, University of St Andrews, St Andrews, Scotland, UK

Coauthors:
Donald McKillop, Queen's Business School, Queen's University Belfast, Belfast, Northern Ireland, UK
Anna Sobiech, Centre for Responsible Banking & Finance, University of St Andrews Business School, University of St Andrews, St Andrews, Scotland, UK; Department of Economics, University of Cologne, Cologne, Germany
Dimitris Chronopoulos, Centre for Responsible Banking & Finance, University of St Andrews Business School, University of St Andrews, St Andrews, Scotland, UK

Industry Consolidation and the Performance and Stability of Irish Credit Unions

July 8, 2026
JEL classification: G21; G28; G34; P13
Keywords: Credit Unions; Consolidation; Mergers; Risk; Performance

Abstract

We investigate the drivers and consequences of merger activity among Irish credit unions during 2012–2023, a period marked by significant restructuring following the global financial crisis and a regulatory overhaul in a small, open EU economy operating within an evolving European supervisory and prudential framework. Understanding these dynamics is critical, given that mergers have become a central strategy for ensuring sector stability amid technological, regulatory, and competitive pressures. Using panel regression analysis, we assess how merger intensity and merger type relate to three core performance metrics. Our findings reveal a nuanced picture and highlight the complexity of merger outcomes. Credit unions that engaged in multiple mergers exhibit consistently higher viability (Z-Score) compared to those with fewer or no mergers, suggesting that consolidation can reduce insolvency risk. Yet they display weaker Capital Ratios and lower ROA, indicating short- to medium-term trade-offs between stability and profitability. Regression results confirm that merger intensity is positively associated with ROA but negatively with capital strength, while having no significant impact on viability. The paper contributes to policy and practice by clarifying the conditions under which mergers support long-term sustainability and by identifying factors that amplify or mitigate merger-related risks.

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Industry Consolidation and the Performance and Stability of Irish Credit Unions

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Institute for International Economics of the Genoa Chamber of Commerce

Institute for International Economics
of the Genoa Chamber of Commerce