2018 Annual Review - Capital Credit Union
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Capital Credit Union, 62 Hamilton Place, Edinburgh EH3 5AZ
e: enquiries@capitalcreditunion.com | t: 0131 225 9901 | w: capitalcreditunion.com
Capital Credit Union Ltd is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct
Authority and the Prudential Regulation Authority. Firm reference number 213575. We are covered by the Financial Services
Compensation Scheme therefore your savings are secure up to £85,000. For further information visit the FSCS website
www.fscs.org.uk or call 0800 678 1100
Annual Review
2018
A note from the President
As Capital Credit Union hits a significant milestone I
hope you will indulge us in this Annual Review as we look
back not only on the last 12 months, but on the 30 years
Contents since we launched. Much has changed in that period and
Page is set to change further for the organisation in the next
A note from the President 1 year, but I’m delighted to report that members are still
A message from the CEO 3 at the heart of everything we do. That is a constant.
An interview with John Cormack 4
I was privileged to hold the position of President during I am also particularly proud of the role Board members
‘People, Not Profit’ campaign 5 our 20th celebrations and by coincidence am enjoying a and senior staff play in promoting the credit union
second term of office as we hit 30 in the next year. I can movement nationally and internationally through the
The highlights 1989 - 2018 6
say with confidence that your credit union is thriving as Development Education (DE) programme. We have been
The employers’ views 8 it gets older and indeed our routine inspection by the at the forefront of developing credit union leaders of
Prudential Regulation Authority (PRA) was extremely the future around the world and this is an important and
Developing talent for the future 10 positive. I firmly believe we are a well run and forward ongoing aspect of our responsibility in the sector.
thinking organisation and welcome continued oversight
From Hill Street to Hamilton Place 11
from our regulator. Finally I should like to pay tribute to my fellow Board
Annual Accounts Summary 12 members and the staff team for their considerable
It will be difficult to review the last year without efforts during the last year. I should also like to officially
mentioning the ‘B’ word so I will get that out the way welcome Yasmin Guven who joined the Board earlier this
early. Brexit has had an impact on us, engendering a year.
climate of borrowing caution amongst members.
The fact that we have emerged stronger and better
This lead to a difficult first quarter of the year and I equipped to serve our members and meet their needs
should like to pay tribute to my fellow Board members than before is a tribute to the diversity of skills and
and the senior management team for their foresight and knowledge on the Board and the tremendous hard work
efforts as we addressed the particular challenges that an of the staff. My thanks to all of them and to our members
uncertain economic climate produced. for their continued support.
In particular, we examined and subsequently changed
our lending criteria and we also controlled costs
very closely. This combination, allied to an upgraded
IT system, resulted in a greatly improved financial Donald Urquhart,
performance for the remainder of the year. I am pleased President
to report that we made an improved surplus on last year
and further financial information is contained elsewhere
in this Review.
-1-
A message from the CEO
It is hard to believe that another
year has past and that this is the
30th Capital Credit Union Annual
Report. Where has the time gone?
It seems like just yesterday the (then) Lothian Regional Council was deciding
to set up a new employee benefit, a credit union for staff. How things have
changed since that time. We are now serving over 23,000 members, exactly
the number of employees that worked for the Council way back in 1989. We
have loaned to our members over £175m in 30 years and members have saved
Marlene Shiels, OBE over £350m. What an achievement. I was very lucky to work for the Council’s
Chief Executive HR Department and was around when the decision was made to set up the
Credit Union, and became a member on the very first day of operation. It
was several months before I got involved as a volunteer, and thanks to the
Key fact:
encouragement of one of our founding members, John Cormack, I became
a Board Director in those early days. I spent 9 amazing years on the Board,
Value of filling roles such as Secretary, Vice President and President, under the early
mortgages mentorship of John Cormack and Maureen Docherty. John, continuing as
paid out my mentor for over 20 years.
£16m “...we live our
Fast forward, how much have we achieved together?
Capital Credit Union is recognised as one of the most progressive credit
philosophy of unions in the UK, from being invited to sit on Government think tanks,
being amongst the first credit unions to offer mortgages, current accounts, a
people helping lottery and joint accounts, and having the first ever Board member from the
UK sitting on the board of the World Council of Credit Unions, the list of
Key fact: people. It’s in achievements for CCU is pretty long. Why, because we live our philosophy
of people helping people. It’s in our DNA.
our DNA.”
Value of From the many amazing volunteers over the years, including our current
savings paid in President Donald Urquhart, to our longest serving Director Alex Spence, to
£350m
the talented staff pool, our people are what makes us different.
The past year has seen us achieve good results, despite some difficult early
Someone once said months as a result of Brexit and a lack of confidence in the markets; we have
continued to grow our membership, our profits and this year we also asked
that ‘politics, poetry and our members what they want from the Credit Union. Our members advised
us “CCU is great but is a bit old fashioned”. Well, we are listening.
promises are all lies, but
Key fact:
numbers don’t lie’ and we Over the next few years our members will see some significant changes in
how we deliver products and services. We are currently developing plans to
are proud of our facts and Value of adopt technology in a way that will see our products and services become
quicker, slicker and easier to access. From becoming a member to setting
figures. Our key financial loans paid out up accounts, moving funds and getting a loan, there will be improvements
achievements for our
£172m
over the coming months and years. We are also working hard to improve
communications and ensure more people know about CCU and can access
members over the last 30 this great organisation that cares about its members.
years total in excess of So here is to the next 30 years, I won’t be around for all of it, but look forward
half a billion pounds. to working with the talent on our Board and Staff team to deliver a credit
union we can all be proud of, a credit union that is open to everyone.
-2- -3-
An interview with John Cormack ‘People, Not Profit’ campaign
John Cormack’s impact on the credit union movement
in Scotland cannot be overstated. Indeed he has ended
up as a World Ambassador, an honour he neither
expected nor sought.
There is no doubt that he is the only North Edinburgh Credit Union and said
person who will play down his role and the he was overwhelmed with offers of
immense contribution he has made to credit help: “During a breakout seminar all the
unions generally and Capital Credit Union delegates introduced themselves and
in particular over the last three decades as spoke about their organisations. I said
the Vice President, President and Secretary. that we had been operational for just five
months and had 55 members. I couldn’t
The 72 year old is now enjoying retirement believe the support I got and everyone was
in East Lothian, but the memories of literally throwing their business cards at
helping to get what is now Capital Credit me. The Irish delegates in particular were
Union launched in the 80s are still vivid. He incredibly helpful and there is no doubt
recalls: “Credit unions were an unknown having such support at the outset made life
quantity so it was, in some respects, a leap much easier.”
of faith to set them up. But the philosophy We were delighted to host the high profile launch
was easy to sell as it’s difficult to argue against the idea of John also acknowledges the tremendous support from
people helping people.” key staff at Lothian Regional Council, especially Head of of the Scottish Government’s ‘People, Not Profit’
Personnel Tony Martin, Angus Skinner from the Social
That ideology was what drove him in the early days and it has Work Department and Convener Paul Nolan, plus Marlene campaign to promote credit unions.
also kept his enthusiasm for the movement as fresh today Shiels, who went on to become (and still is) Capital’s Chief
as it was then. He is understandably proud when he talks Executive. The official launch by Aileen Campbell, Cabinet “I’m a member of a credit union myself and so I know
about how Capital has grown and delights in the fact that the Secretary for Communities and Local Government, first-hand the benefits they offer. What’s important to
organisation is bigger than half of the credit unions in the US, As he reflects back over 30 years, John highlights a few key took place at our Hamilton Place office in November me is that they are owned by the people who actually
which is a vibrant and thriving location for the movement. moments as game changers for the organisation. The move and was also backed by actor Michael Sheen. use their services and any profits they make are invested
from manual book keeping to an IT system was pivotal back into the credit union.”
That growth, to an organisation of 23,000 members with in the growth story, but not without its problems. A team
assets of £33 million, would have been hard to imagine in the of dedicated volunteers had spent a weekend putting all The survey also highlighted that only 39% of those
early days when credit unions were restricted to a common records onto a computer system only for one person to hit questioned thought they would be eligible to join a
bond – the area in which it can operate – of just one square the wrong button wiping everything that had been done! credit union and that 28% wrongly believed that credit
mile and a maximum number of members of just 5,000. unions made profits for shareholders, just like banks.
He also recalls the time that the organisation’s assets hit the
Capital Credit Union was launched to serve staff at the then £1 million mark, but says it wasn’t a time for celebration, just At the campaign launch Aileen Campbell said: “In
Lothian Regional Council and its first promotional push a determination to keep growing. And he still recognises that helping build a fairer Scotland, we want to protect
produced 600 applications – not a bad start for John acting culture and ethos in Capital today: “What we can’t forget is people from getting into unmanageable debt and
as the first secretary. the basic premise of credit unions. It’s still about people falling into the hands of predatory, high cost lenders.
helping people and I’m delighted at the way the organisation A key part of this is making sure that people are aware
The launch and growth had involved a lot of political is flourishing.” of the financial services and fair alternatives available,
manoeuvring and a campaign to later include other employers including credit union membership.
within the common bond. The trade union movement was So does John have a final message to the membership? The TV and film star had earlier visited our office to
used to promote the credit union in the early days and John “It’s your organisation. Before you borrow anywhere, check record a promotional video to help raise the profile of “Our new campaign will highlight the benefits of
describes it as ‘an easy sell as the rates were so good’. Capital first. If they’re not the best offer, tell them. If they credit unions after a new survey highlighted that one joining a credit union and I would encourage everyone
The support he received at the outset from a variety of are, use them.” in five people in Scotland had not heard of them. He to visit a new website which has been launched to help
sources was staggering. He attended the World Council said: “I’m very pleased to be backing the ‘People, Not people find out more.”
of Credit Unions first UK meeting in London representing And who can argue with a World Ambassador! Profit’ campaign and I share the Scottish Government’s
ambition to grow and raise awareness of this sector.
The new website can be found at: www.CreditUnions.scot
-4- -5-
The highlights 1989 – 2018
be r s:
num
CCU
The Milestones T he
Registered in 1989 to serve local government employees employed by Over
Lothian Regional Council (registered June, trading began in September 1989)
23,000
Members
(3,500 members that have
1994 Changed name to Capital Credit Union (CCU) from Lothian Regional Council
Employees Credit Union to reflect changes coming because of re-organisation.
fewer financial choices)
Over
1996 Local government re-organisation – changed from serving just employees of LRC to
£33m
serving staff from 5 local authorities – employees and their families 2015 CCU lead credit unions in the
introduction of the CIOBS Assets
2001 First Mortgage product offered to members accredited Credit Union Module –
funded by NCUF
2002 Credit Unions get a new regulator and new common bond – opened to everyone living
or working in the Lothians. New compensation scheme for members savings CCU becomes a member of the Building Over
2003 Transferred 4 credit unions into CCU
Societies Association
£21k
Loans
2004 CCU started the Development Education (DE) programme in Edinburgh 2016 CEO awarded OBE for services in
financial services in UK and internationally
2005 CCU key driver and founder of first Credit Union Current Account
Transferred Angus Credit Union to Capital Credit Union
Became a “growth fund” credit union – opened up membership to people with fewer
financial choices 2018 Reached £33m in assets
The employers’ views
Paul White, Chief Executive, Angela Bell, Depute Head Teacher,
ELCAP Tynecastle High School
Credit unions connect people to their communities and my which is that Capital does all the work and it makes saving Schools, like many businesses, have multiple stakeholders Added to that, one of our pupils, Jessica Townsley, went on
message is simple – everyone should consider membership. easy. and we are always trying to develop new ways of engaging valuable work experience with Capital and we would like to
I have to declare a particular interest in them, as I currently and helping those with whom we have relationships. develop this and a financial education agenda going forward.
Our staff also have access to affordable borrowing and
chair another credit union that serves the voluntary sector.
too many high street lenders these days want to give you As we juggled the needs of our pupils, parents and staff Jessica’s reflections… I feel that this work experience really
I know what they stand for and the good work that they do.
more than you need. A credit union’s approach to lending it struck me that, as a recent credit union convert, Capital helped me know what I would like to do after I leave school.
ELCAP has a long-standing relationship with Capital that is is entirely ethical and we have developed a very positive could play an important role in our community. It is vital in a Seeing how each different part of their business works and
driven by mutual principals and a shared ethos. relationship with Capital that creates opportunities for our values based organisation that any partner we take on should how every department has their own roles has really helped
staff. share our ethos. me in Higher Business Management as I have witnessed
It is an appealing partnership that encourages our staff to
all of these roles in person. My work experience at Capital
save through the payroll deduction scheme, the beauty of As we explored a link with Capital it emerged that many of
Credit Union has really helped with my confidence and I am
our staff were already committed supporters of credit unions
very grateful to have had this opportunity.
attracted by their not-for-profit status and their outlook of
David Fiddler, Head of Services, helping those less fortunate. Payroll deduction was a major
Community Trade Union attraction for us to encourage a savings culture.
At Community we are all about creating partnerships to Our members work across all sectors and as an open union
benefit our 30,000 members around the UK. we also welcome retired members, students and those
seeking work. It is important to us that our members engage Frank Ross, The Lord Provost of Edinburgh, said:
We are extremely careful that we build relationships with
with an organisation that encourages saving and provides
like-minded organisations that share our beliefs and ethos “For 30 years now, Capital Credit Union has been one of the “After local government reorganisation, the City of Edinburgh
responsible lending in an era when payday lenders have
and we are therefore delighted to now have Capital Credit most successful credit unions in the UK and it still is today. Council - staff and Councillors – have continued to support
brought financial hardship to many. Community and Capital’s
Union as a trusted partner. and champion Capital because of its ethical, member driven
philosophies are very much aligned.
We signed up with Capital in May 2018 and have been “It is incredible to think that it started out life as a credit approach and people-friendly reputation. People really are
I look forward to building on this excellent start and union just for Lothian Regional Council employees but has at the heart of everything they do which is why Capital and
developing a marketing strategy to promote the organisation
developing a stronger relationship with Capital to help expanded and grown into an important player in the city’s the Council have enjoyed a lengthy and mutually beneficial
to our members. Like us, they put their members at the
promote responsible financial behaviour to our members. financial services sector and an important employer in its relationship over many years. The links remain very strong to
forefront of everything they do and I have been delighted
with the professional and responsive way they have own right. this day and I wish the team every success in 2019.”
approached their business dealings with us so far.
Capital Credit Union in East Lothian
Willie Innes, East Lothian Council Leader Key fact: Key fact:
Value of Contribution
The Council and Capital Credit Union enjoy partnership As the membership of Capital Credit Union continues to from lottery for
working through the introduction of a regular service in grow we are looking to support expansion of their services lottery prizes educational purposes
Prestonpans. The closure of the last remaining bank in the with possible new outreach services in Council offices in paid out paid out
£1.3m
town meant many local residents faced financial exclusion. Tranent and Musselburgh.
Capital Credit Union offers an alternative banking service
including savings, loans and mortgages in an ethical, not-
for-profit way regardless of an individual’s economic
£1.1m
circumstances.
IN PICTURES
1999 2000
1999 - 10th anniversary Early 2000 - Member, Margaret McKay Early 2000s - John Cormack 2004 - Graduate of first DEUK Programme Mid 2000s - Sir Paul Grice, CEO Mid 2000s - Lyndsay McIntosh MSP (Con), 2005 - Meeting with PM Tony Blair
celebrations opens bakery with CU loan Scottish Parliament signs up as John Cormack, CCU Director & Sir David Steel at Downing Street
-8- select employer MSP (Presiding Officer)
Developing talent for the future From Hill Street to Hamilton Place
It’s enlightening how a brief chat with a matriarchal figure people in the UK going through the programme, that Not many people will get grandchildren and partners and great grandchildren
can have a long lasting impact on the sector in which you delves into the history and philosophy of the movement as their introduction to credit signed up. Add in members of his wider family and
work. well as more practical elements of corporate governance unions from a cult TV literally hundreds of colleagues who he has introduced
and operational activity. It encourages participants to cop drama. But then Alex to credit unions and you can see why Capital’s Chief
Around 15 years ago Rose Dorman, a hugely respected and
learn from each other as much as from the line up of Spence is not your average Executive, Marlene Shiels, describes his contribution as
key figure in the UK’s credit union movement, spoke to
international speakers and to then give back. member having served ‘simply immense’.
Capital’s Chief Executive about an education programme
variously as Director,
she had come across from her work at the World Council. Capital lead the way at the outset and remains at the Alex’s crusade started when he joined the Board at the
Treasurer, Vice President
forefront of DE programmes both here and abroad. organisation’s first ever AGM and he remains involved
That conversation lit the touch paper for Marlene Shiels and President since
Indeed the organisation has lead by example putting and an enthusiast to this day. He was working with the
and the Capital Board to lead the education charge for Capital’s launch in 1989.
more staff and Board members through DE programmes Waterboard at the time and says it was John Cormack
staff and trustees around the UK and beyond that is still
than any other UK credit union and has helped launch The 70 year old first stumbled across the movement when (featured elsewhere in this Review) who first got him
thriving and growing today.
programmes in both Europe and Africa. Staff and Board a character in the hugely popular US series, Hill Street involved. He said: “I never imagined the affect it would
One fact-finding trip to the US later and this country’s first members still run programmes today. Blues, was advised to go and see his credit union. With no have on my life. I’m extremely proud of the work done by
Development Educator (DE) Programme was launched Google available in those days he did some old fashioned Capital Credit Union and we can only help our members
There is now a worldwide network of over 4,000 DEs who
at Heriot Watt University in Edinburgh in 2004, run by digging to find out what a credit union was – and so the because we are a very well run organisation.”
have benefited from the five, six or seven day programmes
Marlene and former ABCUL President Mary Henderson. journey began.
of experiential learning. And many of those have Capital Alex has also had an impact in the wider movement and
And that drive to improve standards in and understanding Credit Union to thank for their development. One of the roles of a credit union Board member is to launched a charitable foundation in 2003 that supports
of credit unions has subsequently resulted in over 600 promote the movement and encourage others to join. the work of credit unions and their members. He has
And few have taken on this aspect of the role with such represented the foundation at various World Council
alacrity as Alex, Capital’s longest serving Director. meetings as part of a wider role.
A trawl through the membership will reveal a lot of He accepts the time to step away will come at some point,
people sharing his surname and he cites the support and but for now he is still happy to stay involved helping new
Key fact: Key fact: encouragement from his wife Yvonne as a key part of his Board members and younger volunteers learn the skills to
Capital journey. Indeed there are four generations of his help drive Capital forward.
Value of Value of family who are members, with his daughter and husband,
grants paid out donations paid
out to CCU Trust
from CCU Trust from CCU
£0.2m £0.2m
IN PICTURES
2009 2018
2009 - 20th anniversary 2009 - WOCCU Board 2010 - John Cormack receives ‘Distinguished 2011 - Marlene Shiels 2012 - HRH Duchess of Rothesay 2018 - Staff ‘Long Service Awards’ 2018 - The CCU Sleep Out Team supporting
celebrations Marlene Shiels, only British person to sit Service Award’ from Manuel Rabines, WOCCU & Gordon Brown MP with member Neve Green Social Bite Ending Homelessness campaign
on the WOCCU Board President, & Pete Crear, WOCCU CEO.
Capital Credit Union Annual Accounts Summary Total Expenditure 2018
Year ended 30th September 2018
Revenue Account for the year ended 30th September 2018
£ £
2018 2017
Loan Interest 1,733,492 1,669,348
Other Income 174,546 223,582
Total Income 1,908,038 1,892,930
Total Assets 2018 Total Liabilities 2018
Wages and Salaries 629,423 586,913
Bad Debt Write Off 182,151 220,103
Other Operating Expenditure 657,724 682,137
Total Expenditure 1,469,298 1,489,153
Gross Surplus 438,740 403,777
Less Taxation (11,779) (12,702)
Less Dividend/Interest (169,404) (158,125)
Net Surplus to Reserves 257,557 232,950 Total Expenditure 2017
Balance Sheet as at 30th September 2018
£ £
2018 2017
Assets
Fixed Assets 18,951 21,161
Loans to Members 21,354,809 21,041,220
Other Current Assets 12,360,090 9,851,347
Total Assets 33,733,850 30,913,728
Liabilities Total Assets 2017 Total Liabilities 2017
Creditors 306,474 152,168
Members’ Shares 28,963,084 26,553,670
Accruals and Deferred Income 2,265 3,420
Total Liabilites 29,271,823 26,709,258
Net Assets 4,462,027 4,204,470
Reserves 4,462,027 4,204,470
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