COK closes its Central Plaza branch

Sabrina Gordon, Business Reporter

A decline in business has led to the closure of a branch of COK Sodality Co-operative Credit Union in St Andrew.

In a notice to members, the Credit Union said it has temporarily closed its Central Plaza, St Andrew, branch and merged that operation into its Half-Way Tree operation.

The closure, however, will not affect the 10 staff members as they have been assigned to other branches of the Credit Union.

"The carrying cost is heavy," said Jacqueline Mighty, chief executive officer of COK Sodality.

Mighty said operating expenses by itself amounted to between $18 million and $19 million annually, and the business was not able to cover those costs.

Consequently, Mighty said, the branch would be closed for the rest of the year as they evaluate the situation.

Slight reduction

"For this year we are amalgamating the operation because we are seeing a slight reduction in business," she said.

"But we are still evaluating the business signal and possibility of going back to that location," Mighty told the Financial Gleaner.

According to Mighty, the Central Plaza branch has on record some 5,000 members, but over the past year only about 2,000 persons have actively used it.

"The projections were not realised for that location so under the circumstances we have to merge," said Mighty.

The Half-Way Tree branch, which is housed in two units in the newly established Winchester Business Centre, has bigger space that was able to accommodate more tellers and also has parking space.

While they were not experiencing robust growth, Mighty said, the other branches continue to hold their own.

"Business continues to grow although not at the pace as in previous years," said said.

"We have seen a decline in growth rate and there are also challenges with delinquencies," she added.

At the end of the financial year December 2009, COK Sodality reported gross loans of $4.4 billion, a decline of four per cent over the previous year.

For the year, operational surplus of $129.2 million was eroded by provision for delinquent loans and bad debt written off, resulting in a loss of of $37.7 million.

However, the credit union recorded a five per cent growth in its asset base to $$7.69 billion.

Its savings portfolio also increased by seven per cent, moving to $6.44 billion, and its investments increased by 20 per cent to $2.25 billion

Membership base at the end of December 2009 stood at 234,000.

sabrina.gordon@gleanerjm.com