As a credit union, we don't have a single owner or shareholders. Instead, we are owned by members like you.
This means that when the credit union does well and makes a profit (also called a surplus), the credit union may collectively decide to pay all or some of that profit back to its members as a 'thank you' for saving with the credit union.
This is called a dividend.
Who Decides How Much to Pay?
The amount of dividend paid to each member is usually based on a percentage of the amount they have saved with us in their Membership Account over the course of the year.
The decision of whether or not to pay a dividend is taken at our Annual General Meeting (AGM) each year. At the AGM, our Board of Directors will make a proposal to the meeting on the level of dividend to pay. This is usually based on the credit union's financial performance over the past year. Members then have the opportunity to vote on whether to accept the Board of Directors' proposal.
Current Dividend Rates
London Mutual Credit Union has not paid a dividend to its members for the past five years. This is due to the credit union having only recently returned to profit after making major investments in our online banking and core IT systems. It also more recently, reflects the impact of COVID-19 on the business.
The Credit Union's current business plan is focused on building our reserves to levels that will guarantee the long-term financial sustainability of the credit union. The Board of Directors has indicated that it will not recommend paying a dividend until these targets have been met.
When Will You Resume Paying Dividends?
We expect to be in a position to resume paying a dividend in the financial year 2023-24. The decision on whether this is possible, and the amount of dividend to pay, will be taken at the AGM, based on a proposal by the Board. However, historically, dividends have been between 1-3% of members' savings.