Anglo Irish Bank took in a large portion of the €11.9bn of deposits produced by the credit union movement as hundreds of the community-owned institutions flocked to the bank after the government took control of it in January.
Since Anglo's nationalisation on 21 January, the 508 credit unions affiliated with the Irish League of Credit Unions (ILCU) have been shifting "proportionally more funds into Anglo" to take advantage of attractive rates and the security of state ownership, according to ILCU chief executive Kieron Brennan.
Neither ILCU nor Anglo would reveal the exact size of deposit flows, but the figure is believed to be a significant portion of the credit unions' €11.9bn in members' funds. Anglo is being run by chairman Donal O'Connor.
The credit unions had already been acting on guidance from the Financial Regulator to keep funds in liquid form, such as cash deposits, and with institutions covered by the bank guarantee scheme. According to Brennan, the credit unions were spreading their money equally between the seven covered banks, but switched decisively to Anglo in January as the bank was seen as "state-secured".
On 13 January the Registrar of Credit Unions, Brendan Logue, issued a circular to credit unions to prioritise capital security and liquidity over return. He repeated his advice in a speech to the Credit Union Development Association, another credit union umbrella group, at the end of the month, after Anglo was nationalised.
Anglo reported €51.5bn in customer deposits in its 2008 annual report. It consistently offers some of the best rates for institutional depositors, according to data compiled by Dolmen Stockbrokers.