How Dividends Are Decided

At the end of each year we make up our accounts and they are audited by professional accountants as required by the Bank of England. The board then review the results and our financial position and decide what we can afford to pay out as a dividend. The Bank of England have some rules for how much we have to keep in reserve (fair enough, as they guarantee your savings up to £75,000!) which we obviously have to respect, and we also review whether the Credit Union is making a surplus or a loss.

This depends on how much we have out on loan, earning us interest and on whether all the people who we have lent money to pay us back correctly. Most years we make a surplus, and when we do we look to pay a dividend.