The Bermuda Industrial Union's Credit Union has insisted that it is still a "going concern" despite putting lending to members on hold and falling behind in its financial reporting.

Graham Nesbitt, president of the Credit Union, issued a two-page statement to The Royal Gazette on Friday following a story which ran a week ago questioning why members were unable to get loans at the moment.

Mr. Nesbitt said the Credit Union had always operated on "thin margins and comparatively limited resources" and suspended lending when necessary.

He said members saved their money with the expectation that they would be able to obtain a loan for "provident or productive purposes", adding: "As savings ebb and flow and as loans are being repaid, new loans are being granted.

"It is as these peaks and troughs are experienced the levers by management are being adjusted to facilitate members' needs as best as possible.

"The reality is that each year at certain intervals the Credit Union puts a hold on lending, therefore suspension of lending is nothing new."

Mr. Nesbitt revealed that the Credit Union — a separate entity from the union — has $10 million in assets, a loan portfolio of $8.4 million and a 4,000-strong membership.

It is required by law to deliver audited statements to Bermuda Monetary Authority (BMA) no later than three months after the end of each financial year and to exhibit its audited statements and annual report "in a conspicuous place in every office at which it conducts its business".

Mr. Nesbitt admitted that the Credit Union — which he described as the only "indigenous financial institution in this country, born out of the sweat and labour of Bermudians and foreigners" — had not yet filed its 2006 financial reports but said they were being finalised by auditors and the 2007 audit was "well under way".

He said the most recent unaudited report for January 2008 was posted in the Co-operating Hall at the Credit Union and that any member wishing to examine its financial position could visit the office and request the information.

Mr. Nesbitt's statement also referred to an illegal loan of almost $3 million made by the Credit Union to Union Assets Holdings — a subsidiary of the BIU set up to provide a surety to contractors Pro-Active on the controversial Berkeley Institute building.

As reported by this newspaper last week, the Credit Union's 2004 financial statement states that the loan was repaid in full. Mr. Nesbitt said the Credit Union had in the past shown "exuberance" in assisting its main sponsor (the BIU) to attract more members from the construction sector and admitted this "may have been a faux pas".

He added that members' savings were never endangered during and after the loan period. "This was an act which (the Credit Union) quickly reversed as the public records show. But who in business always makes perfect decisions? Vision is always 20/20 in hindsight."

Mr. Nesbitt said the Credit Union gave the BMA weekly updates on its operations and that its board of governors and management held ad hoc meetings several times a week "in the furtherance of accountability".

He said the statement was issued to "counteract any negative image that recent publications on the organisation might have had". The Royal Gazette did attempt to get a response from the Credit Union before running last Monday's story but was unsuccessful.