The European Association of Cooperative Banks (EACB) has published its latest statistics on the sector, showing continued growth and “sound business results” for the sector.
In addition to the statistics, compiled from member data, the EACB unveiled research paper by Prof Hans Groeneveld from Tilburg University, European cooperative banks in 2021: a concise assessment, which reviews developments in the overall performance of 18 co-op banking groups in 13 countries.
It found that co-operative bank membership grew by 1.4% to 88 million in 2021. Co-operative banks also managed to stabilise their domestic market share but witnessed a slight decrees of 0.2 percentage points to 34.7 in their branch market share, a change the study attributes to a relatively larger downsizing of their branch networks in 2021.
Meanwhile, the average Tier 1 ratio reached a new all-time high of 17.3 and the cost-to-income ratio improved by 2 percentage points to 62.
The study also compared the average performance to that of the entire banking sector in same countries in 2021 and estimates the likely implications of the 2022 data. It found that the average return on equity of co-operative banks and all other banks rose to the highest levels in years (6.8% and 6.5%, respectively). The paper described the disparity in lending and deposit growth between co-op banks and the collective banking sector as a structural phenomenon.
In terms of loans, growth accelerated to 6.7% for co-operative banks – the sector’s largest expansion since 2011. The whole banking sector increased its loan portfolio by only 4.1%.
Co-operative banks also witnessed a 7% increase in their deposit base – this was just 5.9% for other banks.
“Co-operative banks posted sound business results in 2021. For the countries included in the study, the membership base continued to grow, welcoming more than 1 million new members” said Groeneveld.
“Co-operative banks strengthened their market position in the domestic retail banking sphere as a result of higher growth rates of both loans and deposits in comparison to all other banks. They accommodated strong credit demand by expanding their loan portfolio by 6.7%.
“This marks the highest credit growth since 2011. Cooperative banks also significantly improved their Tier 1 ratio, which hit a record level in 2021. The figures demonstrate the divergent business focus of co-operative banks as well as their importance for the real economy in Europe.”
EACB CEO Nina Schindler thanked the organisation’s members for contributing with their data to the statistics table.
“This shall not only serve as a useful tool for researchers and academics, but offer policymakers a quantitative insight into the co-operative banking sector,” she added. “This publication certainly manifests that co-operatives banks are decisive players in the European economy.”
