The EACB is pleased to announce the launch of a new publication entitled “European co-operative banks in 2019: a concise assessment” by Tilburg University. The research paper reviews developments in the overall performance of 18 co-operative banking groups in 13 European countries. The average performance is compared to that of the entire banking sector in same countries in 2019.
Professor Hans Groeneveld stated : ‘In the year of the global covid-19 pandemic, 1.2 million new members joined the European co-operative banking groups included in the research letter. These banks managed to strengthen their position in domestic retail banking due to higher growth rates of both loans and deposits compared to all other banks. Co-operative banks also significantly improved their Tier 1 ratio, which hit a record level in 2020. The figures demonstrate the divergent business focus of co-operative banks as well as their importance for the real economy in Europe.’
Highlights of the concise assessment:
- In 2020, the member base of co-operative banks under increased by 1.2 million to 87 million. This represents a net increase of 1.5 percent.
- The average domestic market shares of co-operative banks hit new records in 2020. The loan market share increased by 0.1 percentage point to 23.1, the highest level ever. The strengthening of the market position in domestic deposit markets was stronger and more pronounced at 0.3 percentage points to 22.2. The branch market share showed an unprecedented jump of 2 percentage points to 35.2.
- During several full or partial economic lockdowns in 2020, co-operative banks continued to supply the real economy with new loans. Their loan portfolio grew quite substantially by 4.6 per cent in 2020, following record growth in 2019. All other banks recorded an increase in their outstanding loan volume of 1.7 per cent. Co-operative banks' deposits increased by almost 10%, while other banks experienced deposit growth of about 8%. This is the highest rise in the last decade.
- The capital cushion of all banks was strengthened in the year of the COVID-19 pandemic. The average Tier 1 ratio of co-operative banks reached a record level of 16.6, while the Tier 1 ratio of all other banks peaked at 16.3.
The global corona outbreak put pressure on bank profitability in 2020. The average return on equity fell by 2.3 percentage points for both co-operative banks and the collective banking sector to respectively 4 per cent and 3.6 per cent.