The EACB is pleased to announce the launch of a new publication entitled “European co-operative banks in 2018: a concise assessment” by Tilburg University. The publication 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.
Tias Report’s highlights:
- In 2018, the number of memberships at co-operative banking groups grew by 3.3 per cent to about 84 million. This growth rate exceeded the long term average increase of around 2 per cent per year. The member-population ratio surpassed 20 for the first time. On average, one out of five inhabitants is a member of a co-operative bank in Europe. Hence, they are important institutions in modern society.
- As far as could be ascertained, the average domestic market shares of co-operative banks reached their highest levels ever. The same holds for their average Tier 1 ratio (15.9).
- The return on equity of co-operative banks stabilised at 6.7, despite an extremely low interest rate environment. Since co-operative banks are noticeably primarily oriented towards retail banking, and hence dependent on interest income, it is quite an achievement that they managed to keep their average ROE at this level. Indeed, net interest income as a percentage of total assets has dropped from 1.5 in 2011 to 1.2 in 2018.
- Due to a slight fall in operational revenues and a modest increase in operational expenses, the cost-to-income ratios of co-operative banks and all other banks rose by 1.5 percentage points. It appears that co-operative banks have always operated with a somewhat higher CI-ratio than the average CI-ratio of all other banks.
- As in many preceding years, co-operative banks provided more new loans to the real economy, reported a higher deposit growth, and reduced their branch network and employment to a lesser extent than all other banks. Co-operative banks expanded their loan portfolio by 4.7 per cent; the highest increase since 2011.