A new paper from Tilburg University shows that European co-operative banks strengthened their position in domestic retail banking, with higher growth rates of loans and deposits compared to all other banks.
Published in December 2021, the study explores the overall performance of 18 co-operative banking groups in 13 European countries.
It finds that the member base of co-operative banks increased by 1.2 million (1.5%) in 2020 to 87 million. The average domestic market share of co-operative banks also increased by 0.1 percentage points to 23.1%, the highest level ever, it adds.
In terms of loans, co-operative banks increased their loan portfolio by 4.6% in 2020, compared to only 1.7% witnessed by other banks. The deposits of co-operative banks also increased by 10% while other banks experienced only an 8% growth during the same period.
Co-operative banks also reached a record level of Tier 1 capital ratios of 16.6, while the Tier 1 ratio of all other banks was at 16.3 for the same period.
Meanwhile the average return on equity fell by 2.3 percentage points for both co-operative banks and the banking sector in general to 4% and 3.6% respectively.
Prof Hans Groeneveld told the European Association of Co-operative Banks: “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.”
The full report is available on the European Association of Co-operative Banks’ website.