www.eacb.coop

The voice of 4,200 local and retail Banks – 78 million Members – 205 million Customers

European overview of the sector

Seminar “The People Business”

23 October, 2015

Overview

1. The EACB : overview of co-operative banks

2. The Co-operative Banking Difference

3. Some (important) facts and figures

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1. The EACB

THE VOICE OF CO-OPERATIVE BANKS IN EUROPE

Founded in 1970, the European Association of Co-operative Banks (EACB) is a leading

professional lobbying association in the European banking industry, based in Brussels. Today the

EACB represents, promotes and defends the common interests of its 31 member institutions and

of co-operative banks, with regard to banking as well as co-operative legislation.

OUR VALUES

4,200 local banks

68,000 outlets

205 million customers

OUR CONTRIBUTION

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78 million members

860,000 employees

20% market share

TRUST

GOVERNANCE

RESILIENCE

PROXIMITY

SOCIAL COMMITMENT

SOLIDARITY

EACB: 31 Members

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Associate Members

Belgium • Cera

Canada • Mouvement des Caisses Desjardins

Denmark • NYKREDIT

Japan • The Norinchukin Bank

Lithuania • Lithuanian Central Credit Union

Switzerland • Raiffeisen Schweiz

United Kingdom • Building Societies Association

Full Members

Austria • Fachverband der Raiffeisenbanken

• Österreichischer Genossenschaftsverband

Bulgaria • Central Co-operatist Bank Creditco-op

Cyprus • Co-operative Central Bank Ltd.

Finland • OP – Pohjola Group

France • Confédération Nationale du Crédit Mutuel

• Fédération Nationale du Crédit Agricole

• BPCE

Germany • Bundesverband der Deutschen Volksbanken und Raiffeisenbanken – BVR

• DZ Bank AG

Greece • Associations of Co-operative Bank of Greece

Hungary • National Federation of Savings Co-operatives

Italy • Associazione Nazionale fra le Banche Popolari

• Federazione Italiana delle Banche di Credito Co-operativo – Casse Rurali e

Artigiane

Luxemburg • Banque Raiffeisen Luxembourg

The Netherlands • Rabobank Nederland

Poland • Krajowy Zwiazek Bankow Spoldzielczynch – KZBS

Portugal • FENACAM - Federação Nacional das Caixas de Crédito Agricola Mútuo,

F.C.R.L.

Romania • Central Co-operative Bank

Slovenia • Deželna banka Slovenije d.d

Spain • Unión Nacional de Cooperativas de Crédito

• Banco de Crédito Cooperativo BCC

Sweeden • Landshypothek AB

United Kingdom • The Co-operative Bank p.l.c.

The Co-operative Banking Business Model

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Members own their banks at local and regional level

Governance is based on the principle ‘one person – one vote’

Fully compliant with the banking regulation and fully supervised by the banking

supervisor

Average size of a Cooperative Banking Group (differences)

o Germany : EUR 1.000 billions ( Geno Group ) 1.200 fully licensed banks

o France : EUR 1460 billions ( Credit Agricole) 39 fully licensed regional

banks; EUR 1000 billion ( BPCE) 36 fully licensed regional banks

o Nederland : EUR 674 billions ( Rabobank) , 129 local banks

o Italy: EUR 460 billions (Banche Popolari), 72 banks; EUR 206 billions

(BCCs), 385 banks

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2. The Co-operative Banking

Difference

Specific structure of co-operative banks

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Co-operative Banks: different organisations

• “inverse“ pyramid: local banks own regional/national central bank

• Regional/national central banks are service providers for the network/group

•

• Regional/national central institutions normally are responsible to ensure liquidity on group/network level

Member ownership is one of the distinguishing features of co-operative

banks and it is hard to replicate outside the co-operative model.

The Co-operative Difference

Co-operative banks are the main pillar of diversity in the European banking sector. Compared to

shareholder banks, which are primary focused on maximising shareholder interest, co-operative banks are

focused on maximising member value and are characterised for their specific nature, which could be

summarised with the following key points:

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Member ownership

Maximisation of members’

benefit/surplus in a long-term relationship

‘One person – One vote’

governance with a bottom-up approach

Resilience Strong

commitment to social values

Proximity to customers

(local presence, decisions

taken at local level,

financing)

What makes the co-operative bank model different?

The central role of members. They (i.e. the local entrepreneurs, craftsmen, farmers, households, etc.) are both owners and clients of the bank. Member ownership means a unique capital and governance structure where decisions are taken from the bottom up.

Resilience. Stable income from retail business, a high level of deposit funding and capitalisation.

Deep rooting in the regions and local territories across Europe, including in remote areas. Co-operative banks are often the main employer and financial partners of local households and businesses, financing one-third of SMEs in Europe. They reinvest profits in their community, with projects selected by local members.

What weight do they have in the European economy?

A key role in the European economy, with an average market share of 20% across the EU and ranging between 25% and 50% in countries such as Austria, France, Finland, Italy and the Netherlands. Co-operatives have 68,000 outlets and directly employ 860,000 people across Europe.

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2. Some (important) Figures &

Facts

Co-operative Banks during the Crisis

Source: EACB key statistics and EACB Think Tank Studies

Between 2008 and 2012, Co-operative banks have:

Increased their membership by 4.5%

Increased their client base by 5%

Increased their total assets by 13%

Increased their total loans by 25%

Increased their total deposits by 28%

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Increasing members and relationship

with the public

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Members and Member to Population Ratio

(1996-2013)

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Since 1997 the number of members

has increased continuously.

Member growth does not appear to

differ significantly between years of

strong economic growth and financial

stability and years of economic slack

and financial instability.

In 2012 and 2013, European co-

operative banks welcomed almost 3

million new members. The increase

signals trust and confidence of

customers in co-operative banks.

Source: TIAS School for Business and Society (TIAS) based on data from 14 co-operative banking groups and national demographic

statistics. TIAS publication, 2014

Total assets, loans and deposits

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2012 2013

COOP EBS COO

P EBS

Total assets EUR billion 7,021 22,263 6,825 20,075

%-change 0.9% -2.3% -

2.8% -9.8%

Loans EUR billion 3,522 7,760 3,516 7,440

%-change 1.3% -1.1% -

0.2% -4.1%

Retail deposits EUR billion 3,216 7,889 3,267 7,977

%-change 2.4% 1.4% 1.6% 1.1%

Balance Sheet Development

Source: Calculations by TIAS based on data from fourteen co-operative banks, the ECB and the Swiss National Bank. Note: COOP

and EBS stand for co-operative banking groups and the Entire Banking Sector in ten European countries respectively (Germany,

Austria, Italy, Spain, Portugal, The Netherlands, Switzerland, Denmark, France and Finland). EBS data do not comprise COOP

data. Loans refer to loans to the nonfinancial private sector. Retail deposits refer to all deposits and savings from the non-financial

private sector. Upon close inspection of balance sheet items, we have tried to use comparable definitions for ‘loans’ and ‘deposits’

of individual co-operative banks and entire banking systems. Since we have used the same definitions every year, data consistency

is guaranteed.

Co-operative Banks’ Performance

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Return on Equity

(2012-2014)

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Source: TIAS School for Business and Society (TIAS) based on data from 14 co-operative banking groups, the European Central Bank

and Swiss National Bank. TIAS publication, 2014

The return on equity is widely

used as a proxy for profitability.

ROE was negative in 2012 for the

entire banking sector, whereas

co-operative banking groups still

booked positive returns on their

equity.

European Association of Co-operative Banks

Rue de l’ Industrie 26 – 38

B – 1040 Brussels

Tel.: + 32 (0)2 230 11 24 , Fax: +32 (0)2 230 06 49

E – mail: Secretariat@eacb.coop

Website: www.eacb.coop

Thank you for your attention!

Elisa Bevilacqua, Head of Department, Communication & Research

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