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Co-operative banking sector continues to grow

February 06, 2023

Co-operative banking sector continues to grow
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%.

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