2012-10-09-奥纬咨询-The_Outlook_for_Co-operative_Banking_in_Europe_2012_43页_792kb

Summary of "The Outlook for Co-operative Banking in Europe 2012"

Core Content

This report provides an analysis of the role, performance, and future outlook for Co-operative Banks in Europe, particularly in the context of the 2012 UN 'Year of the Co-operative'. It follows up on the 2008 report "Co-operative Bank: Customer Champion" and examines the evolving challenges and opportunities for the sector in light of the financial crisis.

Main Points

1. Co-operative Banking Model Overview

• Ownership by Members: Co-operative Banks are owned by their members, who are also their customers. This contrasts with Shareholder Banks, which prioritize market capitalization over customer satisfaction.
• Shared Commitment to Co-operative Values: These values include Trust, Governance, Resilience, Proximity, Social Commitment, and Solidarity. They are central to the identity and operations of Co-operative Banks.
• Market Presence: Co-operative Banks account for approximately 20% of EU bank deposits and loans, making them a significant, if not dominant, feature in several European countries.

2. Performance and Lessons from the Crisis

• Resilience: Co-operative Banks have shown strong performance during and after the crisis, with relatively higher capital levels and sustained lending.
• Customer Centricity: Their focus on customers has helped maintain trust, especially in a time of widespread financial skepticism.
• Cost Efficiency: While historically less cost-efficient, Co-operative Banks have improved in this area, with cost/income and RoE levels converging with those of Shareholder Banks.

3. Challenges

• Governance Complexity: The multi-level, decentralized governance structures of Co-operative Banks can be complex and may not align well with regulatory frameworks designed for Shareholder Banks.
• Financial Resource Management: Managing liquidity and capital within a mutual guarantee system presents unique challenges, especially in response to crises.
• Regulatory Alignment: Regulatory changes are often tailored to standard Shareholder Bank models, creating a need for improved dialogue to reflect Co-operative specifics.
• Liquidity and Capital Management: Co-operative Banks face challenges in liquidity positioning and capital adequacy, particularly with increasing competition for deposits.

4. Resolvability and Supervision

• Resolvability: Co-operative Banks need to ensure they are resolvable without posing systemic risk or relying on taxpayer support. However, their governance structures may not align naturally with international resolvability tools.
• Supervision: The sector's diversity and complexity require tailored supervisory approaches.

Future Priorities

1. Reinforce Co-operative Values

• Communication: Effectively communicate Co-operative values to regulators, investors, and customers.
• Service and Product Focus: Ensure that products and services align with the needs of core customers, avoiding traditional sales targets.

2. Governance Reassessment

• Review and Tighten Standards: Strengthen governance across all levels of the Co-operative structure.
• Risk and Financial Governance: Align governance practices with regulatory trends while maintaining the unique strengths of the Co-operative model.
• Board Strengthening: Support and enhance the capabilities of Boards at the member bank level.

3. Operating Model Evolution

• Branch Networks: Rationalize branch networks while maintaining local presence and community engagement.
• Consolidation: Encourage consolidation of smaller entities within larger groups to manage costs and capital.
• Centralization of Shared Services: Continue centralizing non-customer-facing services while preserving local decision-making and proximity.

Key Information

• Co-operative Banks are a major part of the European financial sector, with a significant market share in deposits and loans.
• Their unique model of ownership and values contributes to system stability and customer trust.
• The sector faces challenges in governance, regulatory alignment, and financial resource management.
• The report highlights the importance of maintaining the Co-operative difference in a competitive environment.
• Future priorities include reinforcing values, reassessing governance, and evolving operating models to ensure long-term viability and relevance.

Conclusion

Co-operative Banks are well-positioned to navigate the ongoing transformation of the financial services sector, but they must adapt to new regulatory and market pressures. Their distinct model offers valuable lessons, particularly in customer focus and community engagement, which are critical in rebuilding trust and ensuring financial stability.