Speaking about the political situation in the wake of the European elections, Marija Kolak, President of the Bundesverband der Deutschen Volksbanken und Raiffeisenbanken (BVR) [National Association of German Cooperative Banks], called on the European Parliament to support the difficult consensus reached regarding election of the next European Commission President on July 16: “The European Union (EU) must be able to maintain its ability to take action during this challenging period of global politics and at this crucial stage of the Brexit process.” If the Parliament approves the nomination, there will be a German politician at the helm of the European Commission for the first time in over 50 years. Despite the difficult selection process, this would be a great outcome for Germany and for Europe overall, believes Kolak.
“In which areas is it actually worth stepping up EU collaboration, and in which areas should the EU allow the principle of subsidiarity to flourish? These are urgent issues,” says Kolak. “The new Commission President needs to establish a position on this without delay.”
Kolak notes that the BVR supports the European Commission's sustainability strategy. But she adds that, in the quest for more sustainability, it is important to avoid putting the financial sector and real economy at a disadvantage in their efforts to compete with other regions such as the United States and China.
The annual consolidated financial statements of the Cooperative Financial Network, prepared in accordance with International Financial Reporting Standards (IFRS), provide information on the 2018 financial year of the 875 local cooperative banks, Sparda banks, PSD banks, and other cooperative specialized institutions as well as the DZ BANK Group. Net interest income fell slightly by €270 million to €18.4 billion. The Cooperative Financial Network was able to mitigate the mentioned reduction of this key earnings component due to volume growth in lending business. In addition, the increase of the net fee and commission income could also more than offset the decrease in the net interest income. Supported by the local cooperative banks, net fee and commission income climbed by 5 percent or €325 million to €6.8 billion. This growth was driven mainly by payments transaction fees but also by the brokerage business for real estate and by investment advice, two areas of investment that customers are increasingly turning to in the low-interest-rate environment. Loan loss allowances for loans and advances amounted to a net addition of just €151 million in 2018.
Administrative expenses rose by a moderate 1.1 percent to €18.1 billion. Income taxes amounted to €2.4 billion, which meant that the tax expense recognized was down by €0.5 billion. After taxes, the Cooperative Financial Network's net profit for 2018 came to €5.4 billion.
In its customer business, the Cooperative Financial Network again played to its strengths of focusing on values and on customers. Loans and advances to retail customers and to small and medium-sized corporate customers rose by 4.3 percent to €794.9 billion, while deposits increased by 5.2 percent to €842.4 billion. There was again brisk demand for personal home loans, while sight deposits remained customers' preferred choice in view of the low level of interest rates. The Cooperative Financial Network's consolidated total assets grew by 4.0 percent to €1.29 trillion.
For further information, see: www.bvr.de/KJA
Background information about the Volksbanken Raiffeisenbanken Cooperative Financial Network:
The local cooperative banks, Sparda banks, PSD banks, the cooperative church banks, and the specialized institutions hold virtually all of the capital of the Cooperative Financial Network – including that of the central institution, DZ BANK AG. They have more than 30 million customers, 18.6 million of whom are members of the local cooperative banks and thus their shareholders. The ownership structure of the cooperative banking group is therefore very broad and the group is entirely in private hands.
The central institution and specialized service providers within the Cooperative Financial Network, which include Bausparkasse Schwäbisch Hall AG, DZ HYP AG, Union Asset Management Holding AG, and R+V Versicherung AG as well as Münchener Hypothekenbank eG, VR Smart Finanz, TeamBank AG Nürnberg, and DZ PRIVATBANK S.A., provide the local cooperative banks with financial products and services, from which each cooperative bank compiles a package that is tailored to its positioning in the market and meets the needs of its customers. The BVR is the strategic competence center of the cooperative banking group. As an umbrella organization for the banking sector, it represents the interests of the cooperative banking group at both national and international levels.
The BVR also operates a dual system of bank protection. Its wholly owned subsidiary, BVR Institutssicherung GmbH, has been officially recognized as a deposit insurance scheme and, in addition to protecting banks, fulfills the statutory remit of ensuring depositors affected by a bank's insolvency are compensated in accordance with national deposit insurance legislation. The BVR protection scheme is an additional, voluntary system that also guarantees that deposits are safe by protecting the banks.