Kolak explained that the general economic conditions, businesses’ propensity to invest, and consumer confidence have all weakened further. Many businesses were feeling the impact of fluctuating prices for energy and commodities, an increasing shortage of skilled workers, and risks stemming from trade-policy decisions. “This makes it all the more important that domestic economic policy is focused, promptly implemented, and provides a reliable basis for planning,” she said. The coalition government’s latest moves in relation to boosting economic growth and the job market, and its clear commitment to the proposals of the pension committee are sending an important message. It now needs to forge ahead with delivering. Kolak also appealed for more ambitious reform of income tax. “The announced tax relief won’t even make up for the bracket creep for many people. The increase in the top rate of tax will place an additional burden on high-performing SMEs – i.e. those most needed to make investments.”
Following years of inaction, Kolak is seeing signs of progress where financial literacy and pension planning are concerned. The planned Frühstart-Rente [a state-subsidized retirement savings program for children] and the retirement savings account are important steps towards strengthening the third pillar of the pension system. However, the draft bill for the Frühstart-Rente and the Pension Reform Act for the retirement savings account fail to give providers the legal certainty that they need. “Our banks are on the starting blocks,” said Kolak. In addition to pension and investment products, the Volksbanken Raiffeisenbanken Cooperative Financial Network is also supporting a broad-based educational offering. This includes teaching materials and a service portal for schools, a kids’ podcast entitled ‘Everything about money’, social media posts aimed at young people, and an in-house financial education app that is currently being developed with Neonblau, the group’s own NextGen consultancy.
Besides dependable policymaking and stronger private pension provision, the BVR believes the power of technological innovation is a decisive factor in the ability of Europe to compete as a market and for Germany to compete as a financial hub. With its Tech Sovereignty Package, the European Commission presented a comprehensive package of measures to reduce Europe’s reliance on external capabilities for cloud computing, artificial intelligence, and semiconductors and to boost home-grown technological alternatives. Now that the political groundwork has been laid, it is essential that actual investment and competitive solutions are given space to take root. Digital sovereignty should not mean isolation but rather the ability to actively shape technological progress and to make it useful for customers. The Cooperative Financial Network is embracing the deployment of AI across the entire value chain – from the automation of its processes through the intelligent use of data to new advisory and service applications. At the same time, it is actively contributing its experience as an operator of critical financial infrastructure to the political debate surrounding cloud technologies, data sovereignty, and the regulation of AI.
With its Geno Next Level project of reforms, BVR has successfully strengthened the BVR protection scheme and enhanced its right to take action in relation to banks that have been assigned a prevention or recovery status. The general meeting of BVR members in June adopted the necessary amendments to its statutes with a very large majority. “This is a milestone for the future of our deposit protection scheme and testimony to our group’s ability to take action”, concluded Kolak, following a process of reform on the part of primary banks, regional banking associations, and specialized service providers in the Cooperative Financial Network over a period of one and half years.
In the months ahead, the Supervisory Boards and Boards of Managing Directors of all cooperative banks will also discuss the code proposed by the BVR for Boards of Managing Directors and Supervisory Boards. This code is intended to promote a common understanding of responsible corporate governance. Enhancing the groupwide system of risk and financial management was also an integral element of Geno Next Level. The BVR is currently adding further detail to the guardrails that were established in the course of the project.
Successful customer business
Net interest income – cooperative banks’ largest source of income – rose slightly in 2025 to €24.5 billion, reaffirming the high level achieved in the previous year 2024: €24.3 billion).
Net fee and commission income increased more strongly, rising to €9.9 billion (2024: €9.5 billion). Payments processing and the securities business continued to be the main sources of income.
Gains and losses on trading activities improved noticeably, advancing from a net loss of €643 million to a net gain of €384 million). One of the main reasons for this turnaround was the absence of market-related valuation effects on own issues in the current year. Gains and losses on investments, meanwhile, deteriorated from €930 million to €142 million, thereby returning to a normal level. There were some reversals of impairment losses but these were significantly lower than in the previous year.
The insurance business was of particular note in 2025. Encouraging growth in customer business, accompanied by a lower level of claims, resulted in significant growth in profit, which was up by 56 percent to around €2.5 billion.
The Cooperative Financial Network retained its loss allowances at a high level of €4.3 billion in 2025 (2024: €4.5 billion). This reflects the continuing rise in insolvencies among businesses and consumers due to the weak economic climate. It is also evidence of careful planning on the part of the banks’ finance and risk managers.
The income generated offset the rising administrative expenses, which advanced from €20.8 billion in 2024 to €22.2 billion in 2025. The increase was chiefly due to higher staff expenses as a result of collectively agreed pay rises and new hires. The number of employees in the Cooperative Financial Network rose by around 3,000 in 2025 to approximately 176,500, representing a continuation of the strategic increase in headcount for the third year in a row. IT expenses also rose, with the Cooperative Financial Network making targeted investments in its employees and in the ongoing digital enhancement of its banks.
There was moderate growth in the cost/income ratio as a result, which went up by 1.5 percentage points to 58.3 percent and thus remains at a good level. Factoring in income taxes of €4.2 billion, net profit after taxes amounted to €7.4 billion in 2025.
The growth in customer business is also reflected in the balance sheet, with loans and advances to customers rising by 2.9 percent and customer deposits by 2.7 percent. The Cooperative Financial Network’s consolidated total assets thus rose to €1.68 trillion, which was 2.3 percent higher than in the previous year.
The Cooperative Financial Network strengthened its equity position considerably in 2025. The cooperative banks continue to account for 83 percent of equity. Equity rose by almost 5.3 percent to €158.5 billion. The total capital ratio increased by 0.3 percentage points to 17.2 percent. Thanks to this very sound capital adequacy, the Cooperative Financial Network is well equipped for the future – both in terms of risks and expected funding needs. This is confirmed by the rating agencies: Both Fitch and Standard & Poor’s rate the Volksbanken Raiffeisenbanken Cooperative Financial Network very highly relative to the rest of the sector and have awarded ratings of AA- and A+ respectively with a stable outlook.
Background information about the Volksbanken Raiffeisenbanken Cooperative Financial Network:
The 646 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, 17.5 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, 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 institutional protection. Its wholly owned subsidiary, BVR Institutssicherung GmbH, has been officially recognized as a deposit insurance scheme and, in addition to protecting institutions, fulfills the statutory remit of ensuring depositors affected by an institution’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 institutions.