“Our network has notched up one of its best profits ever,” said Marija Kolak, President of the Bundesverband der Deutschen Volksbanken und Raiffeisenbanken (BVR) [National Association of German Cooperative Banks], when the annual financial statements were presented. The results underline the trust shown by more than 30 million customers and around 18 million members. “We are not resting on our laurels, however,” emphasized Kolak. “This profit puts us in a position of strength for tackling the key topics for the future on behalf of our network.” She added that the network was investing strategically in innovation and digitalization, including digital codetermination, AI-optimized processes, and the introduction of a cryptotrading product offering. “We are shaping the banking of the future, modernizing our membership, and creating products and services that will make the cooperative principle appealing to younger target groups too.”
Another strategic key topics for the future mentioned by Kolak was demographic change. “Some regions are growing, while others are battling with sharp declines and an ageing population. The Cooperative Financial Network plays an active role in regional life. We therefore believe that we too have a responsibility to ensure that communities continue to thrive, remaining economically strong and attractive.” To this end, the network has teamed up with the Institut der deutschen Wirtschaft (IW) [German Economic Institute] in Cologne to develop forecasts and scenarios that drill right down to district level.
In addition, the BVR President provided comprehensive insights into the far-reaching reforms taking place within the Cooperative Financial Network, referred to as Geno Next Level. These reforms are predominantly aimed at enabling the network to detect and avoid risks at banks earlier. Kolak explained that the refinement of cooperative institutional protection was now in full swing.
In view of the economic policy situation, Kolak stressed the importance of dependable and investment-friendly structures. She said that Germany’s new government was sending a clear pro-business message and had pledged its commitment to institutional protection and the three-pillar model. It is now crucial, believes Kolak, that the announced plan to reduce bureaucracy – such as reforming the mechanism for amending general terms and conditions – is implemented in a swift and workable manner.
2024 dominated by strong customer business
Net interest income held steady at €24.3 billion in 2024 and thus maintained the high prior-year level (2023: €24.1 billion). The lending business played a key part in this, expanding by around 2.6 percent. Net fee and commission income surged by 7.4 percent to €9.5 billion, with payments processing (including card processing) and securities brokerage business remaining the main sources of income in 2024. The Cooperative Financial Network recorded a marked deterioration of €0.7 billion in its gains and losses on trading activities. This was partly due to the effects of own issues and derivatives. Gains and losses on investments amounted to a net gain of €1.1 billion (2023: €1.3 billion), again thanks to positive valuation effects.
Administrative expenses came to €20.8 billion in the year under review, which was a little higher than the prior-year figure of €20.4 billion. This line item was affected by the increase in employees by 1,800 to around 173,500 and by collectively agreed pay rises. There was moderate growth in the cost/income ratio, which went up by 1.4 percentage points to 57.1 percent and thus remains at a good level. Factoring in income taxes of €3.2 billion, net profit after taxes amounted to €7.5 billion in 2024.
The main line items on the balance sheet grew at virtually the same rate as each other in 2024. The aforementioned 2.6 percent increase in the lending business and the 2.9 percent rise in customer deposits meant that consolidated total assets went up by 2.5 percent, reaching €1.64 trillion.
The Cooperative Financial Network again strengthened its equity position in 2024. Equity rose by almost 5 percent to €150.3 billion. The Tier 1 capital ratio and the total capital ratio each advanced by 0.7 percentage points to stand at 16.3 percent and 16.9 percent respectively. Thanks to this very sound capital adequacy, the Cooperative Financial Network is well equipped to cope with 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 672 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, 17.8 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.