Looking to Greece, Fröhlich called for lessons to be learned for the future of the eurozone. "The current approach, which ultimately involves relying on the goodwill of the national governments, has not been successful," said Fröhlich. More consistent, more binding economic policy for the countries of the eurozone cannot be achieved unless they relinquish more of their national sovereignty as far as economic decisions are concerned.
Fröhlich explained that the Cooperative Financial Network was strongly opposed to the call for joint liability for the deposit guarantee schemes in the eurozone that had been made in a European policy paper written by the five presidents of the European Commission, European Central Bank, European Parliament, European Council, and the Eurogroup. "Any mutualization of deposit protection would cause lasting damage to confidence in the existing deposit guarantee schemes among many member states' citizens. Rather than being progress for the eurozone, it would represent a clear step for Germany toward transfer union."
Net interest income was on a par with the previous year at €20.0 billion, held steady by the encouraging increase in the volume of customer business. Allowances for losses on loans and allowances decreased by 61.4 percent to just €0.3 billion in 2014. The Cooperative Financial Network saw its net fee and commission income climb by 8.0 percent to €5.5 billion year on year. This increase was primarily due to brisk demand from customers for securities and funds.
Gains on trading activities amounted to €0.8 billion, compared with €0.5 billion in 2013. As in previous years, gains in business with corporate and institutional customers were mainly accounted for by investment and risk management products. The level of gains and losses on investments had amounted to a loss of €0.5 billion in 2013 (because this figure had included losses on disposals and impairment losses in connection with securities), whereas there was a gain of €0.1 billion in 2014. This was primarily the result of selling securities that had been impaired in previous periods. Other gains and losses on valuation of financial instruments declined from a gain of €1.1 billion in 2013 to a gain of €0.4 billion in the reporting year. This reduction was attributable to a fall in positive effects from the remeasurement of bonds of eurozone peripheral countries. Net income from insurance business improved to €1.3 billion in 2014. This change was predominantly the result of a rise in premium income and a significantly higher gain under gains and losses on investments held by insurance companies, although some of the gains were offset by higher insurance benefit payments.
Growth in regulatory requirements was one of the reasons for the small increase in administrative expenses, which went up by 2.5 percent to €16.9 billion in 2014. The number of people employed in the Cooperative Financial Network was 190,544, slightly below the number as at December 31, 2013 of 191,243. At 8.0 percent in 2014, the ratio of trainees to other employees remained at a high level compared with the rest of the sector.
Of the total income taxes of €2.8 billion for 2014, current income taxes accounted for €2.5 billion. The Cooperative Financial Network's cost/income ratio improved from 61.5 percent in 2013 to 60.7 percent in 2014.
Last year, the Cooperative Financial Network's consolidated total assets grew by 5.1 percent to €1,136 billion. All members of the Cooperative Financial Network – the primary banks, the DZ BANK Group, the WGZ BANK Group, and Münchener Hypothekenbank – contributed to this growth in almost equal measure.
On the assets side of the balance sheet, customer loans increased by 3.4 percent to €671 billion. Lending to corporate customers (loans to non-financial companies and self-employed people) by the local cooperative banks advanced by 3.7 percent, even though the market as a whole contracted by 0.8 percent. Loans to retail customers were up by 3.9 percent, the main factor in this rise being consumer home finance. On the equity and liabilities side of the balance sheet, customer deposits continued to grow despite fierce competition, advancing from €693 billion in 2013 to €713 billion in 2014.
The Cooperative Financial Network's capital base remains robust: Equity climbed by 9.0 percent to €86.5 billion in 2014, largely because of the increase in reserves achieved by retaining profits.