The banking system of the Credit Cooperatives in Italy finds its origins in the last quarter of 1800. Since their inception these credit cooperative institutions have been closely linked to the local communities in which they were established. The earliest forms of credit cooperative in Italy were represented by the rural population and artisans, who, inspired by Christian values, played a key role in stimulating humble groups of rural people, especially farmers and craftsmen, to obtain loans on terms more favourable than those applied to traditional banks. Since then, Rural and Artisan banks have maintained a very close relationship with the local territory, weaving their own story with that of the communities. The rural banks were also called upon to fulfil a social function, as well as financial income. In other words, the aim was not to maximize profits, but rather to support the local economy. Their role was, in fact, to carry out lending activities against people belonging to certain occupational groups such as farmers and artisans, members themselves of the cooperative bank, within a given territory in order to promote social and economic development of the community. In 1993, the Banking Act laid down a radical change as the name changed from “Rural and Artisan banks” to the current “mutual banks”. This research fits into this framework as it concentrates on Italian credit cooperative banks (BCCs). We considered a sample of 264 Italian BCCs banks, which represented more than 72% of all Italian BCCs in 2015. In addition, the research focuses on the period between 2009 and 2014. This theoretical analysis concentrates on the real relationship between the items considered to strengthen the role of these banks for the growth and value- creation of the local territory. Therefore, to do that we tried to find a relation between net assets and net banking income and profit/ loss of the banks of the sample.The general approach is balance- sheet and income statement based, as this preliminary analysis starts from the data extracted from the Bankscope database and consequently from the financial statements of banks. However, despite the limits of the research, thanks to this analysis and the results obtained, we may consider the opportunities for growth and development of this analysis.
Profitability of the Italian credit cooperative banks
Giovanni Ossola;Guido Giovando;Chiara Crovini
2018-01-01
Abstract
The banking system of the Credit Cooperatives in Italy finds its origins in the last quarter of 1800. Since their inception these credit cooperative institutions have been closely linked to the local communities in which they were established. The earliest forms of credit cooperative in Italy were represented by the rural population and artisans, who, inspired by Christian values, played a key role in stimulating humble groups of rural people, especially farmers and craftsmen, to obtain loans on terms more favourable than those applied to traditional banks. Since then, Rural and Artisan banks have maintained a very close relationship with the local territory, weaving their own story with that of the communities. The rural banks were also called upon to fulfil a social function, as well as financial income. In other words, the aim was not to maximize profits, but rather to support the local economy. Their role was, in fact, to carry out lending activities against people belonging to certain occupational groups such as farmers and artisans, members themselves of the cooperative bank, within a given territory in order to promote social and economic development of the community. In 1993, the Banking Act laid down a radical change as the name changed from “Rural and Artisan banks” to the current “mutual banks”. This research fits into this framework as it concentrates on Italian credit cooperative banks (BCCs). We considered a sample of 264 Italian BCCs banks, which represented more than 72% of all Italian BCCs in 2015. In addition, the research focuses on the period between 2009 and 2014. This theoretical analysis concentrates on the real relationship between the items considered to strengthen the role of these banks for the growth and value- creation of the local territory. Therefore, to do that we tried to find a relation between net assets and net banking income and profit/ loss of the banks of the sample.The general approach is balance- sheet and income statement based, as this preliminary analysis starts from the data extracted from the Bankscope database and consequently from the financial statements of banks. However, despite the limits of the research, thanks to this analysis and the results obtained, we may consider the opportunities for growth and development of this analysis.
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