The Competitive Threats and Strategic Challenges to Polish Cooperative Banks: A Post Crisis Perspective
The aim of this chapter is to analyze the long-term impact of 2007–2009 global financial crisis on the Polish banking sector, with a particular focus on the competitive position and prospects of cooperative banks. It focuses on the consequences of the cri
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Introduction
The aim of this chapter is to analyze the long-term impact of the 2007–2009 global financial crisis on the Polish banking sector, concentrating in particular on analyzing the competitive position and challenges faced by the cooperative banks. One of the lessons from the 2008 crisis was the importance of the banking sector in providing credit to consumers and firms (Allen et al. 2011), and cooperative banks have proved to be efficient in this respect, not only fighting social and economic exclusion, but also smoothly providing access to finance to such sensitive segments as low income customers and small to medium-sized enterprises (SMEs), contributing to the financial m arket’s efficiency K. Kil • E. Miklaszewska (*) Faculty of Finance, Cracow University of Economics, Rakowicka 27, 31-510 Kraków, Poland e-mail: [email protected] © The Author(s) 2017 E. Miklaszewska (ed.), Institutional Diversity in Banking: Small Country, Small Bank Perspectives, Palgrave Macmillan Studies in Banking and Financial Institutions, DOI 10.1007/978-3-319-42073-8_6
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and growth (Ferri et al. 2014). In the post-crisis period, their important role in access to credit has been highlighted, but also new challenges have emerged. On the one hand, during the crisis small banks with a relationship approach and long-term direct relationships with households and local firms, mostly SMEs, better solved the problem of access to finance and risk management. Large banks, on the other hand, which enjoy a strong advantage in technology, have a better record of lending to bigger firms and in good times (Beck et al. 2009, 2014), so in many countries the relative advantage of cooperative banks turned out to be of a short-term nature. Consequently, the aim of this chapter is to analyze whether the Polish cooperative banking sector follows this global trend. Analyzing cooperative bank performance, profitability and stability indicators are employed, but also a new analytical tool analyzing risk-adjusted bank performance has been used: the Multi Level Performance (MLP) score (Miklaszewska and Kil 2015). The Score is calculated in points, based on relative values assessed within a group, of five ratios: ROE (Return on Equity); C/I (Cost to Income); L/A (Loans to Assets); Z-score and NPLs ( Non Performing Loans). The empirical analysis in this respect is based on an adjusted data set on individual banks received from one of the two cooperative associations: BPS SA and uses data from the Polish supervisory institution KNF and the Bankscope database. Discussing strategic challenges, the results of cooperative bank surveys, conducted by the authors in 2013 and 2016, are analyzed, focusing on a new competitive framework, new restrictive regulations and new competitive threats, coming, among others, from other locally based credit institutions—credit unions (SKOKs). The chapter is organized as follows. Section 2 provides an overview of the competitive forces operating within the Polish banking sector; Sect.
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