Co-operative Banking in the Netherlands

From its origins in the Raiffeisen-inspired agricultural credit co-operatives of the late nineteenth century, co-operative banking in the Netherlands grew throughout the twentieth and early twenty-first centuries and today occupies a substantial role in the banking sector. Its history has been characterized by an intense democratic dialogue that has been instrumental in developing an organizational model which continues to give voice to its members through bottom-up structures. The results obtained by the co-operative banking group are compared with those obtained by the two largest commercial joint-stock banks. Generally, the test results indicate that the two business models do show significant differences in their outcomes. The co-operative banking group exhibits a capitalization which is statistically significantly higher than that of non-co-operative banks. However, if we compare the two business models, taking into account their asset and liability allocative choices, we find that there are strong similarities. In terms of the exposure to credit risk and the economic performances achieved (net interest margin, ROAA, ROAE, and cost to income), we do not detect any significant difference between the two groups of banks.