Cooperative Banking: Is Added Value Created for the Customer?

Dominique GARABIOL Conseiller, Direction générale, banque commerciale et assurance, BPCE ; chargé d’enseignement, universités Paris 8 et Paris 13.

Initially created to secure the funding of specialized sectors or industries, cooperative banks have developed an added value distribution pattern between themselves and the associated members whereas keeping flexible capitalistic tools. Since the late 1950s, their customer basis has widespread dramatically and the French banking law of 1984, which set up the legal framework of universal banking, made them face two challenges: internal modernization to fit with the new competition on their historical markets and efficient strategic planning to break onto new business lines or new markets despite their new competitor disadvantages. They try to achieve these targets by using and harnessing capitalistic structures and mechanisms (shareholder incorporation, listing on financial markets…). Hence ambiguous targets of added value distribution and Group “heads” having to deal with conflicts of interests.