In brief
In 2022, the Volksbanken Raiffeisenbanken Cooperative Financial Network reported consolidated profit before taxes of €3.9 billion in challenging conditions. The decrease compared with the exceptionally healthy profit before taxes of €10.5 billion in 2021 was predominantly due to temporary, interest-rate-related valuation effects. The impairment losses are likely to be reversed in subsequent years. Equity stood at €127.6 billion, reflecting the Cooperative Financial Network’s continued very good level of capitalization.
The annual consolidated financial statements of the Cooperative Financial Network provide information on the 2022 financial year of the local cooperative banks, Sparda banks, PSD banks, and other specialized institutions in the Cooperative Financial Network as well as the DZ BANK Group and Münchener Hypothekenbank. For the purposes of the consolidated reporting, the cooperative banks’ financial statements, which are based on the German Commercial Code (HGB), are reconciled to International Financial Reporting Standards (IFRS).
The banking business, in particular, with its approximately 30 million customers performed extremely well in the past financial year. The Cooperative Financial Network recorded year-on-year growth of around 6 percent in its lending business, virtually crossing the trillion euro threshold for the first time with a lending volume of €999.9 billion. In the deposit-taking business, the volume of deposits rose once again, advancing by approximately 5 percent to €1,033 billion. Consolidated total assets held relatively steady, increasing by just under 1 percent to €1,581 billion.
The first positive effects of higher interest rates and the further growth in the lending volume resulted in net interest income of €20.5 billion in 2022, a rise of 12.7 percent. At €8.6 billion, net fee and commission income remained stable at the high level achieved in the previous year. Expenses for loss allowances amounted to a net addition of €1.4 billion, whereas there had been a net reversal of €0.3 billion in 2021. The bulk of the loss allowances recognized in 2022 were based on model-related effects at stages 1 and 2 under IFRS 9. These constitute a reserve for future years and for the foreseeable risks. Gains and losses on investments came to a net loss of €6.8 billion, compared with a net loss of €0.2 billion in the previous year. This deterioration was largely due to temporary, interest-rate-related valuation effects that will result in reversals of impairment losses in the next few years.
Administrative expenses went up by 2.7 percent year on year to €19.1 billion as a result of wage increases, additional capital expenditure, and inflation-related rises in costs and energy prices. The cost/income ratio rose to 78.4 percent in 2022, mainly due to fair value gains and losses on securities (2021: 64.6 percent). The Cooperative Financial Network paid €2.8 billion in income taxes in 2022, thereby making a direct and important contribution to society through the funding of regional infrastructure. After taxes, the Cooperative Financial Network’s consolidated net profit amounted to just over €2.1 billion.