Structure, business model, and features of the IPS*

This management report supplements the consolidated financial statements of the Volksbanken Raiffeisenbanken Cooperative Financial Network (‘Cooperative Financial Network’).

The Volksbanken Raiffeisenbanken Cooperative Financial Network consists of 735 cooperative banks (2021: 771), the DZ BANK Group, Münchener Hypothekenbank eG, the BVR protection scheme, and BVR Institutssicherung GmbH as consolidated entities. The consolidated cooperative banks include Deutsche Apotheker- und Ärztebank eG, the Sparda banks, the PSD banks, and specialized institutions such as BAG Bankaktiengesellschaft.

The cooperative banks and Münchener Hypothekenbank eG constitute the legally independent, equally ranked parent entities of the Cooperative Financial Network in the consolidated financial statements, whereas the other banking groups and entities are consolidated as subsidiaries.

The Volksbanken Raiffeisenbanken Cooperative Financial Network’s institutional protection scheme (IPS) is set up as a dual cooperative scheme that comprises the BVR protection scheme and BVR Institutssicherung GmbH. The IPS forms the backbone of risk management in the Cooperative Financial Network. The institutions are linked – through the BVR protection scheme – by their mutual liability. The protection scheme is mainly focused on preventing individual institutions from getting into difficulties.

The principles and methods of the institutional protection scheme are outlined in more detail in the combined opportunity and risk report.

* Institutional protection scheme.

Definition of the main operating segments

The definitions of the operating segments referred to in the management report – ‘Retail Customers and SMEs’, ‘Central Institution and Major Corporate Customers’, ‘Real Estate Finance’, and ‘Insurance’ – can be found in the notes to the consolidated financial.