The German Cooperative Financial Group (German: Genossenschaftliche FinanzGruppe Volksbanken Raiffeisenbanken, sometimes referred to in English as "Volksbanken Raiffeisenbanken Cooperative Financial Network") is a major cooperative banking network in Germany that includes local banks named Volksbanken ("people's banks") and Raiffeisenbanken ("Raiffeisen banks"), the latter in tribute to 19th-century cooperative movement pioneer Friedrich Wilhelm Raiffeisen. The Cooperative Group represents one of the three "pillars" of Germany's banking sector, the other two being, respectively, the Sparkassen-Finanzgruppe of public banks, and the commercial banking sector represented by the Association of German Banks.
Hermann Schulze-Delitzsch (1808-1883)Friedrich Wilhelm Raiffeisen (1818-1888)Wilhelm Haas (1839-1913)
In 1843, the first German cooperative bank was created by 50 inhabitants of Öhringen in the Kingdom of Württemberg, who named it the Öhringer Privatspar- und Leihkasse (“private savings and lending bank of Öhringen”) – it still exists as the Volksbank Hohenlohe[de].
In the later 1840s, economist Franz Hermann Schulze-Delitzsch started organizing the creation of cooperatives by local communities of craftsmen or farmers in his home town of Delitzsch, in the Prussian Province of Saxony, and promoted national legislation to encourage it. The first such venture, a Rohstoffassoziation or raw materials purchasing association, was created by a group of shoemakers in 1849.[3] The next year in 1850, Schulze-Delitzsch created another association for advance payments to craftsmen in Delitzsch.
In 1859, Schulze-Delitzsch convened the first group meeting of cooperatives or Genossenschaftstag in Weimar and founded a central bureau of cooperative societies (German: Centralkorrespondenzbureau, which he ran from 1861, which in 1864 became the general association of German commercial and economic cooperatives based on self-help (German: Allgemeiner Verband der auf Selbsthilfe beruhenden Deutschen Erwerbs- und Wirtschaftsgenossenschaften. Also in 1864, Schulze-Delitzsch led the creation of the bank Soergel, Parrisius & Co. in Berlin, also known as Soergelbank, to serve as central financial institution for the Allgemeiner Verband.[4]
Meanwhile in 1864, Friedrich Wilhelm Raiffeisen fostered the creation of the first rural cooperative bank, the Heddesdorfer Darlehnskassen-Verein (“lending association of Heddesdorf”), in the village of Heddesdorf[de] near Neuwied, in Rhenish Prussia between Koblenz and Cologne. Raiffeisen considered joining Schulze-Delitzsch’s Volksbanken initiative, but eventually concluded that the needs of rural communities were different from the ones of town craftsmen which were Schulze-Delitzsch’s focus. In 1876, Raiffeisen created a financial institution in Neuwied to serve the network, which in 1926 was renamed Deutsche Raiffeisenbank AG. In 1877, he created the Bar Association of Rural Cooperatives German: Anwaltschaftsverbandes ländlicher Genossenschaften (Neuwied), the first national body for his rural cooperative movement. In 1910, that association’s headquarters was relocated from Neuwied to Berlin, and in 1917 it was renamed the General Association of German Raiffeisen Cooperatives (German: Generalverband der deutschen Raiffeisengenossenschaften).[4]
In 1872, another social reformer, Wilhelm Haas[de], created an agricultural purchasers’ association German: landwirtschaftlichen Konsumverein in Friedberg, Grand Duchy of Hesse. A few months later, 15 other rural purchasing cooperatives joined it to form the Association of Hessian Agricultural Purchasing Associations (German: Verband der hessischen landwirtschaftlichen Konsumvereine. In July 1883, Haas expanded his initiative into a national body, the Union of German Agricultural Cooperatives (German: Vereinigung deutscher landwirtschaftlicher Genossenschaften) in Darmstadt, which was later renamed the National Association of German Agricultural Cooperatives (German: Reichsverband der deutschen landwirtschaftlichen Genossenschaften) and moved to Berlin in 1913. Early on, the cooperatives in Haas's network in Hesse used Landwirtschaftliche Kreditbank in Frankfurt, a commercial bank, for wholesale financial services, but in 1883 they opted under Haas's leadership to create their own central institution, the Landwirtschaftliche Genossenschaftsbank AG in Darmstadt, which DZ Bank now views as its origin story. For national business, Haas's network then established a relationship with the Soergelbank in Berlin, but grew dissatisfied with it and in 1902 founded their own national financial institution, the Landwirtschaftliche Reichsgenossenschaftsbank GmbH in Darmstadt.[4]
In 1895, the Prussian government in Berlin and its finance minister Johannes von Miquel fostered the establishment of Preussische Central-Genossenschaftskasse, also known as the Preussenkasse, to facilitate funding of local agricultural cooperative banking throughout Prussia, with capital provided by the Prussian state. Helped by new legislation on limited liability, the number of cooperative banks in Prussia doubled between 1895 and 1900.[4]
In 1901, Karl Korthaus[de] initiated a second network of professional cooperatives alongside the one created a half-century earlier by Schulze-Delitzsch, represented by the Hauptverbandes der deutschen Gewerblichen Genossenschaften in Osnabrück. As a consequence, there were four separate networks of cooperative banks by the start of the 20th century.[4]
Restructuring and consolidation in the 20th century
Center-right statesman Andreas Hermes (1878-1964) was President of the Raiffeisen Reichsverband from 1930 to 1933, and participated in the cooperative group's postwar reorganization in West Germany
In the late 19th century, the Soergelbank was criticized by Volksbanken for its commercialism and largely unsuccessful business expansion outside of the cooperative space. In 1904, its losses led it to merge into Dresdner Bank, which set up specialized departments in Berlin and Frankfurt to serve its cooperative clientele. In subsequent years, Haas's Landwirtschaftliche Reichsgenossenschaftsbank in turn went into distress and eventually an orderly liquidation in 1912, and the Landwirtschaftliche Genossenschaftsbank met the same fate in 1913. The Hessian cooperatives created a new institution, the Zentralkasse der hessischen landwirtschaftlichen Genossenschaften as a substitute. In April 1920, Schulze-Delitzsch's Allgemeiner Verband and Korthaus's Hauptverbandes merged their respective organizations to form the Deutsche Genossenschaftsverband (DGV), which became the national entity for all urban professional cooperative banks.[4]
In the later 1920s, economic hardship forced a similar merger between the two networks of agricultural cooperatives respectively founded by Raiffeisen and Haas, which on 1929 formed the Reichsverband der deutschen landwirtschaftlichen Genossenschaften - Raiffeisen - e.V. ("e.V." stands for a registered association, German: eingetragener Verein). With around 36,000 member cooperatives and four million individual cooperators, it was the largest cooperative organization in the world. The Deutsche Raiffeisenbank AG was liquidated and substituted by regional entities of the Reichsverband. The Preussenkasse was renamed the Deutsche Zentralgenossenschaftskasse in 1932.[4]
In 1933, like other civil society organizations, the cooperative movement became the target of the Nazi government's Gleichschaltung policy of eradicating diversity and dissent. The Reichsverband's president Andreas Hermes was swiftly arrested and replaced by Nazi Richard Walther Darré, and the Raiffeisen movement was incorporated into the Nazi agrarian movement, the Reichsnährstand. On 14 May 1934, the DGV first formalized mutual protection and deposit guarantee arrangements for its member banks,[5]:29 allowing the BVR to claim in 2022 that "The protection scheme run by the Cooperative Financial Network is therefore the world's oldest exclusively privately financed deposit guarantee fund for banks."[6]:22 In 1939, Dresdner Bank phased out its cooperative-serving operations whose business was transferred to the Zentralgenossenschaftskasse, which thus became the sole national financial institution serving the cooperative banks. During World War II, savings were directed towards investment in government bonds as part of the regime's policy of financial repression.[4]
At the end of the war, the Zentralgenossenschaftskasse found itself in the Soviet occupation zone. In 1949, the cooperatives in West Germany created a new central institution to replace it, the Deutsche Genossenschaftskasse (DGK) in Frankfurt, with support from Hermes who had narrowly escaped execution by the Nazis in 1944 and was instrumental in reviving democratic life in the new West German environment.[4] The DGK was located in a head office building am Taunustor 3, erected in phases in the 1950s on designs by Alfred Schild[de], which after 1978 was used by Commerzbank, as DGK's successor the DG Bank had moved to the nearby City-Haus high-rise, and eventually demolished in 2011 to make way for the Taunusturm development. Meanwhile in 1948, the agricultural cooperatives in West Germany had formed the Deutscher Raiffeisenverband[de] in Berlin as their new federal-level representative organization.[3] In 1956, Union Investment was created in Frankfurt to provide asset management services to the Volksbanken network.[7]
In the late 1960s, financial reform led to increased competition in the German banking sector, including with the Sparkassen, and encouraged the consideration of merger between the two national cooperative banking organizations, the Raiffeisenverband and the Deutscher Genossenschaftsverband. The negotiations were completed in 1972 with the creation of the Bundesverband der Deutschen Volksbanken und Raiffeisenbanken (BVR) in Bonn. At the same time, many local cooperatives merged, and regional organizations were consolidated. In 1975, new federal legislation redefined the role of the DGK, renamed it DG Bank, and allowed it to gradually take over the Cooperative Group's regional financial institutions. The next year, DG Bank started developing an international network, with its first offices abroad established in New York and Hong Kong. In the mid-1980s the cooperative group's regional structures in Bavaria ran into financial difficulties, and were taken over by DG Bank. This triggered a debate on the structure of the group, either with two tiers (local and federal) or three (with an intermediate regional level). In December 1989, a compromise was adopted, known as the Verbund-Konvention, which acknowledged the coexistence of two-tier and three-tier structures within the Cooperative Financial Group. In July 1990, with German reunification, DG Bank assumed the role of central financial institution for the still existing and new Kreditgenossenschaften in East Germany. In 1998, DG Bank was converted into a joint-stock company, and the cooperatives purchased the shares owned by the German federal government. In 2000, two of the remaining regional entities, Suedwestdeutsche Genossenschafts-Zentralbank AG (SGZ-Bank) in Frankfurt, a successor to the Landwirtschaftliche Genossenschaftsbank of Darmstadt, and Genossenschaftliche Zentralbank (GZB-Bank) in Stuttgart merged to form GZ-Bank.[4]
21st century developments
In 2001, DG Bank and GZ-Bank merged to form DZ Bank (for Deutsche Zentralgenossenschaftsbank), headquartered in Frankfurt. In 2016, DZ Bank in turn absorbed WGZ Bank (Westdeutsche Genossenschafts-Zentralbank) of Düsseldorf, thus completing the Cooperative Group's transformation into a two-tier structure that had started in the 1980s.
On 13 January 2013, robbers stole goods from 100 private safe deposit boxes located in Steglitz, Berlin. In the official statement the police said that bank security officer noticed smoke coming from the deposit room on Monday morning (January 14). Next they found broken deposit boxes and a 30m tunnel, the digging of which probably took a couple of weeks or even months. The tunnel (external pictures) was reportedly so well constructed that it had ceiling supports and was about 3 feet wide.[8] It connected the bank deposit and a nearby underground parking lot. Probably nobody noticed anything, because the parking lot was shielded by roulettes, and people thought that this part was under repair. There are some similarities between this robbery and the Baker Street robbery in London.[9]
Building Am Zeughaus 2 in Berlin (right), from 1899 seat of the Preussenkasse, and 1906 extension on Am Zeughaus 1 (left); now offices of the Deutsches Historisches Museum
Raiffeisenhaus in Bonn, Adenauerallee 127, next to the previous building and a stone's throw from the former Federal Chancellery, former head office (and now Bonn office) of the Deutscher Raiffeisenverband[de]
The Cooperative Group's entities, which are also directly or indirectly member institutions of the BVR, include:
hundreds of local cooperative banks generally called Genossenschaftsbank ("cooperative bank"), Volksbank ("people's bank"), Vereinigte Volksbank ("united people's bank"), Raiffeisenbank, Raiffeisen-Volksbank or Volksbank Raiffeisenbank or VR Bank;
14 PSD Banks, cooperative banks whose name is an acronym for "post, savings and loan associations" (German: Post-, Spar- und Darlehnsvereine);
11 Sparda-Banks, cooperative banks whose name is a portmanteau also referring to savings and loans (German: Sparen und Darlehen);
The core financial structure of the Cooperative Financial Group is its Institutional Protection Scheme (IPS), a mutual support arrangement in accordance to Article 113(7) of the EU Capital Requirements Regulation. As of end-March 2022, the Cooperative IPS included a total of 781 entities.[11] The entity that operates the IPS is Bundesverband der Deutschen Volksbanken und Raiffeisenbanken Sicherungseinrichtung, also known as BVR-SE.[12]:15
As with the Sparkassen-Finanzgruppe, the interventions of the Cooperative Group IPS are generally not made public. The International Monetary Fund disclosed in 2016 that the IPS had provided support to member banks in two cases in 2011, for a total intervention amount of €114 million, and again in 2013 and 2014 for €11 million in each case.[6]:22
Deposit insurance
As a consequence of the EU Deposit Guarantee Scheme Directive (DGSD) and the broader policy of European Banking union, the BVR has set up a statutory deposit insurance scheme, in addition to its pre-existing IPS and operated by a separate legal entity, BVR Institutssicherung GmbH (BVR-ISG). BVR-ISG is recognized as a deposit guarantee scheme under DGSD; it operates alongside the IPS and in coordination with it,[13] with a liability arrangement that ensures that the IPS funds are readily available to BVR-ISG.[6]:21
The membership of BVR-ISG is identical to that of the IPS entity BVR-SE and to that of the BVR itself.[6]:21-22
Accounting
The BVR publishes consolidated financial statements of the Cooperative Financial Group, in line with the reporting requirements for institutional protection schemes set out in Article 113(7)(e) of the EU Capital Requirements Regulation. These financial statements are prepared in line with International Financial Reporting Standards. They are not reviewed by an external auditor.[14][15] Separately, DZ Bank publishes audited consolidated financial statements.
International activities
The Cooperative Financial Group's operations are predominantly domestic in Germany. Even for the central financial institution DZ Bank, Germany represented 88.3 percent of total operating income in 2020.[16]
Many of the group's local member banks use the Volksbank or Raiffeisenbank name or variants thereof, reflected in the abbreviations "VR" or "R+V" in the names of some of the Finanzverbund's entities. Other local banks have kept a pre-existing name that predates the constitution of the Cooperative Group as a national network.
With the increased integration of the formerly separate Volksbanken and Raiffeisenbanken networks, the Cooperative Group has created a blue-orange color code that blends features of the two previous logos, respectively a stylized "V" and a house gable motif with sculpted horseheads, the latter already present during Raiffeisen's lifetime. The new logo has been adopted by most of the group's cooperative member banks, with few exceptions such as Bausparkasse Schwäbisch Hall which has kept its historic red-yellow logo.
Friedrich Wilhelm Raiffeisen was a German mayor and cooperative pioneer. Several credit union systems and cooperative banks have been named after Raiffeisen, who pioneered rural credit unions.
DZ Bank AG is the second largest bank in Germany by asset size and the central institution for around 800 cooperative banks and their around 8,500 branch offices. Within the German Cooperative Financial Group, which is one of Germany's largest private sector financial service organizations and manages assets of around 1.200 trillion euros, DZ Bank functions both as a central institution and as a corporate and investment bank.
Cooperative banking is retail and commercial banking organized on a cooperative basis. Cooperative banking institutions take deposits and lend money in most parts of the world.
The Deutsche Genossenschafts- und Raiffeisenverband e.V. (DGRV) is the Co-operative federation for German Co-operatives.
The European Association of Co-operative Banks (EACB) is a European interest group representing cooperative banks in the European Union (EU) and five non-European countries. Established in 1970, the non-profit association "represents, promotes and defends" the common interests of its 27 member institutions and 2.500 cooperative banks regarding banking as well as cooperative legislation.
Co-operative Bank or Cooperative Bank may refer to:
The Raiffeisen Banking Group is a group of cooperative banks in Austria. The Austrian Raiffeisen banks are not consolidated under a single parent entity but are financially linked through a common institutional protection scheme and deposit guarantee scheme. The group's international operations, by contrast, are consolidated under Raiffeisen Bank International (RBI).
Union Investment is the investment arm of the DZ Bank Group and part of the cooperative financial services network. It was founded in 1956 and is headquartered in Frankfurt.
The National Association of German Cooperative Banks is the umbrella association for the German Cooperative Financial Group. Its origins go back to 1864 as Allgemeiner Verband der auf Selbsthilfe beruhenden Deutschen Erwerbs- und Wirtschaftsgenossenschaften. As of 2015 it had 1,021 members, which represents all the cooperative banks in Germany, including local cooperative banks, PSD banks, Sparda banks, Church banks and Cooperative financial institutions, managing around 1.200 trillion euros.
The Bankcard-Servicenetz is a German ATM card interbank network group provided by the Volksbanken und Raiffeisenbanken services group. Technically it is not an interbank network but uses the pre-existing girocard network. Member banks of this cash credit group charge ATM usage fees at a low level and most customers of the co-operative banks enjoy free withdrawal from their accounts. With 19,200 ATMs the Bankcard-Servicenetz group is the second largest ATM group in Germany.
VBU Volksbank im Unterland eG is a cooperative German bank situated in Schwaigern, Baden-Wuerttemberg. The bank is a member of the German Cooperative Financial Group and of its representative association, the Bundesverband der Deutschen Volksbanken und Raiffeisenbanken, as well as of the Baden-Wuerttembergischer Genossenschaftsverband.
Raiffeisenbank or Raiffeisen Bank refers to cooperative banks in Europe that are rooted in the early credit unions of Friedrich Wilhelm Raiffeisen. The name is found in:
TakarékBank was, before merging with MKB Bank to form MBH Bank, a banking and financial services corporation in Hungary and the central institution for more than 60 co-operative banks and their 1,100 branch offices. In 2019 TakarékBank consolidated 11 saving co-operatives to form the fifth largest Hungarian financial institution, owning assets worth HUF 2.3tn.
The PSD Bankengruppe is a German cooperative banking group consisting of 14 autonomous and independent financial institutions. The business model of the PSD banks is a combination of regional direct and affiliated bank. It provides retail banking services via internet, telephone, e-mail, mail and fax or at local branches, it only provides services to retail clients and does not offer banking to self-employed and businesses.
The PSD Bank München which has its headquarters in Augsburg, Germany, is a regional operating direct bank for private customers, who are part of the PSD Banking Group. The bank is a member of the Bundesverband der Deutschen Volksbanken und Raiffeisenbanken (BVR), together with 13 other independent PSD banks. Its business area expands across Swabia, Upper Bavaria and Lower Bavaria, where the bank serves about 85,000 private customers. The PSD is among Munichs biggest cooperative banks, with total assets of over 2 billion Euro. Its legal supervision is carried out by the Federal Financial Supervisory Authority.
Bausparkasse Schwäbisch Hall AG is a building society in Germany, active abroad with subsidiaries in Eastern Europe and China. It has more than 10 million customers. Shareholders are the cooperative central bank DZ Bank in Frankfurt am Main and around 600 cooperative banks. The building society has its headquarters in the city of Schwäbisch Hall in Baden-Württemberg.
The Volksbank Neckartal eG is a German cooperative bank headquartered in Eberbach.
The Frankfurter Volksbank eG is a Cooperative bank and has its headquarters in Frankfurt am Main. The bank's business area includes the city of Frankfurt and parts of the surrounding area.
Münchener Hypothekenbank eG is a mortgage bank under the legal form of a registered cooperative. The shareholders of MünchenerHyp are other cooperative banks and approximately 60,000 cooperative customers. MünchenerHyp is a member of the Verband deutscher Pfandbriefbanken, of the Bundesverband der Deutschen Volksbanken und Raiffeisenbanken (BVR) and of the Bavarian Cooperative Association. It has been designated as a Significant Institution since the entry into force of European Banking Supervision in late 2014, and as a consequence is directly supervised by the European Central Bank.
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![A Eurocheque guarantee card issued by Dortmunder Volksbank [de] before 1993, showing the former Volksbanken and Raiffeisenbanken logos EC-Karte der Dortmunder Volksbank gultig bis 1993.png](http://upload.wikimedia.org/wikipedia/commons/thumb/e/ec/EC-Karte_der_Dortmunder_Volksbank_g%C3%BCltig_bis_1993.png/220px-EC-Karte_der_Dortmunder_Volksbank_g%C3%BCltig_bis_1993.png)
