Financial Resilience of Cooperative Banks: The Polish Experience

Objective: The financial resilience of a bank is the key to its stable development and a key benchmark for the planning of its activities. Only financially resilient banks are able to perform their functions effectively, withstand crisis and, most importantly, secure the trust of their customers. The purpose of this article is to study the financial resilience of a cooperative bank drawing on the example of one of the largest and oldest banks in Poland, Poznański Bank Spółdzielczy. Design/Methodology/Approach: The methods of generalization, grouping, comparison, analysis, and descriptive methods were used to analyze the activities and key indicators of financial resilience of a cooperative bank. Statistical and graphical methods were used to process the bank's data and arrange them in tables and figures. For the purposes of this study, the data from the website of Poznański Bank Spółdzielczy for 2013-2023 were used. Findings: The article analyzes the key performance indicators of a cooperative bank reflecting its financial resilience. In particular, the bank's assets and its resource potential (liabilities), as well as profitability, ROI and solvency of the bank. Based on the analysis of these indicators, a conclusion about the overall assessment of the financial stability of a cooperative bank has been drawn. Over the past ten years, the changes of the key performance indicators of Poznański Bank Spółdzielczy indicates a stable development and strengthening of its position in the financial market. Practical Implications: This article contributes to the body of literature on the peculiarities of the cooperative banks’ operations. Besides, the study of the financial resilience of these financial institutions allows us to better understand their ability to withstand financial shocks, given their business peculiarities. Originality/Value: A characteristic feature of cooperative banks is the possibility of becoming an Associated Bank member. This allows them to rely on additional funding from the Associated Bank where they need financial resources. Besides, Poznański Bank Spółdzielczy is a member of the SGB Protection System, which was created by a group of cooperative banks in Poland. This institution legally ensures the liquidity and solvency of the banks in the system and can take effective measures to limit risk and ensure the resilience of the cooperative bank. Such an internal structure of supervision over the operations of cooperative banks is a guarantee of stability and resilience of their operation and allows for faster prevention of the impact of negative factors.