Credit cooperatives are eating up land from banks and savings banks in the Valencian Community both in terms of loans and deposits. They are not large percentages and it is recent, but it occurs at the same time that the banking system is in full conversion again. The latest report from the Ministry of Finance on the sector, corresponding to the third quarter of 2021 and recently published, highlights that at the end of last September the market share in deposits of cooperatives amounted to 14.74%, compared to 12, 04% from 2017, which was the lowest level since the start of the Great Recession in 2008.
In loans, the evolution is similar, although the data is lower. Thus, the third quarter ended with a market share for rural savings banks and autonomous credit cooperatives of 10.56%, five tenths more than at the beginning of the year and about one point above the 9.72% of 2017 To continue with the previous comparison, the participation of these entities was 8.14% in 2008.
niches
The deputy director of the Valencian Institute of Economic Research (IVIE), Joaquín Maudos, considers that this increase is the result of the fact that many credit cooperatives “are taking advantage of market niches after the closure of bank offices, which can contribute to gain share”.
However, the Professor of Economic Analysis at the University of Valencia calls for “caution” when interpreting the data on deposits, “because with interest rates so low and inflation at 6.5%, there is a clear incentive to move deposits to investment funds and cooperatives are less active there than banks”. That is to say, that these may be suffering from more outflows and, therefore, giving up quota to the former.
Caixa Popular is the main cooperative in the province of Valencia and the second in the region after the Caja Rural Central de Orihuela. Its general director, Rosendo Ortí, points out that “the important thing is the trend, even if it is little”. The manager affirms that this cooperative, in what could be an example of what is happening in the entire sector, had “good results last year thanks to the growth in the business of companies”, one of the main reasons, therefore, that they have given more credits. Ortí affirms that “before it was difficult for us to enter” in the mercantile companies, but now “they have realized our notoriety and, when they start working with you, they see that you offer an agile and professional service and that we are also Valencian”, a distinctive fact that the director stresses at a time when autonomy has lost a substantial part of its financial system.
Since the financial crisis and despite CaixaBank and Banco Sabadell having their headquarters in Valencia and Alicante, respectively, the Valencian Community has suffered a considerable decline in this sector. Bancaja, CAM and Banco de València disappeared, but also Ruralcaja, Caja Campo or rural Castelló, which ended up being absorbed by the Andalusian Cajamar. The latter added two dozen autonomous entities to its cooperative group, which maintain a certain independence. The sector is completed with about another dozen firms, such as Caixa Popular, which go their own way but under the umbrella of the Caja Rural group.
Rosendo Ortí adds another factor and that is that, contrary to what was expected at the start of the pandemic, business delinquencies with banks have not skyrocketed with the end of the deadlines for returning ICO credits. “The government measures have avoided defaults and many companies asked for more than they needed, so it has not been difficult for them to return the money. This has made it possible to give more credit.”
Offices
The manager also considers that cooperatives “go against the tide of banking, which has focused on the digital world and seems to be bothered by customers. We let the client choose if they want to work digitally or go to the office to be attended to. That is why we are opening branches” and moving to the premises that the banks leave vacant due to the closure of office establishments that had a worse location: “The transfer costs less and improves our image because customers see that we are growing,” says Ortí.
Regarding deposits, the manager affirms that Caixa Popular has grown by 14% “without carrying out a fundraising campaign. They are people who leave banking because they have been transferred to an office that is very far from their home or who want to force them to work in electronic banking. The withdrawal policy of the banks is not benefiting.