Deposits as a Key Source of Financing Cooperative Banks: The Deposit Activities of a Group Cooperative Banks in Poland

Abstract

Cooperative banks, similarly to other credit institutions, obtain financial resources from entities with finance surplus and satisfy the needs of those entities, which suffer from financial deficits. In comparison to commercial institutions, it is the large and stable deposit base, which is crucial for financial performance of cooperative banks. The aim of this chapter is to examine the scale and structure of deposit activities of cooperative banks as compared to the activities of other banks in Poland in 2015–2017. Taking into account selected group of cooperative banks, the second objective is to specify the factors that affect the structure of deposit activities. The study uses quarterly financial data from the years 2009–2016 of a selected group of 75 cooperative banks in Poland. Cooperative banks in Poland use deposits as a source of financing their activities to a greater extent. Cooperative banks tend not to use interbank deposits, but the local government sector is an important source of financing for them. Based on the econometric panel models, it was found that the increase in the share of deposits from the nonfinancial sector in assets is positively affected by the increase in lending, while the negative dependence is on the scale of operations.