Publication detail

A Comparison of Financial Performance of Czech Credit Unions and European Cooperative Banks

Author(s): Mgr. Matěj Kuc ,
prof. PhDr. Petr Teplý Ph.D.,
Type: IES Working Papers
Year: 2015
Number: 18
Published in: IES Working Papers 18/2015
Publishing place: Prague
Keywords: credit union, cooperative banking, financial statements, moral hazard, credit risk, system GMM, Z-score
JEL codes: C23, G21, L25
Suggested Citation: Kuc M., Teply P. (2015). “ A Comparison of Financial Performance of Czech Credit Unions and European Cooperative Banks ” IES Working Paper 18/2015. IES FSV. Charles University.
Grants: GACR 14-02108S The nexus between sovereign and bank crises GACR 15-00036S Credit Risk Modeling for Financial and Commodity Assets Portfolios GAUK 105815 (2015 - 2017) Banking fee and commission income – its determinants and impact on bank’s profitability and risk
Abstract: Czech credit unions have been yet criticized by both academics and regulatory representatives for its business based on moral hazard and excessive risk taking. This paper empirically assesses financial performance of Czech credit unions in relation with other European cooperative banks in terms of profitability and stability. To do that, we created a unique dataset of 283 cooperative banks from 15 European countries in the 2006–2013 period. System GMM method is employed as a main instrument of our empirical analysis and alternative panel data methods are used as supplementary techniques. Results revealed poor performance of Czech credit unions in terms of both profitability and stability. Moreover, adverse trends in stability measures of Czech credit unions are in sharp contrast to the tendencies in the rest of cooperative banks in our sample. To conclude, we argue that bigger Czech credit unions will face serious financial problems in coming years.
Downloadable: wp_2015_18_kuc_teply




Patria Finance