Value-centred banks out-perform conventional banks

By Cornelia Unger-Leistner, Christian von Arnim, June 2012

VANCOUVER (NNA) - There has been strong growth of value-centred banking worldwide. This could clearly be seen at the latest meeting of the Global Alliance for Banking on Values (GABV), held earlier this year in Vancouver, Canada.

The GABV is a grouping made up of sixteen of the world’s leading sustainable banks. According to a study compiled with the support of the Rockefeller Foundation, the financial indicators of these value-centred banks show that they are outperforming even the biggest conventional institutions.

The study presented in Vancouver compared the financial indicators of the members of the Global Alliance between 2007 and 2010 with those of the world's 29 biggest conventional banks. The sustainable banks loaned out on average 70 percent of their balance sheet total, compared to only 38 percent by the conventional institutions.

The conventional banks also trailed far behind the GABV members in terms of the growth in credit volume, seeing only an increase of 20 percent in the study period as opposed to the GABV members' 80 percent. The sustainable banks had a core capital ratio of 14 percent, as compared to the 10 percent for the conventional institutions.

The attraction of the Global Alliance to other banks was evident in Vancouver through the great interest in joining the grouping. The Canadian bank Assiniboine Credit Union was accepted into the GABV and there were a further 10 applications to join the Alliance.

Six criteria have to be met as a prerequisite for membership, including the integration of social and ecological criteria into the core of the business model, a focus on the real economy as well as a general orientation encompassing the long term needs of customers.

This year the GABV is also planning an inter-bank exchange programme for employees. The human resources managers also want to work more closely together and develop an international seminar program. Furthermore, the sustainable banks are developing a collective financial instrument to continue the already successful increase in equity: as a participant in the Clinton Initiative, the group set itself the target in 2009 of achieving a gain of 250 million US dollars within 3 years. With a total of 400 million dollars, this goal has already been far surpassed.

The meeting was hosted by the Vancity Credit Union, located in Vancouver. Vancity is the largest English-speaking cooperative bank in Canada. It offers its members ethical and innovative financial products.

The next meeting of the Global Alliance will take place in March 2013 in Berlin, hosted by the Bochum-based GLS Bank. As the world's first social and ecological universal bank, GLS Bank was a pioneer of this forward-looking way of banking. It is one of the founding members of the Global Alliance for Banking on Values (GABV).

www.gabv.org
www.gls.de

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