A study comparing key financial information about the world’s biggest banks, or Global Systemically Important Financial Institutions (GSIFIs), and a group of sustainable banks shows significant differences. 

The report can be read here.
A French translation of the report can also be read here.

Berlin, 29 November 2012 – The report, which examines the performance of banks over the last decade (2002-2011) shows that dominant big banks lend less, attract less deposits and have a weaker capital base than sustainable banks. The study reveals that sustainable banks are both investing more in a greener and fairer society, and their business model is more robust and resilient.

Key findings:

  • Loans/Total Assets

GSIFIs                        40.7%

Sustainable Banks     72.4%

  • Deposits/Total Assets

GSIFIs                        42.0%

Sustainable Banks     72.5%

  • Equity/Assets

GSIFIs                        5.3%

Sustainable Banks     7.5%

  • Tier 1 Capital/Risk Weighted Assets

GSIFIs                        10.0%

Sustainable Banks     12.2%

  • Return on Equity

GSIFIs                        10.8%

Sustainable Banks       9.7%

The Global Alliance of Banking on Values (GABV), an independent network of 20 of the world’s leading sustainable banks, believe the results of the study demonstrate the strength of values-based banks in this unique comparison. They are calling on politicians and regulators to use the sustainable banking model as an important reference point for making the banking system more resilient and to ensure it serves the real economy.

Peter Blom, Chair of the GABV and CEO of Triodos Bank: “This study is crucial because it highlights the fact that the banks that dominate the current banking system have relatively low levels of lending to the real economy and relatively low capital positions.

“Sustainable banks haven’t developed their banking models because of regulations. They operate a different business model because of their values-based approach. The evidence now shows that this approach means a commitment to the real economy, a demonstrable resilience, and steady and reasonable returns.”

Thomas Jorberg, member of the GABV Steering Committee and CEO of GLS Bank: “For some time sustainable banks have quietly gone about their business, focusing on financing the real economy and adopting a prudent approach to their capital position, precisely because they view profit as a means to an end, not an end in itself.

“This new study is crucial, because it exposes how the world’s biggest banks have disconnected from the real economy. Regulators have a chance to learn from these findings and move the banking industry on to a surer, fairer footing. We call on them to take it.”

———

The study also revealed marked differences in growth between both groups, with the sustainable banks growing significantly faster than the GSIFIs.

Compound Annual Growth Rates (CAGRs)

Sustainable Banks

GSIFIs

Loans

 19.7%

7.8 %

Deposits

 19.6%

10.0 %

Assets

 19.0%

10.4 %

Equity

 20.1%

11.5 %

Total Income

 16.6%

6.9 %

The Global Alliance for Banking on Values (GABV) released the ‘Strong and Straightforward: The Business Case for Sustainable Banking’ report today, comparing the financial performance of 22 sustainable banks, and 28 of the world’s Globally Systemically Important Financial Institutions (GISIFs) between 2002 and 2011.

Developing this analysis required the gathering of substantial financial information from a variety of public and private sources. The sustainable banks were asked to validate the publicly available information used in the study. Publicly available annual reports were gathered for the GSIFIs.

 

Contact

For access to the financial data underlying this research or questions with regards to it, please contact:

James Niven, GABV
E james.niven@gabv.org
T +31-30-694-2421

Christof  Lützel, GLS Bank
E christof.luetzel@gls.de
T +49-234-5797-5178

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