Are ethical banks more profitable than traditional banks?
(Please note that this article is available in French only)
In this article, the author first defines return on equity (ROE) and outlines where the most ‘complete’ bank ROE can be found in France, at ACPR and Banque de France. The author also highlights that currently there is no central website that combines this information for the six main French banking groups. The author provides the maximum and minimum ROE for the French banks. The second part of the article is dedicated to values-based banks, thanks to the GABV network. The selection includes France’s Crédit Cooperatif, and an additional non-GABV member, La Nef to build comparisons. The article demonstrates that values-based banks have lower ROE than traditional banks. It also shows that the values-based banks’ ROE indicates a social standard that could be explained by the fact that these banks are transparent, offer simple financial products, do not take risks but favour environmental projects.
The author also highlights a study led by GABV over a longer time period, highlighting the fact that a sufficient ROE is required for a bank to be resilient and sustainable in the long-term.