The practice of mutuality in Trentino Cooperative Bank System

This report is the result of collaboration between the Common Fund of Trentino Rural Banks and Euricse. It is based on the analysis of information and indicators aimed at assessing the social function performed by Trentino Cooperative Banks. The aim of the report is to provide an update from the first edition of the study published in 2021.

Social function is an increasingly relevant issue in the context of Cooperative Credit Banks and represents the main diversity of these institutions compared to other banks. Despite the reform of Cooperative Credit Banks, which has led to significant organizational changes, the social function aspect has not been affected. However, some aspects such as decision-making autonomy and operational efficiency have been affected by the reform.

Another factor that makes the topic of social function current is the increasing focus on sustainability, which also involves non-cooperative credit institutions. The acronym ESG (Environmental, Social, Governance) has become of increasing interest to all banks, including communication and lending practices. This centrality of the topic is likely to increase over time.

Given the importance of these issues, it was considered essential to investigate the concept of mutuality and social function in the context of Trentino Cooperative Credit. The study is based on data and information related to banking, human resource development, involvement of local communities in governance structures, and non-banking activities. The incidence of the pandemic period, particularly the 2020-2021 biennium, was also analysed.

The study uses two main data sources: those available from Cassa Centrale Banca and data collected directly from the Trentino Rural Banks through a self-completed questionnaire. Data collection began in November 2022 and ended in March 2023, including information for fiscal years 2021 and 2022. Interviews were also conducted with the presidents and directors of the Rural Banks to obtain additional information.

The report is structured in five chapters. The first provides a general overview of the Trentino Cooperative Credit System, highlighting some of the changes that have occurred over time. The second chapter focuses on the interpretation of the social function by Trentino Rural Banks, based on interviews conducted with managers. Subsequent chapters present quantitative results related to banking, human resources and territorial development through non-strictly banking activities. Finally, the conclusions comment on the main findings from the study.