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A sustainable and profitable banking model

In October 2013 the Global Alliance for Banking on Values (GABV) released an update to its 2012 study comparing the financial performance of the world’s biggest banks, or Global Systemically Important Financial Institutions (GSIFIs), with a group of leading sustainable banks. The results, consistent with past research, continue to show that in all key measures that matter, sustainable financial institutions outperform the ‘too-big-to-fail’ banks. Sustainable banks:

  • Lend almost twice as much of their assets on their balance sheet (75.9% compared to 40.1% for the big banks, from 2003 to 2012)
  • Rely on customer deposits to a greater degree to fund their balance sheet (73.1% versus 42.9%)
  • Maintained stronger capital positions, especially when measured by equity/total assets (7.2% versus 5.5% relative to their larger contemporaries)
  • Deliver a higher return on assets (0.53% versus 0.37%) with lower levels of volatility

The study concluded that overall sustainable banks were resilient, supported the real economy, and provided stable returns.

The Global Alliance for Banking on Values (GABV) is an independent network of 25 sustainable financial institutions from Asia, Africa, the Americas, Europe and Australia, including Vancity. GABV members have combined assets of over $70 billion, serving millions of customers around the world.