Cooperative Banks Respond to Scandals with Tougher Protection System

The reform package bears the name "Geno Next Level." According to the association's leadership, key elements are improved early warning systems and significantly tightened intervention rights vis-à-vis institutions that have attracted attention. Kolak said verbatim: "Unsere Maßnahmen verbessern unsere Frühwarnsysteme und verschärfen unseren Durchgriff deutlich." In addition, a new code of conduct was introduced for the executive boards and supervisory boards of member banks.

Rationale: High-Risk Transactions at Individual Banks

The president justified the reform with a view to the past: those responsible at individual banks had been seen engaging in "hochriskante Geschäfte, Missmanagement oder grob fahrlässiges Verhalten." "Wir haben 'Geno Next Level' angestoßen und umgesetzt, weil wir bei Verantwortlichen in einzelnen Banken hochriskante Geschäfte, Missmanagement oder grob fahrlässiges Verhalten gesehen haben," Kolak explained. The consequences of such misconduct often become visible only years later and then burden the entire solidarity community.

According to the association, the cooperative financial group comprises 646 banks and specialized institutions. They serve more than 30 million customers, according to their own figures. The association described the financial year as economically successful: pre-tax profit exceeded the prior-year 2024 figure of 10.8 billion euros, reaching 11.6 billion euros. Net profit stood at 7.4 billion euros.

Economic Figures of the Cooperative Banks

Despite the increase, the result fell short of the record year 2023, when the group had generated 14.4 billion euros in pre-tax profit. According to the figures, the result was supported by a slightly higher net interest income and a sharply grown insurance business. The insurance business increased by 56 percent.

Under the new requirements, the executive boards and supervisory boards of the affiliated institutions will have to grapple with the tightened requirements in the coming months. Kolak announced that the reform was intended to safeguard the group's stability over the long term. The measures are designed to prevent misconduct by individual banks from burdening the entire solidarity community.

Outlook: Tighter Controls in Practice

The BVR is the interest representation of the Volksbanken and Raiffeisenbanken in Germany. Its protection system operates on the principle of mutual assistance: in an emergency, other institutions step in for an endangered member. The reform is intended to strengthen this principle through clearer rules and earlier intervention options.

With Volksbank Braunschweig-Wolfsburg, an institution within the network has for the first time in a long while again publicly come to attention as having had to draw on the protection fund. The separation from the CEO as well as the drawdown of the fund are considered triggers for the tightened controls. The BVR emphasized that the solidarity community had so far absorbed damage caused by individual misconduct.