CO-OPERATIVE BANKS' PROFITABILITY AFTER 2008: EVIDENCE FROM EU-27

Co-operative banks are a special category of business which appeared in Germany, around the year 1869, in order to satisfy the financial needs of farmers. The differences regarding the business principles between this type of bank and commercial banks, made from co-operative banks the most profitable business which seems to overcome the financial crisis without problems. Through this paper we want to identify the manner through which the loans have affected the co-operative banks. profitability, for the co-operative national associations from EU-27, which are members of European Association of Co-operative Banks (EACB). In order to achieve this, we will use the panel data for the period 2008 - 2012 in order to catch the financial crisis effects into our data. Further we will estimate an ordinary least squares model between the banks. profitability and the loans to asset ratio and deposits to assets ratio, in order to highlight the main variable which is responsible for the evolution of co-operative banks. profitability. Based on our results, we will be able to see the way in which each factor is influencing the profitability and if the bank or the supervision authority of each country is able through different political tools to influence the profitability, in order to facilitate a stable financial environment.