FINANCIAL ASPECTS OF SUPPORTING COMMUNITY SERVICES BY COOPERATIVE BANKS - EMPIRICAL EVIDENCE FROM POLAND

The main objective of the study was to determine the influence of internal factors on initiated support to the community within the framework defining the activities pertaining to a business' social responsibility as seen for Poland's co-op banks. The study took advantage of balanced data panels sourced from 56 co-op banks from 2011-2017 reflecting 11 independent variables: net profits (thousands PLN), ROA (%), ROE (%), C/I, NPL (%), TRC (%), balance totals (thousands PLN), total own funds (thousands PLN), total deposits (thousands PLN), total credits (thousands PLN), number of accounts, and bank membership, on the one hand, and on the second, total sum contributed by a bank for pro-social activities (thousands PLN), the number of bank supported pro-social initiatives, and participating funds contributed to pro-social activities from the bank's net profits (%). Results indicate that larger banks contributed proportionally less funds earmarked for community initiatives directed towards the benefit of local markets and community, and smaller banks, more frequently located in rural areas, earmarked larger portions of profits for local communities; however, this does not mean that the contributions were larger comparatively than those of larger co-op banks. The co-op banks decide the sums of contributions for community initiatives on the basis of their current condition - according to current profits, current credit volume and total accounts, and considering financial security as expressed by the solvency coefficient level of the previous year.