The financial and economic performance of social banks

ABSTRACT

The financial crisis of 2008 provides evidence for the instability of the conventional banking system. Social banks may present a viable alternative for conventional banks. This article analyses the performance of social banks related to the bank business model, economic efficiency, asset quality, and stability by comparing social banks with banks where the difference is likely to be large, namely with the 30 global systemically important banks (G-SIBs) of the Financial Stability Board over the period 2000–2014. We also analyse the relative impact of the global financial crisis on the bank performance. The performance of social banks and G-SIBs is surprisingly similar.

KEYWORDS:

• Social banks
• alternative banks
• bank stability
• bank efficiency
• financial intermediation

JEL CLASSIFICATION:

• G21
• G00
• G18
• G20
• A13

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ See also Relano (2015).

² GABV (2014) analyses social banks in the Global Alliance for Banking on Values and their impact on the real economy, resilience, returns and growth using descriptive statistics.