More efficient and solid Bcc ten years after the reform

As the Governor of the Bank of Italy recalled on 8 October, 'cooperative banks, rooted in communities, promote inclusion and balanced growth. They are a distinctive model of banking intermediation, not least because of their democratic governance. Over time, they have expanded access to finance for households and small businesses, supporting people who would have remained excluded. Their founding mission is to serve communities'.

A social function that Bccs perform - without private speculation - in compliance with cooperative constraints and principles, such as: (a) the allocation of at least 70% of profits to indivisible reserves, an intergenerational patrimony of which members and the community are only usufructuaries; (b) the mandatory allocation of 3% for cooperative promotion; (c) the compression of profits allocable to members; (d) the disbursement of credit predominantly to members and 95% within the territory of competence; (e) the democratic control 'one head, one vote' by members; (f) the commitment to the community, regulated by Art. 2 of the articles of association and supported by the Charity Fund.

Purposes and constraints that for BCCs motivate the IRES tax deduction of 63% of the profit to the indivisible legal reserve (benefit equal to 17.3% of net profit) and the recent exemption from the contribution for the franking of the legal reserve from extra-profits.

In anticipation of greater proportionality and simplification of banking regulations, the reform persists in forcing the equating of group Bccs to the large significant banks, with consequent distortions, complexities and burdens. In the meantime, with the endorsement of the Parent Company and the Supervisory Authority (and cooperative audit), the democratic governance of Bccs risks being debased by electoral rules that, for the renewal of offices, often lead members to vote, with 'one head, one vote', a single closed list (not even long with preferences) prepared by the outgoing Board of Directors. In the 12 largest BCCs, for example, the regulations provide that the list of candidates - different from that of the Board of Directors - must be signed by disenfranchising quorums of members ranging from 1 to 7% of the shareholding structure: in practice, quorums ranging from 266 to 3,884 presenting members (an average of 1,274). A method that, if not correct, even though it moves from self-assessment and optimal qualitative-quantitative composition of the body, exposes BoDs to risks of self-reference and self-perpetuation. With appointments that could be 'ad limitum' for some board members or chairmen, considering that in the bylaws the limit of consecutive mandates (generally 5, counting from the Gbc membership, with first effects in about 9 years) is no longer applied to individual directors, but to the average of all board members.

The tide of profits caused the remuneration of more than 1,500 directors and 179 managers of the Bcc and cooperative banking groups (Gbc) Iccrea and Cassa Centrale to rise to 97 million in 2024 (+11% on 2021). In the 10 largest S.p.A. bank groups, top management remuneration also increased by 13% to EUR 64 million, but weighed on personnel costs by 0.3%. In the Bcc and Gbc, on the other hand, the burden is 3.02%, of which 1.5% is attributable to board of directors' remuneration and 1.52% to general managers (Dg). And if the incidence is decreasing from 3.33% in 2021, it is exclusively due to the 24% increase in personnel costs, which stood at +4% in the Spa groups.

In the Gbc parent companies, 2024 emoluments are aligned with those of listed banks of a similar size. The Board of Directors' emoluments amount to 2.4 million in Iccrea and 1.9 in Ccb, while the remuneration of the Managing Director Pastore (Iccrea) is 1.5 million and that of the Managing Director/DG Bolognesi (Ccb) is 1 million. The emoluments of the respective chairmen, Maino and Fracalossi, amount to 470 and 419 thousand euro respectively, to which must also be added the remuneration paid by the other banks they chair: 190 thousand by Bcc Milano and 154 thousand by Banca per il Trentino Alto Adige.

The average remuneration of Bcc chairmen is 89 thousand euro (+17% on 2021), while that of directors grows by 13% to 263 thousand euro. Higher average values are recorded for the directors of Ccb banks (300 thousand) compared to Iccrea (241 thousand), as well as in Emilia-Romagna (408 thousand) and Veneto (388 thousand). The remuneration of chairmen is about one third of that of the MDs, while in the Spa banks it is 16%.

Among the chairpersons, 40 exceed 120 thousand euro in remuneration and 4 even exceed 200 thousand: Bcc Roma 341 thousand, Bcc Veneta 279, Castellana Grotte 235 and Banca d'Alba 208 thousand. On the other hand, there are 51 directors with salaries above 300,000 euro and 16 those above 400,000 (net of severance pay, if indicated). These are the top 10 directors by decreasing amount (in thousands of euro): Banca di Bologna 691, Romagna Banca 633 (+308 Tfr), Lazio Nord 552, Carrù 514, Centro Toscana-Umbria 496 (+250 Tfr), Bcc Brescia 489, Bcc Roma 479, Castagneto Carducci 466, Terre Venete 457 and Prealpi SanBiagio 443 (+358 Tfr).

Among the risks of Bccs is that of losing the challenge of identity not only by imitating the methods and governance, but also the remuneration of Spa banks. And biodiversity, founded on cooperative values and principles, may then appear to be a mere narrative if few wonder where the cooperative spirit - which also permeates so many members, directors and employees - has gone when some presidents and directors receive salaries of a few hundred thousand euros.