IMPACT OF THE BANKING GLOBALIZATION ON THE COOPERATIVE BANKS: EVIDENCE FROM POLAND

This paper focuses on Poland experience with large foreign bank penetration and changes in banks' ownership structures since the early 1990s. The purpose of this paper is to evaluate the impact of globalization of the banking on lending and performance of Polish cooperative banks. Research methods cover the comparative analysis of scientific literature documents and reports as well as statistical data. The paper points out that over the last several years the profits of cooperative banks have been decreasing thereby limiting their ability to increase equity through accumulation of profit. The main source of funding for cooperative banks are deposits from the non-financial sector. Liquidity risk or funding risk refers to the ability of funds when needed. The bank liquidity risk was reduced by implementation of Institutional Protection Scheme (IPS) based on associations of Polish cooperative banks. However, over 12% of cooperative banks stayed out of IPS at the end of 2017 and 4 cooperative banks failed to carry out this minimum capital requirements set up by Polish Financial Supervision Authority. We further find that bank ownership structures influence their lending behaviors. The availability of subsidized agriculture loans and cooperative bank lending policies are an important source of funding for the agriculture sector and the rural community.