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The cohesion contract

Joining the Group through the signing of a cohesion contract allows BCCs on the one hand to maintain the distinctive features of local cooperative banks, and on the other to benefit from the support of the parent company in their ability to serve shareholders and customers, to stimulate the development of their local communities and to generate income.

By signing the agreement, each BCC becomes a shareholder in the capital of the parent company, remaining the owner of its own assets.

The organisational structure of the parent company Iccrea Banca is based on the operating model and strategic and operational activities required by the relevant regulations and the cohesion contract, which can be summarised in three general areas:

  • Management, coordination, guidance and control
  • Provision of services to affiliated BCCs and immediate perimeter companies
  • Conduct of the parent company's own activities


Management, coordination, guidance and control

According to the cohesion contract, the parent company was in particular entrusted with management, coordination, guidance and control aimed at:

  • Protection of the stability, liquidity and compliance of the BCCs with the new rules of the banking union.
  • Definition of a cross-guarantee system based on the principle of reciprocity and proportionality of the autonomy of the BCCs with respect to their health (Early Warning System) to prevent and manage possible critical situations and ensure their soundness.
  • Protection of the mutualistic purposes of the BCCs for the promotion of their local economies.

In the event of potential banking crises, the parent company may then arrange for appropriate measures to prevent or remedy critical situations through preventive, supportive, corrective or sanctioning measures.

The cross-guarantee system

A central element of the Cooperative Banking Group is the system of cross-guarantees. In fact, the cohesion contract signed by the banks belonging to the Cooperative Banking Group provides for a joint and several guarantee of the obligations undertaken by the parent company and the other participating banks, in compliance with the prudential regulations of banking groups and individual participating banks. It is a guarantee system that on the one hand operates outside the Group to protect customers, and on the other provides a financial support mechanism for the solvency and liquidity of the Group's participants.

Financing

The Cooperative Credit Reform provided for a further form of guarantee for the system's solidity by introducing the possibility for the parent company to contribute to the capital strength of BCCs through financing under Article 150-ter of the TUB - Consolidated Law on Banking (which can be included in the best quality capital).

The Cooperative Credit Depositors' Guarantee Fund

In addition to the mutual guarantee between the parent company and the affiliated banks by the Cooperative Credit Reform (Italian Law no. 49/2016) envisaged in the cohesion contract, over time Cooperative Credit has put in place a variety of instruments to guarantee the overall soundness of the system..

Operational since 1997, the Cooperative Credit Depositors’ Guarantee Fund took over the responsibilities of the Central Guarantee Fund, which had been protecting Cooperative Credit depositors since 1978, almost 20 years before this form of guarantee became mandatory under law. Today, the FGD of Credito Cooperativo, like the Interbank Fund, protects BCC depositors up to the legal limit of 100,000 euros.

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