BANKING. SERVING. THRIVING.The impact made by Europe’s savings and retail banks to boostthe real economy while giving back to the communities they serve.

EUROPEAN SAVINGS AND RETAIL BANKING GROUP

BANKING. SERVING. THRIVING.

The impact made by Europe’s savings and retail banks to boostthe real economy while giving back to the communities they serve.

September 2016

As Europe faces pressing economic and social challenges, people look more than ever to thesavings and retail banking model. Serving as a financial catalyst in local economies – smalltowns, big cities and everywhere in between – the savings and retail banks, no matter whatsize or shape, nourish the real economy made up of households and small and medium-sizedbusinesses.

This document aims to tell that compelling story. With the goal of being better understood bypolicymakers and stakeholders, it features facts and figures that paint a clearer picture of whatwe are and what we value: responsibly managed banks that are retail focused and regionallypresent. It includes data on employment levels, branch numbers and balance sheet items,buttressed by case studies from savings and retail banks throughout Europe.

To help highlight how well ESBG member banks adhere to the ESBG Charter for ResponsibleBusiness, this booklet offers a closer look at ways to deepen the customer relationship – builton respect and driven by our self-help roots. Data and examples also showcase our unwaveringcommitment to sustainable development, to giving back to the communities we serve, and tostaying at the forefront of need through our foundation work.

“Retail, Responsible and Regional”, the values savings and retail banks uphold are needed morethan ever. Steadfast in their mission to serve, savings and retail banks can play an even greaterrole to help Europe emerge stronger from past economic hurdles. It requires the right policythat helps unleash, not hinder, innovation to keep Europe thriving in the 21st century.

Isidro Fainé Chris De NoosePresident, ESBG Managing Director, ESBG

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Savings and retail banks are driven to convert deposits from local communitiesinto loans that finance the real economy – households and SMEs.

300.000

250.000

200.000

150.000

100.000

50.000

0DEU ESP FRA PRT CZE

60%

50%

40%

30%

20%

10%

0%ESP DEU EU28 CZE FRA PRT

n Total in the country n ESBG lending

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AIL n ESBG lending

n Other banks*

ESBGmembers have

€500 billionin SME loans on

their books in the EU,equal to roughly

a third of themarket.

Figure 1: SME loans (outstanding volume in M€), 2014 Figure 2: ESBG members’ SME lending activity:market share

Source: ESBG, OECD Source: ESBG, OECD Source: ESBG, OECD

*All other banking institutions in the European Union that are not ESBG members.

Figure 3: ESBG SME lending market sharein Europe (in %)

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One-thirdof Europeans seekingbanking services come

to our memberbanks.

Source: ESBG, OECD

68%

67%

66%

65%

64%

63%

62%

61%

60%ESBG members Other banks

> Our loan-to-asset ratio is at 67%, a higher level thanthe overall EU banking sector. It shows that we convertdeposits into loans better than anyone.

Figure 4: Loan-to-asset ratio (in %) in 2014

67%

CASE STUDY:MIKA TIMING (GERMANY)

German firm thrives thanks to relationship with local savings bank

n Company: Mika Timing GmbHn Address: Strundepark Kürtener Straße 11b, 51465 Bergisch Gladbach

When participants of the Berlin Marathon, the Chicago Triathlon or theStockholm Velothon cross the finish line, each participant's time mustbe accurately measured. Mika Timing ensures this. Mika Timing hasbecome the leading service provider for time measurement, participantmanagement and the presentation of results at international sportingevents. For Harald Mika, the company's founder, absolute reliability isgiven top priority.

Error prevention is as important for Mika Timing as it is in the aviationindustry. This is guaranteed, on the one hand, by its technologicaledge: the best measuring electronics available in the market,combined with Mika's own innovative data-processing solutions.Another factor is almost more important, however, Mika's experiencedemployees who run the equipment – i.e. the pilots of the racetrack. Nearly all of the employees have beenwith the company since it was established. This has allowed Mika to gain an outstanding reputationworldwide. And the company is still growing.

n Business model: Electronic time measurement at international sports eventsn Established: 2001 by Harald Mika in Bergisch-Gladbachn Workforce: Close to 75 full-time and 300 part-time employeesn Export: Handles approximately 400 sporting competitions worldwide for around one million athletes

per yearn Branch and subsidiary: A branch office in Switzerland and a subsidiary in Swedenn Supported by: Savings bank (called Sparkasse in German) in Cologne

Company founder Harald Mika

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BPCE: OFFERING THE BESTHUMAN AND DIGITALRELATION TO CLIENTS

BPCE’s strategic ambition is to offer the best humanand digital relation to clients. This ambition impliesnumerous programs aimed at digitalizing operations,agile working methods and sharing a true innovativespirit amongst all collaborators within the group.Strategic partnerships with key partners, thedevelopment of innovative applications facilitatingaccess to services and the continuous empowermentof collaborators, are the axes of a strategy whichmakes of BPCE a pioneer on innovation and digitaltransformation.

> https://newsroom.groupebpce.fr/digital.html

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Locally focused savings and retail banks – whether small, medium or large – servetheir customers to help spur growth at regional level through a vast network ofbanks throughout Europe. Harnessing digital means provide a further boost to

extend and deepen our contact with people, democratising finance to give greateraccess to banking.

> 1,000 banks

> 60,000 outlets

> 810,000 staff

> 30,000 staff hiredin 2015

60,000outlets

n ESBG Member Countries

CASE STUDY:GERMAN SAVINGS BANKS

Added value in communities

The Savings Banks Finance Group in Germany ismade up of around 600 independent enterpriseswith some 340,000 employees, the Group comprises415 savings banks, seven Landesbank Groups,DekaBank, nine Landesbausparkassen and eleven primary groups. Savings banksassume responsibility for the common good-through their attitude, their productsand their initiatives for society. In this way, they contribute to sustainable growth inprosperity. This is at the very heart of their duty to the public-which benefits theircustomers, as well as all citizens, businesses and municipalities across Germany.Source: Report to society

Learn more at:

> https://www.dsgv.de/en/facts/annual_report/report_society.html

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Savings and retail banks invest in the communities they serve, whether it is throughcore banking services or through its pioneering foundation work.

> Amount spend on philanthropic activities in 2015 was more than €1.7 billion.

Volume ofsocial housing loanactivity in 2015 was

€413 billion

CASE STUDY:CAIXABANK’S MICROBANK (SPAIN)

MicroBank was set up in 2007 as a social bank tochannel the microcredit activity carried on upto then by "la Caixa" through its foundation,in order to build up this work with all the rigourand sustainability of a banking organisation.MicroBank offers its products and services

through CaixaBank, which has a network of over 6,000 branches. Furthermore,MicroBank has signed cooperation agreements with over 500 organisations in orderto foster self-employment by providing access to finance in the form of microcredits,especially for groups in a situation of financial exclusion or the risk of it. Its portfoliois made up of financial products and services specially designed to meet the needsof entrepreneurs, microenterprises, people and families. While its specialty ismicrocredits, MicroBank offers its customers a wide range of basic financialproducts, such as accounts, cards and other services.

Find out more at:

> www.microbank.com/conocemicrobank/quienessomos/nuestramision_en.html

CASE STUDY:ZWEITE SPARKASSE (AUSTRIA)

The bank for the people without a bank

The savings bank offers financial services topeople who cannot find any other partner tohelp them take their financial lives into theirown hands. With more than 400 volunteers,Zweite Sparkasse provides support to

approximately 8,000 customers through Austria. The sole aim of Zweite Sparkasseadvisors is to assist customers in coping with their personal financial crisis.Zweite Sparkasse is considered a branch pioneer. Only comprehensive advisoryservices, offered by volunteers and cooperation with counseling organisations,will allow the customers of Zweite Sparkasse to stabilize their financial situationsustainably and return to a normal banking relationship.

Discover at:

> www.sparkasse.at/diezweitesparkasse

or at:

> www.erstestiftung.org/zweite-sparkasse/files/2011/06/Booklet_ENG_2011.pdf

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CASE STUDY:CECA MEMBERS AND SOCIALHOUSING (SPAIN)

The economic crisis in Spain has resulted in highunemployment rates, which has led to a situationwhere many people have experienced economichardship and some even have lost their homes. Giventheir commitment to society, CECA members have reacted to this by implementinga range of financial and social measures, facilitating access to citizens to a home.

More information can be found at the CECA Microsite:

> www.ceca.es/rsc/bp-accion-social.php

CASE STUDY:PARCOURS CONFIANCE (FRANCE)

Savings Banks in France: Microcredit programme"Parcours Confiance"

French Savings Banks program “Parcours Confiance”(Translated “Fresh Start” in English) was launched toprevent financial exclusion through microfinance. Theprogramme aims to help customers suffering frompersonal and financial problems to have a betterunderstanding of banking products and services andcan provide the beneficiaries with microloans withoutcollateral and at an affordable cost. The "Parcours Confiance” programme is builtin close collaboration with different associations such as the French Red Cross,Restos du Coeur, and other institutional associations to meet the expectations ofcustomers suffering from personal and financial vulnerability. Each year, more than4,000 personal microloans are granted, and more than 1,000 business microcredits(in partnership with France Active). Caisses d’Epargne are the first provider ofpersonal microcredit in France, and one of the leaders in business microcredit.

Learn more at:

> https://parcoursconfiance.wordpress.com

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CASE STUDY:SÖRMLANDS SPARBANK AND“YOUNG ENTREPRENEUR” (SWEDEN)

Sörmlands Sparbank is a Swedish local savings bankcovering about 120,000 inhabitants in its region.Young Entrepreneur started in 2010 and has beenrunning ever since. Young people aged 16-25 starttheir own small business over three summer months.A maximum of 60 young entrepreneurs participate each year in the program, andin total they have had about 240 participants. Results show 30% of all participantshave chosen to restart their business as real companies at the end of the program.Having more companies in the region is beneficial for all inhabitants, which in turnalso benefits the local savings bank.

Learn more at:

> https://www.sormlandssparbank.se/Skickar-vidare/Tillvaxt/Ung-Entreprenor

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ESBG Members

n Banka Kombetare Tregtare, Albanian Austrian Savings Banks Association, Austrian Coordination of the Belgian Savings and Network Banks, Belgiumn Ceska Sporitelna AS, Czech Republicn Lokale Pengeinstitutter, Denmarkn Savings Banks Union Coop, Finlandn Groupe BPCE, Francen Fédération Nationale des Caisses d'Epargne, Francen German Savings Banks Association, Germanyn OTP Bank Nyrt., Hungaryn Icelandic Savings Banks Association, Icelandn Association of Italian foundations and savings banks, Italyn Banque et Caisse d'Epargne de l'Etat, Luxembourgn Bank of Valletta Group, Maltan SNS Bank, Netherlandsn Finance Norway, Norwayn Caixa Geral de Depósitos, Portugaln Montepio, Portugaln Slovenska Sporitelna AS, Slovakian Caixabank, Spainn Cecabank, Spainn Swedish National Savings Banks Organisation, Swedenn Swedbank, Swedenn Lloyds Banking Group, United Kingdom

ESBG – The Voice of Savings and Retail Banking in Europe

ESBG brings together nearly 1000 savings and retail banks in 20 European countriesthat believe in a common identity for European policies. ESBG members represent one ofthe largest European retail banking networks, comprising one-third of the retail bankingmarket in Europe, with 190 million customers, more than 60,000 outlets, total assetsof €7.1 trillion, non-bank deposits of €3.5 trillion, and non-bank loans of €3.7 trillion.ESBG members come together to agree on and promote common positions on relevantregulatory or supervisory matters.

Learn more about ESBG at > www.wsbi-esbg.org

Additional case studies on responsible practice from ESBG members that complementthe ESBG Charter for Responsible Business can be found in the WSBI-ESBG CSR databaseat > www.savings-banks-events.org/csr

Learn more about the ESBG Charter for Responsible Business at

> www.wsbi-esbg.org/Our%20Positions/csr/Pages/ESBG-Charter-for-Responsible-Business.aspx

ESBGRue Marie-Thérèse, 11 n B-1000 Brussels n Tel: +32 2 211 11 11 n Fax: +32 2 211 11 99info@wsbi-esbg.org n www.wsbi-esbg.org

Published by ESBG. © November 2016