Vol. 11 No. 4 (2025)
December

Articles

Employment and branch network effects on the efficiency of Polish cooperative banks

Published 2025-12-29

  • Mateusz Folwarski
    • ,
  • Michał Boda
    • ,
  • Bartłomiej Balawejder

Mateusz Folwarski
Krakow University of Economics

Michał Boda
Krakow University of Economics

Bartłomiej Balawejder
Krakow University of Economics

Abstract

Objective: The article aims to evaluate the influence of the employment structure and branch network on the capability of large cooperative banks in Poland (possessing assets exceeding PLN 1 billion) to sustain an optimal equilibrium between operational efficiency and liquidity. This article also seeks to identify the causes for the declining efficiency of cooperative banks in Poland in recent years and to evaluate the possibility of implementing solutions to enhance this efficiency.

Research Design & Methods: We used static panel models with data suitable for unit and time series analysis. The sample consisted of large cooperative banks operating in Poland (assets over 1 billion PLN). Statistical analysis involved diagnostic tests, collinearity analysis via VIF, and winsorisation at the first percentile to reduce outlier impact. We used Driscoll-Kraay standard errors to estimate the panel model.

Findings: We established that a high number of employees in a cooperative bank can negatively affect the return on assets (ROA) and lead to an increase in the cost-to-income (CtI) ratio. Similarly, an extensive branch network can lead to a decrease in the efficiency of assets used (ROA) and an increase in the CtI ratio. On the other hand, a higher bank’s total assets-to-employee ratio is associated with a lower CtI ratio, suggesting improved cost efficiency. Moreover, banks with higher assets per branch achieve higher profitability (higher ROA) and better cost efficiency (lower CtI).

Implications & Recommendations: The results of our study imply that optimising the staffing structure and branch network is crucial to achieve a balance between profitability and cost efficiency in cooperative banks. The solution to the problem could be employment restructuring, the implementation of process automation technologies, precise staff planning, and investment in the development of employee competence. We also suggest optimising costs related to the branch network, implementing modern technologies, and performing operational restructuring. Cooperative banks should strive to increase the efficiency of asset allocation.

Contribution & Value Added: The article comprehensively analyses of impact of the employment structure and the branch network on the efficiency and liquidity of large cooperative banks, which complements previous research focusing mainly on financial aspects. We provided empirical evidence of the complex nature of the relationship between organisational factors and the financial performance of cooperative banks in Poland.

Keywords

cooperative banks, efficiency, liquidity, employment, branch network

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Author Biography

Mateusz Folwarski

Mateusz Folwarski, PhD, professor at UEK, research and teaching associate in the Department of Banking and Global Financial System at the Krakow University of Economics. His research interests include cooperative banking, FinTech innovations.

Michał Boda

Michał Boda, Ph.D., Research and Teaching Assistant Professor in the Department of Banking and Global Financial System at the Krakow University of Economics. His research interests include banking, risk management, and mortgage loans.

Bartłomiej Balawejder

Bartłomiej Balawejder, MA, Research and Teaching Assistant in the Department of Banking and Global Financial System at the Krakow University of Economics. His research interests include banking, risk management, mortgage loans and international finance.

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