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    Corporate governance

    Capital structure and liability

    Capital structure

    Raiffeisen's cooperative model is geared towards the retention of earnings. This means that – with the exception of interest on cooperative shares – net profit is not paid out in dividends, but is instead channelled into the Raiffeisen banks' reserves in order to strengthen the capital base. The Raiffeisen Group's cooperative capital is CHF 2,692 million. ­ A precise breakdown and accounting of changes in the year under review are provided in note 16 of the consolidated annual financial statements.

    The net profit is not distributed, rather it is used to strengthen the capital base of the Raiffeisen banks.

    Changes in equity capital

    Resigning cooperative members have the right to redeem their share certificates at their intrinsic value, up to a maximum of their par value. The Board of Directors may refuse to redeem share certificates at any time and without giving reasons. Share certificates bear interest at a maximum rate of 6%.

    Equity capital
    in CHF million2018201920202021
    Cooperative capital2,1722,3512,5192,692
    Retained earnings13,61114,09214,86415,218
    Reserves for general banking risks200200200200
    Group profit5418358611,069
    Total Equity capital16,52417,47818,44419,179

    Liability

    The Raiffeisen Group guarantees its financial obligations through a balanced system of security measures based on mutual liability, set out in its Articles of Association. Working together in a cooperative union is also a strong expression of solidarity, as the Raiffeisen banks are closely linked as a risk-sharing group. Along with the solidarity fund, Raiffeisen Switzerland is also able to cover claims and operating losses beyond what the individual members could afford.

    The cooperative union is a strong risk-sharing group based on the principle of solidarity.

    Liability of Raiffeisen Switzerland towards the Raiffeisen banks

    In its capacity as principal party, Raiffeisen Switzerland guarantees the liabilities of all Raiffeisen banks. A total of CHF 2.7 billion in equity capital of Raiffeisen Switzerland is available for this purpose. Under the Articles of Association of Raiffeisen Switzerland, the Raiffeisen banks must acquire a share certificate worth CHF 1,000 for every CHF 100,000 of total assets that they hold. This corresponds to a call-in obligation towards Raiffeisen Switzerland of CHF 2.38 billion, of which CHF 1.63 billion has been paid in. Raiffeisen Switzerland has the right to call in the outstanding CHF 0.75 billion payment obligation from the Raiffeisen banks at any time.

    Solidarity fund

    The solidarity fund – in line with the cooperative notion of solidarity that Raiffeisen espouses – is an organisation-wide reserve to cover risks. The fund mainly covers operating losses of Raiffeisen banks. It is financed by contributions from the Raiffeisen banks and the branches of Raiffeisen Switzerland. The disposable fund assets as at 31 December 2021 amount to CHF 339.1 million.

    Duty of the Raiffeisen banks to pay further capital to Raiffeisen Switzerland

    Under Article 871 of the Swiss Code of Obligations, the Raiffeisen banks are bound by the duty to pay in further capital up to the amount of their own funds, defined as the disclosed equity capital plus hidden reserves. The duty of the Raiffeisen banks to pay in further capital to Raiffeisen Switzerland amounts to CHF 18.9 billion.

    Directive authority of Raiffeisen Switzerland vis-à-vis the Raiffeisen banks

    According to a FINMA ruling of 3 September 2010, the Raiffeisen Group must comply with the statutory provisions on capital adequacy, risk diversification and liquidity on a consolidated basis. The Raiffeisen banks are exempt from compliance with these provisions at the individual bank level. The conditions for this exemption are that the Raiffeisen banks must join together with Raiffeisen Switzerland, which guarantees all the Raiffeisen banks' obligations, and must grant Raiffeisen Switzerland power to exercise directive authority vis-à-vis the Raiffeisen banks. Raiffeisen Switzerland monitors the Raiffeisen banks' overall position on an ongoing basis, specifically with regard to capital adequacy, earnings, liquidity and risk diversification. If an unfavourable development occurs or is expected at a Raiffeisen bank, Raiffeisen Switzerland assists in drawing up and implementing appropriate measures. In serious cases, Raiffeisen Switzerland has a right of application and directive authority in respect of organisational, operational and HR-related steps.

    Major cooperative members

    Cooperative members must hold at least one share certificate. If so resolved by the Board of Directors of the respective Raiffeisen bank, cooperative members can also subscribe for more than one share certificate, but only up to 10% of the cooperative capital or CHF 20,000 per cooperative member. Under the Swiss Code of Obligations, the voting rights of any one cooperative member are limited to one vote, irrespective of the number of share certificates held. In accordance with this, there are no major cooperative members in the Raiffeisen Group which hold more than 5% of the capital or voting rights. Membership of a Raiffeisen bank and the associated rights and obligations are closely tied to the individual/entity in question. This means that individual shares cannot normally be sold on or transferred. A member can nominate another member, their spouse or a descendant to represent them. No authorised person may represent more than one member. They must have written authorisation. Representatives of limited partnerships, collective associations or legal entities also require written authorisation.

    Voting rights of any one cooperative member are limited to one vote.