Abstract

The recent trends on the European banking sector as well as the recent reform in Italy stimulate a concentration phase among small and medium banks. The system of Cooperative Banks is not new to this phenomenon but the increasing attention on the risk of bank assets (i.e. nonperforming loans in particular) opens new debate on the potential gains from a consolidation of Cooperative Banks. We propose a new application of an existing methodology for the efficiency analysis of the Italian regional banking systems, and we also include nonperforming loans as detrimental factor of performance. The computed efficiency scores show that, in the geographical areas where CCB are smaller or less diffused, inefficiencies are higher and also a formal hypothesis testing confirm such evidence.