[OccupyComms] The Banker Wards 2011 - I've got the award winners, checked and verified online by me - please send on to who ever this could be useful to

[Andy Cropper (personal email)]

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Part 1 Country winners -  http://www.thebanker.com/Awards/THE-BANKER-AWARDS2/The-Banker-Awards-2011-Country-winners

Part 2 Global and regional winners - http://www.thebanker.com/Awards/THE-BANKER-AWARDS2/The-Banker-Awards-2011-Global-and-regional-winnersverified 









Part1 - Country winners- country winners - http://www.thebanker.com/Awards/THE-BANKER-AWARDS2/The-Banker-Awards-2011-Country-winners


The Banker Awards 2011Awarded by Michael Burke at 6pm,  30th November 2011 at Intercontinental Hotel, Park Lane, London 


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The Banker’s panel of judges celebrates the best banks in 147  different countries based on their performances over the past year.
 
Afghanistan
Standard Chartered Bank Afghanistan
Afghanistan presents a unique set of challenges to Standard  Chartered, which draws on its international expertise to deliver  services and solutions to this war-torn country.
The emphasis of  the bank has been to support the reconstruction and development in  Afghanistan by providing the donor community, diplomatic missions and  the government of Afghanistan with the banking services they need.
Security  issues and political turmoil have been a feature of the market in  Afghanistan and Standard Chartered Bank Afghanistan has now set up its  Business Continuity Plan so that its customer service can continue even  if there is a disruptive incident. In the midst of such a challenging  environment, the bank has done well to achieve growth in its figures for  Tier 1 capital, assets and net profits, even though the numbers are  small when compared to the performance of banks in other more stable  markets around the world.
In 2010 the bank’s Tier 1 capital  increased by 13.97% to $13.3m, from $11.67m in 2009, while its assets  increased 8.46% to $219m from $202m in the same period. And Standard  Chartered Bank Afghanistan’s net profits increased by 1.36% to $5.2m in  2010 from $5.12m in 2009.
Know-Your-Customer and Anti-Money  Laundering procedures continue to be of the utmost concern for the bank  because of the rampant opium trade in Afghanistan. This is just one of  the challenges of working in the country, which has other difficulties  such as the threat of terror, crime, weak governance and a weak  judiciary and legislature.
The bank has been working toward  improving the way it works in Afghanistan, and one of its initiatives  has been to partner with the country’s regulator and set up the  Afghanistan Institute of Banking and Finance. The two are aiming to  strengthen the private sector banking regulatory framework and establish  high standards of governance and service delivery.
Albania
Banka Kombetare Tregtare
 
 
 
A winner for the second year in a row, Turkish-owned Banka Kombetare  Tregtare (BKT) has maintained its impressive course through the downturn  that occurred in Albania in 2009. As economic growth recovered, BKT  doubled its return on equity to 25% in 2010. And asset quality has also  improved dramatically, with non-performing loans falling from 8% at the  end of 2010 to 6% by June 2011, compared with an average of 15% in the  Albanian banking system as a whole.
“The main challenge for us has  been to maintain profitability and growth in an increasingly difficult  environment, where crisis management has become [part of the] daily  routine. In Albania, [where] one-third of the population works in Greece  and Italy and in whose banking system these countries have a  considerable weight, it is imperative that we have abundant liquidity  for any eventuality, which makes profitability all the more difficult,”  says Seyhan Pencabligil, chief executive of BKT.
BKT’s stability  has made it the bank of choice for important official lending  initiatives, for instance as the sole winner of a tender to work with  Albania’s Ministry of Finance in developing the local mortgage market,  and a Ministry of Agriculture programme to support agribusiness. BKT’s  small business banking franchise also won backing from the European Fund  for South-east Europe. In addition, the bank has become the first in  Albania to offer instalment repayments on its credit cards, and utility  bill payments through the internet.
“We have grown organically for  more than a decade, at an annualised rate of 27%. In the next year or  two, we may consider some merger and acquisition activity to consolidate  our position in the region,” says Mr Pencabligil.
Andorra
MoraBanc
MoraBanc scores better than average among its Andorran banking  sector peers in most key ratios. Return on equity is 18.8%, cost to  income is 35.5% and non-performing loans are 1.48%. The bank achieved a  healthy capital ratio of 29.3% and maintained its Moody’s rating.
During  the past year one of the main challenges for MoraBanc has been to  continue to strengthen its solvency and liquidity positions in an  uncertain environment. “This entity’s solvency and its conservative and  careful management of the balance sheet have been the key factors for  continuing to generate significant profits,” said Gilles Serra, recently  appointed CEO of MoraBanc.
The bank has made major investments in  technology with the implementation of a Murex platform. This will  improve risk management and trading and help the bank to offer customers  tailor-made products in accordance with the customer’s risk profile.
An  asset and liability programme has also been undertaken and  international expansion continues, with upgraded operations in Zurich  and Miami.
Next year, the bank will celebrate its 60th  anniversary and a monetary agreement with the EU and double taxation  treaties will come into force. “These will provide us with new  opportunities in terms of markets, financial activities, diversification  and international development,” says Mr Serra.
The bank is very  committed to its small and medium-sized enterprise (SME) customers and  has geared its services towards their special needs in terms of tax  advice and credits. The result is that the segment has grown by 17.6% in  the three years since the creation of its dedicated SME service.
Angola
 
Banco Millennium Angola
 
 
 
 
José Reino da Costa, BMA’s chief executive
Angola has one of the world’s fastest expanding economies, thanks to  its production of 2 million barrels of oil a day. But despite this  growth, its economy remains unsophisticated and undiversified.
Banks  are key to aiding the development of the non-oil sector. Banco  Millennium Angola (BMA), controlled by Portugal’s Millennium BCP, has  been at the forefront of attempts to achieve this. In particular, it has  focused on getting more of the country’s population, particularly those  outside the capital Luanda, into the banking system.
It has  opened several branches in 2011 and expects to have 63 in total by the  end of it, having started the year with 39. It has also launched several  financial products, including ones targeting university students, women  and small businesses. And it recently became the first bank in the  country to open branches on Saturdays.
BMA has managed its quick  growth — net profits rose 63% to $33m in 2010 — carefully. Its  cost-to-income ratio fell from 72% in 2008 to 53% in 2010, while its  non-performing loans ratio stood at just 1.9% at the end of 2010.
“For  2012 we will target the microfinance segment, launching a specific loan  to support small entrepreneurs,” says José Reino da Costa, BMA’s chief  executive. He adds that the bank will introduce mobile phone banking  soon.
Antigua and Barbuda
 
Scotiabank Antigua
 
 
 
 
Marlon Rawlins, country manager, Scotiabank Antigua
Antigua and Barbuda’s tourism-based economy has been badly hit by  significantly lower numbers of visitors over the past few years. Despite  this difficult environment, Scotiabank Antigua closed 2010 with growing  net profits, after a decline in 2009.
While many businesses  struggled during the economic downturn, Scotiabank reiterated its  commitment to its retail and corporate clients. It launched a campaign  to reduce interest rates on retail loans and other retail products and  tailored some of its corporate products to the small businesses segment.  Advice on how to write a business plan, cash-flow management and a  training programme were services included in this initiative.
In  order to contain the level of non-performing loans (NPLs), Scotiabank  Antigua provided payment alternatives to customers struggling to meet  their obligations by allowing payment deferrals or restructuring their  debt. This helped the bank keep its NPLs comfortably below 3% of the  loan book.
“Like most economies in the world, Antigua was affected  by the global economic downturn which negatively affected our major  productive sectors: tourism and construction,” says Scotiabank Antigua  country manager Marlon Rawlins.
“This resulted in increased  delinquency and low demand for loans in the banking sector which  impacted our ability to grow. Managing through such difficult times was a  challenge. It required twice the effort to achieve the same results and  [an] understanding [of] how to deliver greater results with fewer  resources.”
Argentina
Santander Rio
Argentine banks enjoyed a record year in 2010, and Santander Rio  secured an impressive return on equity of more than 40% and a 36% net  profit growth. The bank owns almost 10% of Argentina’s private sector  loans market and its private sector deposits markets, the highest share  of any bank in the country.
Santander Rio has focused on  developing its transaction banking services, which has helped to sustain  a high level of current account deposits and, therefore, a substantial  low-cost funding source for the bank.
Santander’s mobile banking  strategy has also paid off, and a new platform has attracted a  significantly higher number of customers and transactions, while the  existing internet banking system continued to channel high numbers of  transactions.
Commitment to existing small businesses clients was  showed by higher loan amount limits, while the bank designed an account  for new small and medium-sized enterprise (SME) clients that would be  set up easily and quickly but that would still give access to the full  product range available. Further, the bank improved its credit scoring  system to better analyse small businesses risk and in an effort to  support the growth of SMEs during tougher economic times, Santander Rio  made available medium-term loans at lower rates for the financing of  certain business investments.
Santander Rio has steadily grown  over the past few years and it has ambitious plans for the future too.  The branch network has increased this year into areas related to  agricultural activities and industries that trade with Brazil, and the  plan is to continue this expansion over the next two years.
Armenia
HSBC Bank Armenia
As Armenia’s economy recovered in 2010, HSBC harnessed the  improved environment particularly well, growing profits by more than  180%. Even with a capital injection of $8m to continue expanding its  business while meeting new capital rules in Armenia, the bank generated  the country’s highest return on equity, at 22.7%.
“The main  challenge was to continue to find new profitable business with an  acceptable risk profile against the backdrop of the large number of  local banks competing aggressively in our small market, the more  stringent regulatory requirements, particularly for capital adequacy and  liquidity, and the increasingly uncertain outlook for the global  economy,” says Astrid Clifford, chief executive of HSBC Bank Armenia.
The  bank’s profits for 2011 are on course to rise a further 60% on the back  of declining loan delinquencies that are allowing lower impairment  charges, and rapid growth in interest income. The corporate loan  portfolio in particular is the fastest growing in Armenia. Helped by a  $1m IT upgrade, corporate customers have 24-hour access to funds via the  country’s largest ATM network, and 63% of non-cash transactions by the  bank’s corporate clients are now conducted online. With China now one of  Armenia’s largest trading partners, HSBC also introduced cross-border  trade and settlement accounts in renminbi into the country for the first  time.
In the coming year, HSBC Armenia is planning to expand its  branch network in the country’s capital, Yerevan. Its new products and  services are likely to focus on internationally minded retail and  commercial customers.
“Opportunities include the Armenian  diaspora and increased international trade – both areas where HSBC has a  right to win business – as well as the growing demand for insurance  products and ongoing pension reform,” says Ms Clifford.
Australia
 
Westpac
 
 
 
Westpac has performed well over the past year and despite it being a  challenging year, the bank has delivered solid growth in earnings.
In  2010 the bank saw an increase on its net profit of 84.2% to A$6.35bn  ($6.25bn), compared with A$3.45bn in 2009. For the six months up until  the end of March 2011, the strong performance continued with a net  profit growth of 37.7% to A$3,961m, compared to the same period a year  earlier.
“The past year has been an important one for us, having  delivered solid growth in earnings and good progress on our strategic  agenda,” says Gail Kelly, CEO of Westpac Banking Corporation.
Ms  Kelly points to the major achievements of the bank in recent months: “We  have further deepened relationships with our customers right across the  Westpac Group, with stronger cross-sell in both wealth and insurance.”
She  also notes that the bank has further developed its multi-brand model  with the launch of a new brand – the Bank of Melbourne – which is a  local bank for the people living in the city.
“And we’ve reached  the half-way point in our major technology investment programme  delivering benefits for the group and a better experience for  customers,” says Ms Kelly.
This year also marked the third  anniversary of Westpac’s integration and merger with St George Bank. “It  has been very successfully executed, with net growth in customers and  delivering synergies well ahead of initial expectations. It has also  assisted in making the entire group more customer-centric,” says Ms  Kelly.
Azerbaijan
Access Bank
A sharp fall in real estate markets plunged many of Azerbaijan’s  banks into loss in 2010 on the back of steep rises in non-performing  loans (NPLs). But Access Bank, which specialises in microfinance and the  agricultural sector and is run according to best practice laid down by  its multilateral owners and experienced managers, strengthened its  position.
Profits were up 32%, while NPLs were just 1%. And that  is using Access Bank’s own definition, which includes the total value of  all loans with any arrears of more than 30 days – a far tougher measure  than that used by any other bank in the market.
“By maintaining  industry-leading portfolio quality we minimised losses to write-offs,  thus generating industry-leading profitability of more than 50% return  on average equity in 2010,” says Access Bank chief executive Andrew  Pospielovsky.
Many banks stepped back from new lending altogether,  giving Access the opportunity to acquire quality clients and increasing  its importance in helping to diversify Azerbaijan’s economy beyond the  oil and gas sector. But it continues to do so based on the same high  standards, with staff remuneration tied to the performance of the loans  that they originate. At the same time, the bank’s balance sheet strength  and safe-haven status prompted a massive inflow of deposits, which grew  more than six-fold between 2008 and May 2011.
“We see  opportunity in responsible banking – by striving to ensure that every  product we provide to every client is appropriate for and benefits that  client, we will build stronger client relations and a superior quality  portfolio. Superior portfolio quality means we are not over-indebting  our clients and generates superior profitability,” says Mr Pospielovsky.
Bahamas
 
Bank of the Bahamas
 
 
 
The Bank of the Bahamas has remained in good shape through the  current troubled economic climate: its profits increased and so did its  return-on-equity ratio.
As with the rest of the Caribbean, the  Bahamas’ tourism and construction sectors have been struggling but Bank  of the Bahamas continued lending to corporate customers – which in the  region are mostly small and medium-sized businesses. Corporate products  ranged from acquisition financing to loans financing the construction of  new buildings for the expansion of entertainment, restoration and  household retail businesses. The bank’s commercial loans portfolio grew  by 8.4% from the previous year.
Among the new initiatives to  sustain growth, there was a campaign to encourage young people to use  banking products and create savings accounts that could be opened with  as little as $10 and which pay higher interest rates than traditional  accounts.
On the technology front, investments from previous  years have paid off and routine data entry processes were successfully  automated, keeping costs down. Further, credit-card processing was  brought in house with a view to reducing costs and building a system  that can offer this service to other institutions – namely to The
Bahamas’s  National Insurance Board, the bank’s main shareholder – something that  would significantly boost Bank of Bahamas’s future revenues.
Bahrain
 
Ahli United Bank
 
 
 
Despite the volatile global economic backdrop, Ahli United Bank (AUB)  continued to grow its business on several fronts and produce successful  results in 2010. The bank achieved a net profit of $265.5m in 2010, a  32% increase over 2009, as well as growing its assets by 12.2% to  $26.46bn and its return on equity from 9.6% to 12%.
Most notably,  AUB remained firmly committed to its vision of being a truly regional  bank in the Middle East. This was evident through the bank’s highly  impressive geographic expansion, which saw it increase its stake in both  Commercial Bank of Iraq from 49% to 59%, and in AUB Egypt from 35.3% to  85.1%. It also acquired a 40% stake in Libya’s United Bank of Commerce  and Investment with the aim of capturing trade flows between Egypt and  Libya.
AUB has a presence in seven countries in the Middle East,  as well as in the UK, through which it serves 570,000 clients through  its 131-branch network.   
AUB undertook various initiatives  during 2010 to diversify and grow its business model. Based on an  in-depth Kuwaiti banking market analysis, the bank’s Kuwaiti subsidiary  Ahli United Bank Kuwait was fully converted from a conventional to  Islamic bank in April 2010.  
On the retail front, following the  launch of a savings prize draw scheme, AUB’s deposits grew from $702m in  2009 to $930m in 2010.  
Through its joint venture with the  UK-based Legal & General group, AUB launched a range of  bancassurance products. The products have now been rolled out in Bahrain  and Kuwait.   
“Looking forward, we expect corporate banking to  continue growing at a moderate overall pace,” says Adel El-Labban, group  chief executive and managing director of Ahli United Bank.  “Infrastructure and contra-cyclical sectors are expected to post healthy  growth and represent priority targets.”
Bangladesh
 
Janata Bank
 
 
 
Janata Bank defines itself as a bank of the people, and much of its  focus over the past year has been consistent with that description.
The  bank is 100% government-owned and has recently faced the challenge of  retaining customers’ confidence, largely due to the marketing efforts of  the private banks in Bangladesh.
Janata Bank’s key activities in  the last year include funding rural infrastructure, increasing  financing in the agriculture sector, partnering with non-governmental  organisations, working with solar power generation, and financing  bio-fertiliser and bio-gas projects. The bank has also opened more  branches in rural areas, and has worked on projects that aim to  alleviate poverty.
“As a market leader we have introduced the  poorest section of people to banking services,” says S M Aminur Rahman,  CEO and managing director of Janata Bank.
He adds that one of the  major achievements over the past year for the bank was to maintain the  upward trend of the bank’s business indicators – such as profitability –  even in a difficult environment that is impacted by the ongoing global  financial turmoil. The difficulties in such times include keeping  non-performing loan (NPL) ratios to an internationally accepted level,  says Mr Rahman. Janata Bank’s NPLs have reduced from 8.7% in 2009 to  5.3% in 2010.
Aside from profitability, the bank also emphasises  the importance of social and corporate responsibility, and cites the  examples of its work in the disaster-prone areas in the south of the  country and the hunger-stricken areas in the north.
Barbados
 
CIBC FirstCaribbean International Bank
 
 
 
 
Douglas Parkhill, chief executive, CIBC FirstCaribbean International Bank
In a difficult economic environment marked by declining profitability  in the wider banking market, CIBC FirstCaribbean International Bank  managed to close 2010 with a net profit similar to what it achieved in  2009, and with much lower levels of non-performing loans (NPLs).
This  was the result of an enterprise-wide strategy that reviewed all NPLs  and high-risk loans so that more detailed risk analysis was provided  internally, while the bank also committed itself to giving better advice  to customers on debt restructuring and additional financial support  when needed.
Despite the tough market conditions, CIBC  FirstCaribbean continued to invest in innovative products. It launched  mobile banking services, a new debit card and improved its internet  banking offering, which included a facility to write electronic cheques  for corporate clients. Such investments are already reaping rewards with  the bank recording a reduction in cheque cashing activity and related  operational costs, as well as an increase in sales activity thanks to  its new and improved channels.
“Despite continuing difficulties  in the world economy, which has in turn affected our region, CIBC  FirstCaribbean has been able to maintain a strong core business,” says  chief executive Douglas Parkhill. “We have been engaging in prudent risk  management, not only to protect ourselves, but also to assist our  clients in managing their exposure. We believe that when the good times  return our clients will remember who worked alongside them to ride out  the storm.”
Belarus
 
Priorbank
 
 
 
 
Sergey Kostyuchenko, chief executive, Priorbank
The past year has been a deeply troubled one for the Belarus economy,  with a balance-of-payments crisis that resulted in two  maxi-devaluations in May and October 2011 that wiped almost two-thirds  off the official value of the Belarus ruble in total, and pushed  inflation to more than 90%. At the same time, a budget crisis cast doubt  on the financial position of the country’s largest banks, most of which  are state-owned and have lent heavily to the government and state-owned  industries.
By contrast, Raiffeisen Bank International’s Belarus  subsidiary Priorbank has so far weathered the storm, recording a profit  of E47m in the first half of 2011. This was partly thanks to a strategic  currency hedge position, but a non-performing loan ratio of just 2.4%  as of mid-2011 also indicates the bank’s very conservative risk  management. Public confidence in its strength and stability allowed  Priorbank’s share of the deposit market to rise from 6.3% to 7.1% in  2010.
“Priorbank was better prepared for this situation than the  other Belarusian banks, and this is a result of the years of work to  create a reliable, dynamic and financially sustainable financial  institution. The centralised customer-oriented system of management  allows Priorbank to resist the negative factors of the economy of the  country and provide all necessary financial support to its customers,”  says chief executive Sergey Kostyuchenko.
The bank’s priority now  is to minimise the impact of the economic crisis, with a particular  focus on large privately owned and multinational companies operating in  Belarus. Mr Kostyuchenko says there is some restructuring work to do, in  particular converting foreign currency loans to the private sector into  Belarus rubles. In view of the difficult environment for lending, the  bank is also aiming to develop non-credit products such as  cash-management, factoring, corporate bond trading and investment  banking.
Belgium
 
BNP Paribas Fortis
 
 
 
 
Max Jadot, CEO and chairman, BNP Paribas Fortis’s executive board
Following its takeover by BNP Paribas in 2009, Belgium’s BNP Paribas  Fortis has come back with a vengeance. The integration went ahead in  2010, and the bank used it as an opportunity to roll out new products  and services for its customers. It delivered a consolidated profit  before discontinued operations of E1.18bn, while its cost-to-income  ratio was 76.7% and its non-performing loan ratio was 2.51%.
In  the product sphere, BNP Paribas Fortis became the first large bank in  Belgium to launch mobile banking, a move designed to keep pace with  customers who want the freedom to do banking anywhere at anytime. There  was a rebranding of more than 1000 branches in Belgium and the  widespread conversion to open architecture to enhance the customer  experience.
On the business side, there was the integration of  the European network of business centres within BNP Paribas, and the  rollout of its Corporate & Transaction Banking Europe (CTBE) in  Brussels as a hub for the entire group.
On the wealth management  side, 36 new centres opened in Belgium and new and improved websites  were launched for retail banking, private banking and corporate and  public banking clients. Internationally, the bank opened ‘Belgian desks’  in China, India, Hong Kong and the US.
“The operational numbers  in terms of intake of deposits and providing loans increased, giving BNP  Paribas Fortis further possibility to support the [Belgian] economy in a  difficult environment. A client satisfaction survey showed continued  progress. Our liquidity and solvency ratios remain above the requested  levels,” says Max Jadot, CEO and chairman of BNP Paribas Fortis’s  executive board.
Belize
Scotiabank (Belize)
With flat economic growth in 2010 and limited expectations for  2011, things have not been easy in Belize. On top of the international  effects of the financial crisis and subsequent economic troubles in the  US and Europe, additional issues afflicted the country.
Earlier  this year, Belize’s government put a temporary halt to offshore oil  exploration concessions, following environmentalists’ concerns after the  BP oil spills in the Gulf of Mexico, a move which substantially reduced  the country’s immediate economic prospects.
Operating in such a  low-growth environment is not easy for any type of business, and  Scotiabank (Belize) is well aware of this. “Our main challenge over the  past year was addressing a higher-than-normal delinquency portfolio and  an increase in the number and balances of non-performing loans,” says  Patrick Andrews, vice-president and managing director at Scotiabank  (Belize). “Remaining profitable in a competitive and challenging local  environment… required prudent expense management and control as well as  the optimising interest revenue opportunities.”
Scotiabank’s  non-performing loans did rise from 3.79% in 2009 to 5.6% in 2010, but  despite the many challenges the bank had to face, it managed to close  the financial year with similar level of net profits as the previous  year and provided investors with a healthy return-on-equity ratio of  19%. There was a focus on improving operational efficiency and a number  of processing activities were moved to a centralised regional hub.  Investments in technology improved the speed and reliability of systems  and allowed the introduction of telephone and mobile phone banking.
Benin
 
Bank of Africa
 
 
 
 
Cheikh Tidiane Ndiaye, managing director, Bank of Africa
Bank of Africa Benin has faced tough conditions since the onset of  economic slowdown in 2010, which saw the country’s annual growth fall to  2.1%, low by the standards of sub-Saharan Africa.
Despite this,  the lender – the biggest commercial bank in Benin and the only company  from the country to be listed on the BVRM, the regional stock exchange –  has managed itself well. In 2010, its assets declined by almost 1% to  CFA Fr487bn ($990m). But its net profits of CFA Fr6.6bn – almost the  same as the year before – amounted to a return on equity of 14%. Its  Tier 1 capital, moreover, was raised significantly by 27% to reach CFA  Fr37bn, leaving it with a much stronger capital buffer.
Bank of  Africa’s non-performing loans in Benin are a problem, amounting to just  over 10% of its portfolio at the end of last year. But it has kept  expenses under control and had a cost-to-income ratio of just 45% in  2010.
Bank of Africa has focused heavily on raising deposits in  the past year. It has managed to increase its market share of them to  about 30%, more than any other bank in Benin.
With regards to  assets, the lender has been trying to bank more small and medium-sized  enterprises (SMEs) in the country. Among its most important moves, it  recently formed partnerships with several development agencies in the  country that guarantee lending by SMEs, including GARI Fund, a regional  organisation, and Germany’s GIZ.
The bank’s managing director,  Cheikh Tidiane Ndiaye, says he is optimistic about an economic recovery  next year. He adds that Bank of Africa will continue to target Benin’s  agricultural sector and also develop its mobile banking service. “We  shall keep our focus on the retail market,” he says. “We shall retain  our leadership position in all performance criteria.”
Bermuda
 
HSBC Bermuda
 
 
 
 
Philip Butterfield, CEO, HSBC Bermuda
Closing the 2010 financial year with improved levels of profits and  growing return on equity, HSBC Bermuda has been active in a challenging  local market. The bank was instrumental in bringing a government bond to  the market, it helped to structure Bermuda’s first public-private  partnership project to build a new hospital, and has helped to export  the country’s know-how in captive insurance to other jurisdictions.
Further,  the bank expanded its captive insurance portfolio, created a new team  to advise clients on various wealth management products, and gave access  to a larger number of clients to its sophisticated online investment  system, previously available to a selected few.
But success in a  large offshore financial jurisdiction cannot only be measured by a  bank’s services to the investment community. HSBC knows this and has  teamed up with a local business association, the Bermuda Small Business  Development Corporation, to promote these companies, which represent the  large majority of the local economy.
The bank maintained a  strong balance sheet, focused on high-quality, liquid investments,  low-risk mortgages and a diversified loan portfolio to try to contain  its growing number of non-performing loans. Its efforts were rewarded by  Standard & Poor’s AA- rating, confirmed from a previous evaluation,  and an improved outlook, which went from ‘negative’ to ‘stable’.
Bolivia
 
Banco Nacional de Bolivia
 
 
 
 
Pablo Bedoya Saenz, chief executive, Banco Nacional de Bolivia
The past year has been tough for all Bolivian banks but Banco  Nacional de Bolivia (BNB) managed to contain declining profits and  pushed non-performing loans down to 1.89%, compared to 2.9% the previous  year. The bank grew its loan portfolio and used a financing line from a  development agency, the Belgian Investment Company for Developing  Country, to develop its small and medium-sized enterprise (SME) business  division, launched a few years earlier.
The bank’s ‘Youth  Banking’ product has proved successful too, and supplied BNB with new  customers and new accounts.“Banca Joven [Youth Banking] has had, and is  still enjoying, unparalleled success in Bolivia,” says chief executive  Pablo Bedoya Saenz. “The aim behind BNB Youth Banking is to introduce  the younger segments of the population to banking [products], and at the  same time capture a whole new client base for the future. Up to now,  tens of thousands of new accounts have been opened by youngsters.”
Talking  of the future, Mr Bedoya Saenz says: “In 2012 and the near future, BNB  will face some of the most pressing issues currently challenging the  national and international banking industry, namely: to improve banking  security, develop better business intelligence tools, expand the  insurance banking business and generate a better working environment for  its [staff]. The best business opportunities in the near future will be  those linked to innovation in payment services, the expansion of the  banking services to a wider segment of the population and to expanding  business with SMEs.”
Bosnia-Herzegovina
 
Intesa Sanpaolo Banka
 
 
 
 
Almir Krkalic, chief executive, Intesa Sanpaolo Banka
Economic conditions in Bosnia-Herzegovina remain tough, but Intesa  Sanpaolo Banka managed to add 74% to its net profits in 2010, partly  thanks to sharply improved cost control. In the same period, the bank’s  cost-to-income ratio fell 5.5 percentage points, helped by a major  internal reorganisation and upgraded electronic banking infrastructure.
“Internal  reorganisation of a complete division was a challenge at a time when  employees are quite reluctant to accept any changes. Precise  measurements and controls of customer satisfaction and the introduction  of new e-learning tools for the education of our employees helps to  continuously improve awareness of the importance of customer  satisfaction,” says Almir Krkalic, Intesa Sanpaolo Banka’s chief  executive.
The bank has also retained a better-quality loan  portfolio than competitors, even with the introduction of business  account overdrafts for small and medium-sized enterprises  (SMEs) and a  20% expansion in its SME loan book in 2010, which accelerated to 22% in  the first five months of 2011.
“The main successes in the past  year pertained to balancing and optimising credit and liquidity risks,  as well as the systematic selection of the sectors of the economy  bearing the lowest risk levels for lending loans but, at the same time,  being the drivers of real economic activity,” says Mr Krkalic.
He  is confident that the bank will continue to reap the benefits of its  adaptability and analytical recognition of which clients and sectors  offer the best prospects. Recent targeted successes include acquiring  younger customers through products such as group debit cards and student  current accounts.
Botswana
 
Stanbic Bank Botswana
 
 
 
 
Leina Gabaraane, head, Stanbic Bank Botswana
Stanbic Bank has spent much of the past year focusing on small and  medium-sized enterprises (SMEs). “While it’s a story that’s hardly  talked about, the SME sector is very dominant in the economy,” says  Leina Gabaraane, head of Stanbic Bank Botswana. “It’s an untapped  market. We said we needed to align ourselves with the sector by  developing the products and services most amenable to it.”
Botswana  is regarded as being one of Africa’s most democratic countries and  among its least corrupt. Its economy is also strong. Propelled by the  extraction of diamonds, its economy is expected to expand about 5.5%  this year in real terms and 7.5% in 2012. But small businesses are seen  as vital for further development, given that they employ far more people  relative to the mining industry.
Stanbic’s push into the SME  market has included the introduction of unsecured lending. This is  important, says Mr Gabaraane, given that many such companies are unable  to post collateral, which usually prevents them from obtaining credit.
 
Stanbic’s SME loan book is expected to expand by about 40% to 50% this  year. This has helped the lender, the country’s fourth largest by assets  and profits, boost its market share. It aims to continue this in 2012.  “We want to be the second or third largest bank in the country in the  next two years,” says Mr Gabaraane.
Stanbic has also been at the forefront of developing Botswana’s private  banking industry. It has done this by targeting the directors and  management of the companies which are its corporate banking clients.  This strategy has seen its average asset book per client climb to  between P180,000 ($24,500) and P250,000.
The bank has maintained a  leading position in the large-scale corporate market, its traditional  strength. It was the lead debt arranger, for example, for the  construction of the 600-watt Morupule B power station, which will enable  Botswana to become self-sufficient in electricity production.
Brazil
Itaú Unibanco
Itaú Unibanco has a huge credit card operation with about 40  million cards in issue. Before the merger of the two banks, these cards  operated on seven different platforms. Now with the integration complete  they are all on the same platform and some 15% of costs have been taken  out of the operation.
It is these kinds of achievements that make  Itaú Unibanco this year’s Brazilian winner. The bank’s return on equity  for 2010 was 21.9% with a cost-to-income ratio of 48.8%. With an  efficiency drive under way, the cost-to-income ratio is down to 46% this  year and the aim is to hit 41% by the end of 2013.
CEO Roberto  Setubal says there is a big emphasis on performing tasks “right first  time” to cut out cumbersome and expensive manual operations needed to  correct errors. From a customer experience point of view, the aim is to  make branches more inviting and for them to act as a relationship  channel as well as a place to carry out transactions.
Mr Setubal  feels that Itaú Unibanco’s strong performance can continue for some  time, as the outlook for Brazilian growth remains positive. “We are very  positive on Brazil. Macroeconomic conditions are good and the country  depends much more on internal demand than external demand, meaning we  are more protected from the international crisis. There is a big  potential to develop credit here.”
One of the keynote transactions  in the past year was the acquisition of 49% of Banco Carrefour, the  Brazilian consumer finance operation of French retailer Carrefour, which  enabled Itaú Unibanco to offer credit cards to millions of new  customers. In the small and medium-sized enterprise area, the loan  portfolio increased by 29% in the year to March 31, 2011. The bank’s  stellar growth seems unlikely to slow any time soon.
Brunei
 
Baiduri Bank
 
 
 
 
Pierre Imhof, chief executive officer at Baiduri Bank
Last year was challenging for Baiduri Bank, but the bank has proved to be resilient to the various market challenges.
Even  though it had higher loan volumes for 2010, intensive competition in  the market has meant that there has been intensive competition on loan  pricing. Also, the bank had to deal with the challenges after the  Monetary Authority of Brunei Darussalam put restrictions on the issuance  of credit and debit cards, which impacted the bank’s credit card  interest income.
“Following the guidelines of directives imposed  by the regulatory authority, which has curtailed consumer spending on  credit cards and limited growth in retail lending, banks in Brunei moved  aggressively into corporate lending and mortgage loans, resulting in  intense competition on pricing,” says Pierre Imhof, chief executive  officer at Baiduri Bank.
Mr Imhof adds that the Baiduri Bank  Group has three main core business areas: corporate banking, retail  banking and consumer financing. “This combination of business lines  provides a high level of sustainability, contributing to strong  recurring earnings year after year. Through a group approach, we  consolidated functions and back-office operations to share resources,”  says Mr Imhof.
For the year ahead, the bank has identified  opportunities for growth in wealth management and mortgage loans. Mr  Imhof says: “We have plans to finance more and more government and oil  and gas-related projects.”
Bulgaria
 
UniCredit Bulbank
 
 
 
 
Levon Hampartzoumian, chief executive, UniCredit Bulbank
Falling profits, shrinking portfolios and rising non-performing loans  (NPLs) characterised the Bulgarian market in 2010, as the European  economic slowdown hit home.
But UniCredit Bulbank has continued  to progress, even if new opportunities are scarce. In particular, an  improved online platform has helped drive a 65% increase in the number  of customers using internet banking.
“UniCredit Bulbank’s strategy  had two main objectives. On the one hand: to remain responsive and  responsible to our customers, providing excellent service and quick  answers to their needs. On the other hand, to perform better than the  market,” says chief executive Levon Hampartzoumian.
In a sign of  its market-leading sophistication, in January 2011 Bulbank became the  first lender in Bulgaria to receive approval to use the sophisticated  internal rating approach to measure its assets under Basel II  regulations. The bank has maintained a leadership position across all  segments, including retail, corporate and investment banking. Bulbank  participated in three major project finance deals, all of which had  backing from the European Bank for Reconstruction and Development.
“There  are a lot of opportunities in Bulgaria in terms of development – in the  area of infrastructure and the utilisation of EU funds. Our focus is  not to be the biggest bank, but the best in terms of service. Of course,  if your service is outstanding, it pays off with more clients and  bigger market share. UniCredit Bulbank is well-equipped and positioned  to support the country’s business in the path out of the crisis,” says  Mr Hampartzoumian.
In particular, the bank increased its retail  and small business lending portfolio by 6.1% in 2010, while establishing  a stabilisation programme for small businesses that needed to  renegotiate their loans.
The provision of extra working capital  by the bank that has a 17% market share should be a major contributor to  Bulgaria’s economic recovery.
Burkina Faso
Ecobank Burkina Faso
Ecobank has benefited from Burkina Faso’s economic stability of  the past few years. Largely shielded from the problems afflicting other  parts of the world, the country’s real gross domestic product rose 5.7%  last year and is forecast to expand 6.5% in 2011. Inflation, like that  in other West African Economic and Monetary Union states, is stable,  with Burkina Faso’s currently at about 2.5%.
As such, Ecobank’s  net profits in the country were CFA Fr4.6bn ($9.5m) in 2010, 34% higher  than in 2009. Its return on equity also rose during the year, from 14%  to 19%.
The lender targeted corporate banking opportunities,  particular those involving the infrastructure, construction, building  materials, manufacturing and tourism sectors.
Ecobank also  increased its productivity, with its cost-to-income ratio decreasing  from 73% in 2009 to 64% a year later. It did this by improving its  technology and reducing turnaround times for loan applications.
Ecobank,  already the largest commercial lender in Burkina Faso following a  merger in 2009 with BACB, wants to continue growing its assets and  deposits in the coming years. Banking more small and medium-sized  enterprises as well as the unbanked will be key to its plans, as will  developing its offerings for existing customers, not least mobile  banking products.
If Burkina Faso’s economic growth is sustained over the next few years, Ecobank is likely to keep on reaping the benefits.
Burundi
Ecobank Burundi
Ecobank entered Burundi in 2008 when it took over liquidated  lender Société Burundaise de Banque et de Financement. It has since  turned the institution around and made it one of the biggest of the 12  commercial banks in the country. Ecobank now ranks fourth by assets and  liabilities, having been in seventh place immediately following its  acquisition.
It has taken Ecobank little time to make a success of  its Burundian foray. In 2009 it made a loss as it tried to rehabilitate  the old lender. But in 2010 it made its first profit, attaining net  earnings of $486,000.
This amounted to low return on equity of  5.5%. But that level is only likely to rise the more Ecobank  consolidates its position and expands.
Ecobank’s lofty ambitions  were made clear by the fact it grew its assets in Burundi by 39% in 2010  to $55m. It is determined to make sure this growth is sustainable,  however, and increased its Tier 1 capital even more – by 50% to $8.5m.
The  lender’s main focus over the past 18 months has been its  competitiveness. Following an extensive market survey in 2010, it  reduced many of its fees, notably on letters of credit, guarantees and  transfers. This brought in more revenues.
The bank also decided to undercut its competitors when it came to foreign exchange sales, which also boosted its market share.
It  recently launched a prominent advertising campaign and will continue  with this to build up its deposits and corporate banking business.
Small  companies are crucial to Ecobank’s growth in Burundi, as the country  has a gross domestic product per person of just $180, making it one of  the poorest in the world. So far the bank has made good progress; its  SME portfolio expanded 88% between 2009 and 2010.
Cambodia
 
ANZ Royal Bank 
 
 
 
 
Stephen Higgins, CEO, ANZ Royal Bank in Cambodia
Cambodia’s burgeoning banking market has seen the entrance of a  number of competitors, which has made things more difficult for the  incumbents. “A fast-growing market is naturally going to be attractive,  but with more than 30 commercial banks and a population of just 14  million, the market just isn’t big enough for everyone,” says Stephen  Higgins, CEO of ANZ Royal Bank in Cambodia.
This year ANZ Royal  Bank was a key player in a number of first-time transactions for the  Cambodian market. It was involved in Cambodia’s first ever Khmer Riel-US  dollar foreign exchange swap for a local Cambodian business. And in  2011, Cambodia witnessed the first ever interest rate swap for a  microfinance institution.
“These two historical milestone  transactions marked the first time in Cambodia’s history that Cambodian  businesses were able to effectively manage and hedge their interest rate  and currency exposures,” says Mr Higgins.
He adds that ANZ Royal  is the only bank in Cambodia that has the technical capacity to produce  hedging instruments such as interest rate swaps, foreign exchange swaps  as well as non-deliverable forwards.
And as for other  opportunities in the Cambodian market, Mr Higgins says: “The big  opportunities in the coming year will be supporting the agribusiness and  manufacturing sectors, where we continue to see a lot of foreign direct  investment. While the challenges faced by the global economy will flow  through to Cambodia, the outlook for this market is still fairly  strong.”
Cameroon
 
UBA Cameroon
 
 
 
 
Georges Wega, chief executive, UBA Cameroon
UBA Cameroon, a subsidiary of Nigeria’s United Bank for Africa, has  only been operating in Cameroon for four years, but it has made a  promising start and has rapidly grown its market share and branch  network.
In 2010, its third full year of operations, it made a net  profit of CFA Fr1.4bn ($2.8m), compared with a loss in 2008 and a  profit of CFA Fr182m in 2009. It managed to be highly profitable last  year despite its assets actually declining by 9%.
UBA is still  expensive to run. Its cost-to-income ratio was 78% in 2010, but this  fell from 97% a year earlier and is likely to drop further this year.
Part  of the reason for its ability to increase profits amid falling assets  was its ability to help manage sovereign bond issues by Cameroon’s  government. UBA also does much work with the state-owned Sonara oil  refinery, financing the purchase of its crude and handling between $15m  and $30m each month in dollar foreign exchange forwards.
UBA has  also improved its technology. It is one of the few banks in Cameroon to  have converted all of its cards from magnetic strips to chip and pin.
It  wants to grow its balance sheet and profits by at least 30% in 2012,  says Georges Wega, chief executive of the bank. He adds that the lender  plans to boost its presence in all segments of the banking market. In  particular, it will target project financings carried out by the  country’s government.
Canada
 
Royal Bank of Canada
 
 
 
 
Gord Nixon, chief executive, Royal Bank of Canada
Continuing to wave the flag for sensible, prudent banking – in  typical Canadian style – Royal Bank of Canada (RBC) achieved an  impressive growth in profits for 2010, more than 35% higher than in  2009, and a healthy 14.9% return on equity. Assets and Tier 1 capital  have expanded by almost 11% and 7%, respectively, while levels of  leverage have remained low and liquidity high.
In its home  market, RBC has comfortably retained its leadership position. “Canada  has continued to be a source of strength and we continue to lead the  market place in virtually all areas of financial services in [the  country], whether it’s deposit products or lending products or wealth  management,” says chief executive Gord Nixon.
RBC’s international  activities have also brought good results, in wealth management in  particular, where the bank acquired UK-based BlueBay Asset Management, a  leading European fixed-income manager. Although not immune from the  European sovereign debt crisis, RBC’s capital markets business performed  well in relative terms and its international presence is set to stay  strong.
Wealth management and capital markets have indeed been the  focus of RBC’s strategy in the US, where the bank decided to sell its  ailing US retail bank to PNC Financial Services in 2011.
Despite  the global impact of the struggling European and the US markets, RBC  forecasts a relatively good year ahead for the bank. “From a  macroeconomic perspective, it is going to be a challenging environment  for the banking industry,” says Mr Nixon. “As a result of that, we’re  being diligent in taking our expense growth rate down across our  businesses. Our expectation is that we should be getting relatively  strong growth, and in Canada we expect to grow at a 25% premium over the  industry growth. We have been able to achieve that over the past five  to 10 years and we expect to continue to be able to achieve it [in the  future].”
Cayman Islands
 
Scotiabank & Trust (Cayman)
 
 
 
 
Doug Cochrane, managing director, Scotiabank & Trust (Cayman)
Trying to increase sales while keeping bad loans down has been a  challenging task in the Cayman Islands, where gross domestic product has  declined in each of the past three years. Further, immigration issues  have added to the country’s headaches and acted as an additional barrier  to economic growth.
Scotiabank & Trust (Cayman) sailed  through 2010, keeping sales volumes up while minimising loan losses,  thanks to early identification and resolution systems. It closed the  year with a healthy level of net profits and a low non-performing loans  ratio.
“Scotiabank [& Trust (Cayman)] focused on maintaining a  high-quality loan portfolio, despite the challenging economic times  being faced in [the country],” says managing director Doug Cochrane.  “The population attrition on the island was another factor that made  growing our business very challenging as well.”
During tough  times, it is crucial that internal information systems are effective and  efficient. Scotiabank improved its systems to fine-tune the process of  offering the right product to the right customer and that, in turn,  customers would get timely and detailed information on their accounts.  Further investments went into improving online banking and introducing a  new mobile banking service.
As for the future, the bank is keen  to bring its products to other markets within the Americas. “We will  focus on developing offshore business, mainly in the Latin American  countries and Canada, given their stable economic position,” says Mr  Cochrane.
Central African Republic
Ecobank Centrafrique
Ecobank Centrafrique, like other businesses in Central African  Republic, felt the effects of political uncertainty in 2010. This  stemmed from the postponement on numerous occasions of presidential and  legislative elections, which were eventually held early this year.
The  anxiety this created was in large part why Ecobank’s net profits fell  in 2010 by 20% to $5.5m. Still, this amounted to a return on equity  (ROE) of 27% – ROEs were 45% in 2008 and 35% in 2009.
And despite  the fall in profits, Ecobank managed to keep productivity fairly high;  its cost-to-income ratio was 57% in 2010. Non-performing loans were also  kept under control, making up 6% of the bank’s portfolio at the end of  the year.
Moreover, the political volatility did not stop Ecobank  launching new products. Among those it introduced were a taxation  package on cash dispensing, card management services and overdraft  facilities, all of which generated plenty of commission.
Ecobank  remained very active in the small and medium-sized enterprise (SME)  market. It launched new products for SMEs getting support from  international development agencies. It mainly focused on importers,  building companies, commodity financing and equipment financing.
Ecobank  is Central African Republic’s biggest commercial lender by assets and  deposits. Of the 21 branches in the country, 12 are Ecobank’s. But it  intends to expand further. Next year it plans to add 10 ATMs to the  eight it already has.
Chile
 
Banco Santander Chile
 
 
 
 
Claudio Melandri, chief executive, Banco Santander Chile
Chile continues to be considered Latin America’s most stable economy  and its banking system one of the region’s healthiest. The country,  however, was not immune from the global economic downturn and the  spectrum of loan losses and reduction in sales volumes overshadowed the  banking system as a whole. And in early 2010, Chile was hit by a  devastating earthquake.
“During 2010 we wrapped up a very  demanding year,” says chief executive Claudio Melandri. “We had the  largest earthquake in Chile’s history in February 2010, so we had to  change our plans for at least the first part of the year quite fast.  Thanks to a good evaluation of the situation and a well-focused plan,  together with an outstanding execution, the bank was able to end the  year with a return-on-equity ratio of 27.9%. The cost-to-income ratio  reached 35.3%, in line with our goals.”
In such a difficult year,  Banco Santander Chile managed to grow its loans and deposits volumes,  while improving sales of mutual funds insurance and equity products.
Further,  in an effort to push sales but contain losses on loans and reduce risk  volatility, the bank invested in new scoring and risk prediction models  for consumer lending, residential mortgage lending and small and  medium-sized corporate clients.
Additional investment went into a  new customer relationship management platform, internet and mobile  banking and improved ATM services. Provisions on non-performing loans  (NPLs) went from 94% in June 2010 to 112% 12 months later, and the bank  closed 2010 with lower NPL levels and higher profits, assets and Tier 1  capital than the previous year.
China
 
ICBC
 
 
 
 
Jiang Jianqing, chairman, ICBC
Reform has been a focus for ICBC as it pursues its ambition of taking  centre stage in the international financial community and becoming one  of the world’s leading banks.
While banks in many markets around  the world have cited the financial crisis as a cause for concern, ICBC  sees it as an opportunity, and in the post-financial crisis era it has  been actively internationalising and diversifying its operations. The  bank has increased its geographical spread and has also been  accelerating its innovation in products, technology and sales channels  in its bid to become a recognised comprehensive financial services  provider.
This has been done through mergers and acquisitions of  overseas institutions in both emerging and developed markets, which has  laid the foundations for future expansion. Part of the bank’s strategy  is focused on the domestic insurance market in China.
Another  area of interest has been in China’s capital markets, which have been  constantly evolving, and ICBC has developed its intermediary business.  In a sign that the nature of the bank’s income is changing, from what  has conventionally been based on interest rate spreads, ICBC’s net fee  and commissions in 2010 accounted for 19.13% of its total operating  income. In addition, investment and trading contributed to more than 20%  of the bank’s total operating income.
Another change at the  bank, which also reflects the changing nature of the Chinese market, is  that the ratio of online banking business to total banking business rose  to 59.1%.
ICBC performed well in the past year, with its net  profits in 2010 growing 28.3% to Rmb166.03bn ($26.1bn) from Rmb129.4bn  in 2009.
Colombia
 
Banco de Bogota
 
 
 
 
Alejandro Figueroa, chief executive, Banco de Bogota
It was a significant year for Banco de Bogota, as the bank has  carried out the largest overseas purchase by a Colombian lender, joining  the group of ‘multilatinas’, Latin America’s growing businesses  expanding outside of their national borders to serve the wider region.
The  $1.92bn acquisition of BAC-Credomatic has provided Banco de Bogota with  some highly complementary business activities throughout its  operations.
BAC-Credomatic is the third largest bank in Central  America by assets and a credit card leader in the region, with a  presence in nine countries and an established and solid brand in the  consumer market. The deal has provided Banco de Bogota’s existing  customers with a higher offering of credit and trade products, in both  Colombia and Central America.
“Taking advantage of  BAC-Credomatic’s experience in debit and credit card system  implementation, Banco de Bogota aims to extend its market share in the  retail sector and maintain its current and important share in business  banking,” says chief executive Alejandro Figueroa. “We took a strategic  decision to enter the mortgage market, where the bank has great  opportunities for growth, complementing our retail product portfolio. In  addition, we will be consolidating our activity in insurance banking, a  new business operation, available in all our branches from 2011.”
Banco  de Bogota closed 2010 with assets almost one-third higher than the  previous year. Tier 1 capital grew by more than 10% and net profits were  almost 7% higher than in 2009.
Costa Rica
Banco de Costa Rica
 
 
 
 
Mario Rivera, chief executive, Banco de Costa Rica
The main challenges of the past year, says Banco de Costa Rica’s  chief executive Mario Rivera, were to grow sales and levels of  profitability in an adverse international economic environment while  keeping bad loans under control. The bank’s prudent management secured a  14.8% increase in net profits while non-performing loans were 2.44% of  total loans, a ratio only slightly higher than the previous year.
Because  of the difficult economic conditions, Banco de Costa Rica redesigned  specific products to better suit clients’ changing needs. These new  solutions paid off and in some cases achieved extremely good results.  Sales of mortgage products saw a year-on-year rise of 45%, consumer  loans grew by 42% and credit cards portfolio rose by 27%.
Looking  to the future, Banco de Costa Rica is optimistic, as the  telecommunications sector opens up and new providers in this sector, and  their services, enter the market. The bank sees potential in the small  and medium-sized enterprises (SME) segment too.
Mr Rivera says:  “We see opportunity in the telecommunications [sector] opening in Costa  Rica. We will keep implementing technology to make financial processes  and services more efficient for customers. We see opportunity in the new  electronic channels as mobile banking services and social networks. We  will aggressively enter into a segment in which we have barely  participated: SMEs.”
Croatia
Privredna Banka Zagreb
 
 
 
 
Bozo Prka, chief executive, Privredna Banka Zagreb
High levels of foreign currency debt in the economy mean that Croatia  is quite exposed to the eurozone liquidity squeeze, but Privredna Banka  Zagreb (PBZ) has still managed to maintain its momentum.
Profits grew 6.5% in 2010, and have accelerated to almost 20% growth in the third quarter of 2011.
“Even  though the economic slowdown in Croatia continues to impact all  business segments, in  the past year the PBZ Group managed to strengthen  its capital position, maintained liquidity, efficiently controlled  costs and keep sound asset quality,” says PBZ chief executive Bozo Prka.
Technology  uptake is a vital component of the bank’s success, with 200,000  internet banking users, and 80% of all transactions going through the  internet, ATMs, mobile phones or electronic funds transfer  points-of-sale. The bank was also the first in Croatia to launch an  online trading platform for the Croatian stock market, open to both  corporate and retail customers.
“PBZ has always been the market  leader in the area of electronic distribution channels and card  operations, which now includes more than 40 American Express, MasterCard  and Visa products with 2 million cards issued. We introduced a  brand-new method of payment at points of sale, with the use of  two-dimensional bar codes throughout the whole network of the country’s  largest supermarket chain,” says Mr Prka.
He believes that  membership of the Intesa Sanpaolo group should continue to maintain the  bank’s strategic position in Croatia. In addition, multilateral support,  including a small business loan programme for E20m from the European  Bank for Reconstruction and Development should sustain PBZ’s growth in  this segment.
Cyprus
Bank of Cyprus
 
 
 
 
Andreas Eliades, chief executive, Bank of Cyprus
The Cypriot economy and financial sector are inevitably exposed to  the debt crisis in Greece, and the European Banking Authority (EBA)  urged Cypriot banks to raise their capital in October 2011, to withstand  losses on Greek sovereign debt. Bank of Cyprus was in the best position  to respond to these pressures, having increased its Tier 1 capital by  25% over the past year, and issued a contingent convertible bond for  E890m in June 2011. In November 2011, the bank offered to exchange up to  E600m of this bond into a mandatory convertible, to further shore up  its capital.
“Bank of Cyprus is in a very strong position –  despite the ongoing crisis in Europe – as a result of its conservative  commercial banking model, and its four-pillar strategy of effective risk  management and increasing its recurring profitability, capital and  liquidity,” says chief executive Andreas Eliades.  
In the first  half of 2011, net interest income rose 11% despite the higher borrowing  costs for peripheral eurozone banks. Deposits fund 77% of the bank’s  lending, while upcoming wholesale maturities total less than E50m for  the next two years. In addition, liquid assets are at 28% of the bank’s  total portfolio, all of which gives the bank a significant cushion to  cope with the volatility in eurozone funding markets.
Even while  it navigates the Greek crisis fallout, Bank of Cyprus is still tapping  into growth opportunities. The bank signed a deal with China Development  Bank in January 2011 to co-finance projects in shipping, renewable  energy and infrastructure in Cyprus and elsewhere.
“The continued  focus on the four main pillars of our strategy will enhance the group’s  ability to benefit from opportunities that will emerge from the  economic recovery and thereby establish the group as a powerful regional  banking institution in south-eastern Europe,” says Mr Eliades.
Czech Republic
Ceskoslovenska obchodni banka
 
 
 
 
Pavel Kavanek, chief executive, Ceskoslovenska obchodni banka
Perhaps the best tribute to Ceskoslovenska obchodni banka (CSOB)  comes from its 100% owner, Belgium’s KBC Group. In its original  restructuring plan submitted to the European Commission for approval in  2009, KBC intended to sell its operation in the Czech Republic and keep  its bank in Poland. By 2010, the parent had reversed this decision, and  requested permission from the European Commission to keep CSOB while  selling up in Poland.
A 20.6% return on equity and 24.4% growth in  underlying profits in 2010 (excluding the one-off sale of its Slovak  operations in 2009) make a strong investment case. But so does its  market-leading risk management, which kept the cost of risk to a peak of  just 83 basis points in the third quarter of 2010. By December 2010,  the bank was ready to announce that the crisis was over, and allow  borrowers a fresh relaxation of credit processes to stimulate new  lending.
“We have been able to grow market positions in several  core products, which is not easy for a group of our size. I am also very  proud of our risk management – our credit culture compares very well to  the market,” says CSOB’s chief executive, Pavel Kavanek.
For  2012, the bank is planning an ambitious self-service portal that will  allow clients to log in online and manage their finances through the  full range of channels, including call centres, self-service kiosks at a  post office, smart phones and interactive televisions. In addition, the  platform will facilitate payment systems for partner service providers  such as retailers or transport companies.
“Big, obvious  opportunities are becoming rare. We will continue to invest in the  capabilities of our people and the health of our organisation to  identify, develop and deliver value to clients in a more diverse,  distributed and meaningful manner,” says Mr Kavanek.
Democratic Republic of Congo
Rawbank
Given its sheer size and poor infrastructure, expanding a branch  network in the Democratic Republic of Congo (DRC) has never been easy  for banks. But Rawbank has pushed ahead, opening six branches this year,  including in the far-flung and sometimes lawless east of the country.  “This ongoing branch expansion is always very difficult in the DRC,”  says Mazhar Rawji, Rawbank’s chairman. “To open six branches is a very  important feat.”
 
Rawbank, the biggest lender in the country by assets and deposits, plans  to open another 10 branches next year to add to its current 24.
The bank has managed to make profits for the past eight years, despite  the country’s often-chaotic politics and economic volatility. In 2010,  Rawbank made net profits of $5.7m, amounting to a return on equity of  17%. It raised its Tier 1 capital by 60% to $27.5m.
Rawbank has  placed plenty of emphasis on small businesses in the past year. It  signed multi-million dollar loans with the likes of the International  Finance Corporation and the European Investment Bank to support such  borrowers. Its exposure to them increased 37% to $121m in the 12 months  to the end of June 2011.
Improving its technology has also been a  priority for Rawbank. It launched online banking this year, established a  data recovery centre in the DRC and installed compliance software  called Accuity, which monitors all transactions and sends out a series  of alerts based on certain parameters.
The bank has big ambitions  for 2012. It wants to set up a private banking business that will be the  country’s first to offer Congolese exposure to bonds, equities and  commodities abroad. “We have the green light from the central bank to  offer international products,” says Mr Rawji.
Rawbank is also  close to being mandated by two clients — in the brewery and  telecommunications sectors — to arrange dollar bonds, a rarity in the  DRC, of $20m to $30m.
Denmark
Nordea Bank
 
 
 
 
Christian Clausen, CEO, Nordea Bank
While several smaller banks in Denmark have entered bankruptcy over  the past year on rising non-performing loans and difficult funding  conditions, Nordea’s profits in Denmark rebounded 140% in 2010.
The  bank’s 11% return on equity in Denmark was the highest among the  largest players, while total assets declined only slightly in 2010,  despite weak economic conditions and heavy competition, especially in  the large corporate sector.
Nordea’s Danish operations benefit  from the very strong funding position of the group as a whole. Its  larger Scandinavian neighbour Sweden is perceived as a fiscal safe  haven, and the bank prefinanced a significant proportion of maturing  wholesale obligations before the eurozone debt crisis began to bite. As a  result, the bank’s average bond maturity is now 3.7 years, up from 2.1  years in 2008. Following a drive to collect deposits, combined household  and corporate deposits were up 15% year on year in the second quarter  of 2011.
The group has also engaged in active balance sheet  management, bringing down total risk-weighted assets even while total  lending is growing, therefore strengthening the overall capital adequacy  ratio by reducing risk, rather than cutting customer business.  
On  the retail side, Nordea’s strategy is to move customers up the value  chain to more premium products. In Denmark, the bank increased the  number of premium retail clients in its Gold and Private banking  segments by 57,500. The bank has collected significant retail market  share from rivals, with its share of household lending up to 20.1% in  2010 from 14% in 2008.
Its corporate banking market share is also  expanding in Denmark, from 20.5% in 2009 to 21.6% in 2010, while the  bank has attracted 13,500 new small business clients since the end of  2010. A branch network transformation that separates transactions from  advisory services has further helped the quality of service delivered to  business clients.
Djibouti
International Commercial Bank
 
 
 
 
Podila Phanindra, head, International Commercial Bank in Djibouti
Banking in Djibouti was tough enough before the start of 2011. But  since then two new commercial lenders have set up operations, bringing  the total number of banks in the country to 11. Given that Djibouti only  has a population of 800,000, competition could hardly be more intense.
Despite  this, International Commercial Bank (ICB) has managed to keep on  growing its profits in the past few years. They rose 240% to DFr47m  ($264,000) in 2010, having grown seven-fold in 2009.
Djibouti  lacks a treasury or interbank market. As such, lending to retail and  corporate customers is just about the only way for banks to deploy  funds. ICB has made sure it does use its balance sheet in such a way.  Its loan to deposit ratio at the end of 2010 was 51%, substantially  above the sector average of just 32%.
This year the bank has  focused more on consumer banking. But it has also increased its exposure  to small and medium-sized businesses (SMEs). It started off 2011  aggressively, expanding its SME portfolio 20% to DFr540m in the first  three months alone.
But it has managed this growth carefully. Its  non-performing loans ratio was under 1% at the end of 2010. “The focus  was on maintaining a very high quality of assets throughout the year and  it was successful,” says Podila Phanindra, head of ICB in Djibouti.
The  bank has also improved its technology, including upgrading its Swift  operations. This led to faster remittance services, an importance  business line for Djibouti’s lenders.
Next year, ICB plans to  exploit new foreign investment in the country, particularly in the  transport sector, which is vital for Djibouti given its status as a  shipping hub.
Dominican Republic
Banco Multiple Leon
 
 
 
 
Carlos Guillermo León Nouel, president, Banco Multiple Leon
In a country reliant on exports, five years of declining sales of  goods and services to international markets are hard to bear. The  Dominican Republic has suffered from poor export volumes since 2007, and  the contribution of exports to the country’s gross domestic product has  been going down at an average of 200% per year. Further, increases in  the prices of gas, food and energy have generated worrying levels of  inflation.
Operating in such an environment has been a great  challenge, which makes the performance of Banco Multiple Leon all the  more commendable, as the lender promptly adapted its processes and  products to the changed market and different customers’ needs.
The  bank closed 2010 with net profits 88% higher than the previous year,  kept on expanding its assets – focusing attention on those that would  provide higher performance – increased its Tier 1 capital, and provided  investors with a healthy 21% return on equity.
“The continuous  improvement of processes is the fundamental pillar that supports the  bank’s recent successes,” says Carlos Guillermo León Nouel, president of  Banco Multiple Leon. “We were able to reduce the time cycle of  commercial loans from six days to two days and home mortgages from 18  days to six days. We also reduced the total time it took to resolve  credit card claims to less than two days.”
Improved processes  meant that the bank’s cost-to-income ratio continued to decrease and  went down to 64.5% in 2010 from 68.1% in 2009, which was already a  substantial improvement from the 80% ratio of 2008.
Ecuador
Produbanco
 
 
 
 
Abelardo Pachano Bertero, vice-president, Produbanco
In the highly controlled banking market of Ecuador, where market  liquidity and banks’ product prices are usually decided by the monetary  and banking supervisory authorities, lenders’ ability to manage risk is  restricted. On top of this, the significant slowdown of the Ecuadorian  economy made it difficult to grow business lines and provide  shareholders with a good return.
While caps on interest rates for  a number of banking products were lowered last year, Produbanco  successfully managed to expand its retail banking and small and  medium-sized enterprises businesses, while keeping non-performing loans  at very low levels. The bank focused on asset quality, adapted products  to customers’ changing needs and decentralised decisions where suitable  to provide a timely service and to bring it as close to the clients’  operations as possible.
Investment in technology allowed for the  launch of a new mobile banking application and improved, safer online  banking services.
Produbanco’s strategy paid off. The bank grew  its net profits by 21% last year, after the previous years of declining  income, while also expanding assets and strengthening its Tier 1  capital. The return-on-equity ratio also improved and was 14.12% for  2010, up from the 12.52% of the previous year. Its cost-to-income ratio,  despite still being high, at 73.67%, has improved from the 2009 figure,  while non-performing loans have continued on their downward trajectory,  standing at 0.76% at the end of 2010.
Egypt
Commercial International Bank
The revolution that overthrew ex-president Hosni Mubarak’s regime  in February sent Egypt’s economy crashing, caused inflation to spike  and led official foreign exchange reserves to plummet.
Businesses in the country have been under extreme stress as a result.
Commercial  International Bank (CIB), Egypt’s biggest private lender and third  largest overall, did more than merely survive, however. Even during the  height of the unrest in the few weeks following the start of  anti-Mubarak protests on January 25 — when the country’s banks were shut  — CIB ensured its customers’ needs were met. Relationship managers were  instructed to keep in contact with their clients and CIB’s staff kept  on delivering salaries to businesses, with or without security in tow.
And  far from halting new business, CIB carried on lending, increasing its  assets by 5% in the first quarter. Deposits increased too, by 3%,  showing that Egyptians were more than confident in the bank’s strength.
The  result is that CIB has increased its market share of loans and deposits  in 2011. Remarkably, given what the country has been through, its  management thinks it can obtain a return of equity of 20% for 2011, not  far below that of 28% in 2010. “The real test of our solidity is whether  we can bring back top-line revenues by the end of the year to the same  level that they were in 2010,” says Hisham Ezz Al-Arab, managing  director and chairman of CIB. “If we can do that, and I think we will,  that means the engine is functioning well.”
Mr Al-Arab is  optimistic about 2012, despite Egypt’s continued political fragility.  “All the political parties, with no exception whatsoever, mean good for  the country,” he says. “The army wants to go back to its barracks. All  the country needs is a legitimate government in place.”
Estonia
SEB Pank
 
 
 
 
Riho Unt, chief executive, SEB’s operations in Estonia
The past 18 months have brought economic recovery for Estonia after  one of the most severe contractions in Europe, and SEB Pank has  capitalised on the turnaround. The bank returned to profit in 2010, with  return on equity at 10.8% – lower than before the crisis, but still  higher than the average in many eurozone countries. The bank also  slashed its cost-to-income ratio, from 73% down to 49%.
“In 2010,  the main challenge was to detect the moment when the sustainable  recovery of business activity started. SEB had used the period of  economic downturn for several business model improvements, which allowed  us to be in the best shape to meet recovering demand in the business  environment,” says Riho Unt, chief executive of SEB’s operations in  Estonia.
In a bid to avoid mass redundancies, the bank launched a  comprehensive retraining programme in 2010 designed to shift staff focus  from products onto customer relationships. The bank also used the  stagnation in the real estate market as an opportunity to reorganise its  branch network, placing new offices in more convenient locations for  clients. The combined effect of these measures has been to make SEB  better prepared than competitors for the pick-up in business, with lower  staff turnover and training needs today.
“We see many  possibilities for extending committed relationships both in retail and  business banking arms. Efforts in managing business client relations  resulted in the bank increasing business clients by more than 5% in the  past year, winning more than 3000 clients from other banks,” says Mr  Unt.
He plans to continue upgrading the bank’s internet and mobile  banking services, which are already estimated to save the bank the work  of about 2500 branch offices each year. One new initiative launched in  March 2011 is to offer a mortgage advisory service via Skype.
Ethiopia
Dashen Bank
 
 
 
 
Lulseged Teferi, head, Dashen Bank
Dashen Bank has further consolidated its position this year as the  biggest privately owned lender in Ethiopia, a market whose banking  system, despite being liberalised in the early 1990s, is still dominated  by state-owned institutions.
In October, Dashen announced a  record post-tax profit for the 2010/11 fiscal year of 451m birr ($26m),  up 39% from 2009/10. Assets rose a hefty 18.5%. But Dashen has  maintained a strong capital buffer and has a capital adequacy ratio of  23%. This, along with Dashen’s low loan-to-deposits ratio of 52% and  Ethiopia’s rapid real economic expansion of more than 10%, means there  is still plenty of scope for growth.
Dashen has also been among  Ethiopia’s most innovative banks in recent years. It was the first to  bring card payment services to the country and this year it launched  mobile banking. Moreover, it has expanded its fee-based income by  further developing its international money transfer operations.
The  bank is leading efforts among Ethiopia’s private lenders to extend  credit to small corporate borrowers. Among its recent moves, it signed  an agreement with US and French development agencies to provide loans to  small businesses and microfinance institutions.
Next year it  plans to introduce ATMs that accept deposits. “We must be the first ones  to bring these in,” says Lulseged Teferi, head of Dashen Bank.
It  will also build on its network of 64 branches as it seeks to expand  banking services in what is a very lowly penetrated market.
Finland
OP-Pohjola Group
 
 
 
 
Reijo Karhinen, executive chairman, OP-Pohjola
An effective bancassurance model and improvements to the management  of its co-operative group structure helped OP-Pohjola continue its  steady progress, with net profits up 24% in 2011. The bank established a  central service unit for the co-operative bank members, separate from  its central banking functions, designed to improve the group’s  responsiveness to fast-changing customer demands. In particular,  OP-Pohjola took advantage of lay-offs at Nokia to acquire skilled staff  to enhance its mobile and internet banking development.
“Increasing  regulatory burden together with challenging market conditions are  putting more pressure on banks’ profitability while significant  investments in service offering and distribution channels are required  to meet changing customer needs. Hence, striking the right balance  between growth and efficiency initiatives – in combination with sensible  pricing policies – has become increasingly critical to future success,”  says OP-Pohjola executive chairman Reijo Karhinen.
Closer  integration between banking and insurance arms has brought the  proportion of cross-selling to customers to record levels. The bank also  established a new subsidiary, Pohjola Health, at the start of 2011 to  provide employee wellbeing and benefit services to its corporate  clients. OP-Pohjola’s corporate banking has performed particularly well,  with its corporate loan book growing 11% in the past two years,  compared with a 1% decline in corporate lending for Finland as a whole.
“We  have significant potential to further increase the number of joint  banking and insurance customers within our existing customer base.  Moreover, we believe the operational environment will continue to favour  banks with a strong financial position and solid reputation, supporting  our ambition to further strengthen our funding structure as well as  build on our leading position within the small and medium-sized  enterprise segment,” says Mr Karhinen.
France
Confédération Nationale du Crédit Mutuel
 
 
 
 
Alain Fradin, chief executive, Confédération Nationale du Crédit Mutuel
At a time of liquidity squeezing for many eurozone banks,  Confédération Nationale du Crédit Mutuel continues to represent a safe  haven, with 70% of its clients also among its owners, a non-performing  loan ratio of just 3% and a retail customer base that provides most of  its funding via deposits.
Chief executive Alain Fradin says that  85% of its net banking income stems from stable activities, which drove a  rise in profits of more than 60% in 2010. This is backed up by a strong  core Tier 1 capital adequacy ratio of 11.6%, and minimal recourse to  dollar wholesale funding, which has now become scarce for European  banks.
“Crédit Mutuel stands out as one of the major banks in  France and Europe, serving more than 29 million customers. The results  so far in 2011 have seen a sustained commercial activity. Dynamism,  proximity and quality of the commercial relationship have notably  enabled customer acquisitions, the development of the network, a  decrease of the cost of risk in the retail and financing bank, as well  as the increase in outstanding credit and deposits,” says Mr Fradin.
Crédit  Mutuel has a 19.2% market share in loans granted to start-up companies,  and approved loans to small businesses rose by 16.3% in 2010. It is  also the market leader for providing remote internet security to its  online banking customers.
“Our results illustrate and confirm the  adequacy of our development model in mobile telephony, e-banking,  electronic payments, electronic surveillance and insurance. Crédit  Mutuel’s solid fundamentals place it favourably in comparison both to  its French and European competitors, and give it means to face the  crisis, or even come out strengthened,” says Mr Fradin.
Gambia
Trust Bank
 
 
 
 
Pa Njie, managing director, Trust Bank
Trust Bank strongly came through Gambia’s 2010 slowdown, caused by a  fall in tourism, remittances and exports. Its assets grew 16% to 3.4bn  dalasis ($113m) during the year, while its net earnings rose 8% to 70m  dalasis. The latter amounted to a return on equity of 24%. This was less  than the level of 37% attained in 2008, but an improvement from 2009.
And  while Trust Bank’s non-performing loans ratio of 11% at the end of 2010  was high, it fell five percentage points from 16% a year earlier.
The  bank went about its expansion in the past year with an aggressive  marketing strategy. It also renovated some of its existing branches,  built new ones, improved its mobile banking services and installed new  ATMs.
In March, Trust Bank became the first lender in Gambia to  launch an electronic bill service payment. This allows people — both  customers of the bank and non-account holders — to pay utility bills,  phone bills and school fees, among others, at its branches. The payments  are made and registered immediately. Pa Njie, the bank’s managing  director, said at the product’s launch that it would prevent
Gambians  having to travel to schools or several different offices to pay their  bills, instead enabling them to do that much more quickly and in one go  at Trust Bank’s branches.
Also in the past year, Trust Bank upgraded its internet banking service, which now allows customers to make payments online.
“The  financial crisis illustrated the need for banks to focus on their  essential role in society: to help customers save, invest, spend, borrow  and protect their money with trust and confidence,” says Mr Njie.
Georgia
TBC Bank
 
 
 
 
Vakhtang Butskhrikidze, chief executive, TBC Bank
Competition is intensifying in Georgia as the market recovers and new  investors in the banking sector build up their operations. But TBC Bank  managed to stay ahead of the pack in terms of return on equity, which  reached 14% in 2010 and climbed to 23% in the first quarter of 2011. The  bank’s non-performing loan ratio was just over 1%, significantly lower  than peers.
“We successfully addressed the challenge of  competition, and even increased market share and further improved  profitability. In addition, continuing turmoil in global capital markets  made it difficult for us to access international funding, but we  managed to successfully focus on local funding,” says TBC Bank chief  executive Vakhtang Butskhrikidze.
The bank’s cost-to-income ratio  is gradually declining, to 51.4% in the first quarter of 2011 from 55.1%  in 2010. And TBC has refocused its strategy on a series of segments  where it feels it has the best competitive advantage, including medium-  and high-income individuals, blue-chip corporates, larger mid-sized  companies, and microfinance via its subsidiary Constanta.
TBC  implemented a project during 2011 to roll out a multichannel service  covering the internet, mobile and ATM terminals, all accessed through a  single system. The bank has also launched a back-office project to  automate analysis of profitability across all segments and products,  starting with the bank cards product in March 2011. The bank’s aim is to  reduce transaction costs by 20% over the two-year life of the project.
“We  will focus on creating a leaner bank structure, which will concentrate  on service and sales efficiency, further enhancing branch productivity  and client experience. We will consider transferring transactions and  sales to alternative distribution channels as a major tool to achieve  efficiency objectives,” says Mr Butskhrikidze.
Germany
Commerzbank
 
 
 
 
Eric Strutz, chief financial officer, Commerzbank
Germany’s second largest lender is still some distance from full  recovery, but the past year represented a series of crucial steps in  ensuring its future. The bank concluded the integration of Dresdner in  Germany’s largest ever bank merger in May 2011. And it returned to  profit at the end of 2010, a year ahead of the schedule drafted in 2009  in its ‘roadmap 2012’ strategic programme.
“The bank has  continuously outperformed its targets: we managed to improve our  profitability significantly, we were successful in de-risking and  de-leveraging our balance sheet and we improved our capital base,” says  chief financial officer Eric Strutz.
“Our business model is  bearing fruit, and it is testimony to the successful implementation of  the right strategic measures and the extremely hard work of our  employees.”
Another vital development was the two-stage capital  raising of E11bn, completed in June 2011. This not only recapitalised  the bank, but also allowed it to pay down some of the German state  participation taken up at the height of the financial crisis – again,  ahead of schedule.
“The successful capital measure was a milestone  for Commerzbank, it was the largest transaction of this kind ever in  Germany, and we managed this highly complex exercise despite a  challenging economic environment. Due to its state-of-the-art structure  via two interlinked capital markets placements, it provided a maximum of  transaction certainty,” says Mr Strutz.
The core bank segments  including retail, the mittelstand (mid-sized companies) and its  corporates and markets division are all beginning to generate improved  revenues, totalling E3bn in the first three quarters of 2011.  Commerzbank remains dependent on a resolution of the eurozone sovereign  crisis, which tipped the bank back into a net loss in the third quarter  of 2011, but Mr Strutz says it will continue to support its German  clients and prepare for regulatory changes.
Ghana
Ghana Commercial Bank
 
 
 
 
Simon Dornoo, managing director, Ghana Commercial Bank
Ghana Commercial Bank (GCB), the Ghana’s biggest lender by assets,  has carried out a remarkable makeover in the past two years. Following a  steep rise in non-performing loans to 20% of its portfolio (most of  them emanating from the oil and mining services sectors), the bank is on  track to reduce them to 6% by the end of the year.
Its success in  tackling delinquent assets followed its appointment of a new managing  director, Simon Dornoo, in 2010. Under his leadership, the bank made  recovering impaired loans a priority. “It worked very well,” says Mr  Dornoo. “We have really repositioned the bank. We’ve built a strong  capital and liquidity platform that can launch us to the next level.”
But  despite having to fix its balance sheet, GCB has remained highly  profitable. It made net profits of 55m cedis ($34m) in 2010, up from 18m  cedis in 2009. This amounted to a return on equity of 23%, a level  which most lenders in the West can only dream of in the current economic  climate.
This year looks better still. Net income for the first nine months rose 7% to 38m cedis.
GCB’s  aims in 2012 include growing its consumer banking arm, which has  traditionally been neglected at the expense of corporate banking. It  also wants to build its transaction banking operations to increase  fee-based revenues, which are becoming increasingly important as  competition forces down net interest margins in the country.
GCB’s  turnaround has left it well positioned to take advantage of Ghana’s  high economic growth. Mr Dornoo says this and its branch network — the  biggest in the country — should mean it is able fully to exploit the  high demand for credit among Ghana’s rising middle class.
Greece
Alpha Bank
Sovereign restructuring will continue to pose heavy strains on  all Greek banks, but Alpha Bank stood out among the country’s top tier  as the only one that remained in profit in the first half of 2011,  despite taking a 21% haircut on its Greek sovereign exposure.  Pre-provision income was stable year on year at E560m, while staff costs  declined 3.3%.
The bank’s general expenses continued to decline,  in line with its platform redesign and procurement optimisation  initiatives, mainly in its Greek operations. Net interest income, the  main contributor of pre-provision income, was positively affected by the  continued progress in repricing the bank’s asset side, as well as from  the improvement in its deposit pricing.
In a further vital  development, Alpha signed a merger agreement with one of its peers,  Eurobank EFG, in August 2011, which will create the country’s largest  bank in all segments, and the largest network of branches. This should  have the critical mass to weather the storm, whatever additional capital  demands may fall on Greek banks.
Provided the merger clears the  final approvals, the new bank will be among the top 25 largest eurozone  banking groups with pro forma total assets of E146bn, and the bank’s  executives believe it will have the appropriate critical mass to  establish it as a reference stock in the capital markets. It will be  well placed not only to withstand the current economic turbulence but  also to create new opportunities and play a wider role in the south-east  European region.
While the combined bank will need to take extra  provisions in the face of a potential 50% write-down on Greek sovereign  debt, it will benefit from Alpha’s existing deleveraging strategy. Over  the 18 months prior to June 2011, the bank’s assets shrank by E6.2bn to  E63.4bn, with E1.7bn of securities sold, and an extra E532m of  provisions laid down in the first half of 2011.
Guatemala
Banco Industrial
 
 
 
 
Diego Pulido, chief executive, Banco Industrial
Despite the deteriorating economic conditions, Banco Industrial  retained its lead in Guatemala’s loans and deposits markets and improved  its support to corporate clients trading and expanding abroad. Its  non-performing loans (NPLs) ratio was also the lowest among the top  lenders in the country.
“Despite the low demand for loans, we  were able to maintain and increase our profitability ratios by focusing  on cost-reduction initiatives, attracting new clients, targeting retail  segments and cross-selling our products with other subsidiaries of our  group,” says Banco Industrial chief executive Diego Pulido.
“Due  to the global crisis, we estimated a deterioration in our loan  portfolio, [but] our rigorous and conservative credit policies allowed  us to maintain sound levels in our loan portfolio, maintaining very low  levels of NPLs to total loans and high levels of coverage ratios.”
During  such difficult times it is essential for banks to ensure that they are  strongly capitalised, and while making sure that investors’ returns  remained high, Banco Industrial also successfully increased its Tier 1  capital by more than 7%. Mr Pulido says: “Another important challenge  was the decision to strengthen our capitalisation ratios [due to] any  uncertainty resulting from the global crisis. In 2010, even though we  are the largest bank in Guatemala, our capital ratios levels reached  14.8%.”
As for the future, Banco Industrial will seek  opportunities in El Salvador, where it began operations in 2011; in  Honduras, through Banco del Pais, which is 90% owned by the bank; and in  the microfinance segment across all of Banco Industrial’s markets.
Guinea
International Commercial Bank
 
 
 
 
Ananta Padmanabhan, head, International Commercial Bank
Guinea’s banks have suffered a torrid time in the past three years. A  military coup in the Francophone west African country in late 2008 put  their operations under plenty of stress.
International Commercial  Bank (ICB) has made the most of the trying conditions. Having made a net  loss of GFr540m ($77,000) in 2009, the bank returned to profit in 2010,  earning GFr1.05bn. It also cut its non-performing loans ratio from  12.5% to 1%, chiefly by writing off assets against which provisions of  100% had been made, so as to make its balance sheet more transparent.
It  managed to maintain a strong liquidity buffer, however, and had a  capital adequacy ratio of 42% at the end of 2010. This was thanks in  part to a focus on deposits, which rose 37%.
And despite Guinea’s  political problems, ICB has not stopped seeking new customers. As such,  its loan portfolio grew 17% in 2010.
This year, its initiatives  include opening some branches on Saturdays and providing ‘cash pick-ups’  for customers wanting to deposit their daily cash collections but which  struggled to visit a branch themselves.
The head of ICB, Ananta  Padmanabhan, is optimistic about the country’s situation, following the  installation of a civilian government in January. But he cautions that  the economy is still fragile. “Changes are positive,” he says. “[But]  new measures to stabilise the economy will take some time to be  effective.”
Mr Padmanabhan adds that ICB will expend much of its  efforts next year on small businesses and the agricultural sector. “We  are gearing up ourselves to explore these opportunities,” he says.
Guinea-Bissau
Ecobank Guinea-Bissau
Ecobank Guinea-Bissau returned to profitability in 2010 when it  made net earnings of CFA Fr129m ($266,000), following a loss of CFA  Fr1.3bn a year earlier. This was with a low return on equity of 2% and  amounted to a cost-to-income ratio of 97%.
Yet the performance of  Ecobank, which has only been in Guinea-Bissau for four years, is  impressive given the country’s economic weakness and political  instability. The west African country has a history of military coups,  is one of the world’s poorest nations (gross national income per person  is only $510), relies heavily on foreign aid and has no natural  resources of note (cashew nut production is the economy’s mainstay).
But  despite the difficulties of operating in Guinea-Bissau, Ecobank is  ambitious. Currently the second biggest commercial lender in the country  by assets (it had CFA Fr34bn at the end of 2010), it wants to be the  largest and has launched an aggressive marketing campaign to ensure this  happens.
Ecobank is focusing on opportunities to fund  infrastructure projects, particularly transport and telecommunications  networks. It is also trying to win business from companies in the food  and construction sectors.
Retail banking is important, too.  Ecobank only has four branches in Guinea-Bissau, but plans to launch  several internet and mobile banking products to enable its 13,000  account holders to access banking services more easily.
Ecobank  Guinea-Bissau’s Tier 1 capital was increased by 36% to CFA Fr6.8bn in  2010. This left it with a high capital adequacy ratio and plenty of  firepower to fund its expansion.
Guyana
Scotiabank
 
 
 
 
Amanda St Aubyn, country manager, Scotiabank
Often, the best time to innovate a business is during challenging  times, and Scotiabank was the first to introduce mobile banking in  Guyana in the summer of last year. Since then, the bank has seen a 10%  monthly usage increase. A contact centre was also introduced to support  mobile and online banking customers, as well as new online products.  Investments were also made in improving online functionality.
Online  support was extended to the smaller businesses segment, along with a  new set of products and services specifically designed for these  customers. These range from term loans to credit line and overdraft  protection to a special online package for small enterprises that  includes online tools to help writing a business case and to manage cash  flows. Fee collection processes were automated and anti-money  laundering compliance systems were improved. The bank’s net profits  continued to rise and both assets and Tier 1 capital expanded.
Country  manager Amanda St Aubyn says: “The main successes [of last year] were  the introduction of a new deposit suite of products more suited to  customers’ needs; [and] improved fee automation; improved alternative  channel services [such as] bill payment via online, mobile and telephone  banking.” As for the future, Ms Aubyn says that focus will remain on  assets growth and delinquency management.
Honduras
Banco del Pais
 
 
 
 
María del Rosario Selman-Housein, chief executive, Banco del Pais
One of the poorest countries in Latin America, Honduras has been  dogged by a turbulent political environment over recent decades, and its  current government is struggling to introduce much needed structural  reforms.
Despite some good economic news – last year the country  was blessed with an exceptionally good harvest of coffee, which is now  an important source of foreign-currency income – Honduras has not had a  buoyant economic climate. However, thanks to new initiatives and  improved processes, Banco del Pais displayed good financial results in  2010, and its growth prospects look bright.
Higher net profits,  assets and Tier 1 capital are a reflection of greater sales and  management efforts. The bank’s capital adequacy ratio was 10.6% in 2010,  and its return-on-assets ratio was more than 3% – both indicators were  the highest in the country. These results are particularly good  considering that the bank’s most profitable market in the past, the real  estate sector, experienced a severe contraction.
Thanks to  improved procedures and analytical tools, Banco del Pais managed to keep  non-performing loans (NPLs) at 1.57% of its total loan portfolio,  almost half the national average and lower than its NPL ratio of 2009.  Investment in new technology helped to provide a better service to  customers. Its online banking platform was improved in terms of both  security and ease of use.
Banco del Pais also pushed sales of  international transfers, both sent and received, from outside the  country, which experienced an average growth of about 33%. On the cost  side, revised internal processes helped to keep expenses down.
Looking  forward, chief executive María del Rosario Selman-Housein says: “We  will focus on companies [trading with] the north triangle of Central  America; cross-sale programmes; the development of electronic products  and services. All of this [will be] complemented with an austere politic  of expenses control”.
Hong Kong
HSBC
Hong Kong has a special significance for HSBC, not least because  of its history in the country, but also its performance received special  mention in the group’s annual business review.
In 2010, HSBC’s  increase in profitability was driven by strong revenue growth,  particularly in investment and insurance product sales and trade-related  fees, which all resulted from improved economic conditions. HSBC’s Hong  Kong operations reported pre-tax profits of HK$42.19bn ($5.42bn) in  2010, an increase of 16.2% on 2009.
The bank has been building on  its position in the Hong Kong market, with particular strengths in  residential mortgages, credit cards, life insurance and deposits.
Its  number of premier customer numbers reached 500,000 in 2010, a  year-on-year increase of 31%. The bank’s Advance proposition, which was  launched in early 2010 to capture the mid-market segment, achieved a  customer base of 670,000 by the end of the year.
Aside from these  initiatives, the bank has been successful across its other business  lines of commercial banking, payment and cash management, trade and  supply chain, and global banking and markets, securities services and  global asset management.
And of particular interest in the past  year has been the explosion of interest in offshore renminbi, in which  Hong Kong – and HSBC – have played a key role. The bank has been  developing its offshore renminbi-related products and has ambitions of  being a market leader for renminbi products in Hong Kong.
Along  with this offshore renminbi boom, HSBC has been involved in a number of  firsts in Hong Kong. It was the first foreign bank to settle  cross-border renminbi trade in the country; the first bank to offer a  renminbi trade finance standard rate in Hong Kong; and the first bank to  issue a renminbi cashier’s order in Hong Kong.
Hungary
K&H Bank
Banking conditions in Hungary remain exceptionally difficult, as  default rates on retail loans extended in foreign currencies to take  non-performing loans (NPL) for most banks into double figures. A one-off  bank tax has further eroded profitability, and the latest government  plan to convert some foreign currency mortgages into Hungarian forints,  combined with an exchange rate that is deeply unfavourable to the banks,  pose an additional threat.
Any bank would struggle in the face of  such headwinds, but K&H Bank seems to have handled the crisis  better than its competitors, with a 171% rebound in profits in 2010.  Despite the poor business conditions, operating profit before provisions  and the one-off bank tax stayed relatively stable in the first half of  2011. And while provisions are rising, K&H’s NPL rate of 8.6% in  2010 was well below the national average, and the best among Hungary’s  top five banks.
The bank cut costs by 3% in 2010, and streamlined  its corporate banking franchise by shifting the smallest businesses into  its retail segment, while maintaining a low churn rate of small  business customers. The most successful retail product is the Zero  account, which waives account fees for retail customers if they pay in  their monthly salary to the bank. This attracted a 6% increase in  customers using K&H for their salary deposits, which also provided  opportunities to convert more customers into other longer-term savings  products that generate extra income and more stable funding for the  bank.
Similarly, while loan demand among small businesses has  fallen sharply, K&H is gaining market share. The bank was the first  to participate in the EU’s Jeremie small business financing programme,  and trained up 600 members of staff to bolster its small business  lending presence. This has helped attract 1400 new small business  clients, and its share of new loans under E1m is higher than its  existing market share.
India
Axis Bank
 
 
 
 
Shikha Sharma, managing director and CEO, Axis Bank
Axis Bank is one of the fastest-growing banks in the Indian market in  terms of size and profitability. In the past financial year, the bank’s  net profit increased by nearly 35% to Rs34bn (653m) compared to Rs25bn  the year before. The banks assets also grew, year-on-year by 34% to  Rs24bn from Rs18bn.
The Indian banking market has had its  pressures in the past year, as Shikha Sharma, managing director and CEO  of Axis Bank, explains: “Tight liquidity conditions and rising cost of  funds were the main challenges faced by the bank. Uncertainties in the  global financial markets were compounded by domestic inflationary  pressures, which engendered a high interest rate environment.”
However, the bank has been able to gain market share and has performed well in terms of profitability.
“We  have consistently achieved a healthy growth of business and  profitability despite the period of stress in the environment. Our core  businesses have grown well, generating diversified streams of revenues  that have translated into robust margins and return on assets,” says Ms  Sharma.
The bank is also well positioned to capitalise on the  growth story of India. Ms Sharma says: “We will continue to strengthen  our retail deposit franchise and also focus on areas in which the bank  was previously under-represented such as retail lending. While the bank  has a business composition that is well positioned to leverage the  growth potential in the country, we are also viewing transactional  banking and payments as a major area.”
One example of a payments  service is the 2010 launch of Instant Money Transfer, which facilitates  payments to unbanked people in India. Money can be withdrawn at an ATM  with a mobile phone, which is used to receive all the information about  the remittance.
Indonesia
Bank Rakyat Indonesia
Bank Rakyat Indonesia’s growth in the past year has mirrored the economic growth seen throughout Indonesia.
As  the country’s rapid economic development takes hold, BRI is well  positioned to be part of that growth as it specialises in lending to the  micro, small and medium-sized enterprises (MSMEs). While it makes  commercial sense for BRI to take advantage of its extensive network –  which covers micro branches in the far-flung islands of the Indonesian  archipelago – the micro lending also serves to be the backbone of the  country’s economic growth.
More than 90% of Indonesian  entrepreneurs can be classified as MSMEs, a segment that proved to be  resilient to the Asian financial crisis in 1998 and more recently the  global crisis in 2008.
BRI has continued to serve this segment  and has expanded aggressively over the past years. While the bank has  been a leader in the micro lending segment because of its expansive  network, it recognises the huge potential of these micro businesses as  they continue to grow along with the Indonesian economy.
At the  end of 2010, BRI had 7004 outlets and the growth of its micro loans has  increased seven-fold in the past 10 years, from Rp9840bn ($1.1bn) in  2001 to Rp7540bn at the end of 2010. At the end of the second half of  2011, BRI was the largest lender in Indonesia and 80% of its loans were  to MSMEs.
In recent months, BRI has been improving the efficiency  of its operations, with many working online in real-time. It has also  established even smaller outlets as part of its network, which it  describes as ‘sub-micro outlets’ so that the bank’s workers can access  the traditional markets that have so far been untouched by banking  services and have traditionally been the territory of loan sharks.
Iran
Parsian Bank
Since beginning operations in January 2002, Bank Parsian has seen continuous growth and is today Iran’s largest private bank.   
The  bank achieved impressive growth across all key financial indicators in  2010. Net profits for the year increased by an impressive 41% to $531m,  while assets grew 23% to $25.6bn. Tier 1 capital – the core measure of a  bank’s financial strength – surged by 33% to $1.95bn.  
During  2010, Parsian was responsible for about 8% of total deposits and 7% of  total loans within the Iranian banking system. This equated to a  respective 36% and 25% market share among privately owned banks.
On  the retail front, Parsian opened 42 new branches in 2010. The bank is  also helping to pioneer the use of e-banking services in Iran – which  are still largely underpenetrated – with about 72% of all Parsian’s  transactions being processed via e-channels in 2010. In September 2010, a  10% stake in Parsian E-Commerce, the e-banking subsidiary of Parsian  Bank, was successfully sold on the Iranian over-the-counter market in an  initial public offering worth $116m.
Looking forward, the bank  wants to become more engaged with modern Islamic financial activities  and also move into the nascent investment banking sphere, for which  licences only started to become available in 2007.   
“We believe  that an active presence in the field of modern Islamic banking, such as  the issuance of sukuk [Islamic bonds], will provide the bank with a  promising opportunity to develop its financial activities in the coming  year,” says Ali Soleymani Shayesteh, managing director of Parsian Bank.  “We are also determined to add an investment bank to Parsian financial  group.”
Israel
Bank Hapoalim
 
 
 
 
Zion Kenan, chief executive, Bank Hapoalim
Bank Hapoalim was the only one of Israel’s largest banks  significantly exposed to US subprime securities, and was further damaged  by allegations of fraudulent loans made to a former chairman. But Yair  Seroussi, appointed as the bank’s chairman in mid-2009 after the  country’s regulator demanded a change at the top, has reshuffled the  management team and reshaped the bank’s strategy. In the past 18 months,  Bank Hapoalim’s transformation has begun to pay off.
Profits  soared by 69% in 2010, taking the bank back to double-digit return on  equity in line with its target. The performance continued into the first  half of 2011, with Hapoalim recording the highest profitability in the  sector. The bank also increased its capital adequacy beyond the 12.5%  recommended by directors, to 14.1%, putting it in a position to protect  itself from the risk of the global economic recovery faltering.
“During  the year, Bank Hapoalim regained its undisputed leadership in the  Israeli banking sector by executing its strategic plan, focusing on its  core franchise and laying a foundation for sustainable double-digit  returns. The bank also continued its technology leadership, as our  website was again recognised as best in Israel, and we expanded our  mobile banking activity,” says chief executive Zion Kenan.
The  bank has launched a string of innovative iPhone applications, including  one that allows money transfers between iPhones by touching them  together, and another that lets the account holder photograph a utility  bill which will be automatically paid. Clients can also access their  account from around 100 other mobile devices. In a country of about 7.5  million inhabitants, Hapoalim’s online banking now has some 850,000  users who perform about 1.3 million information queries per day.
“In  Israel, the bank will explore untapped retail opportunities and  continue to lead the corporate credit market, while further expanding  its global reach,” says Mr Kenan.
Italy
Intesa Sanpaolo
 
 
 
 
Corrado Passera, CEO, Intesa Sanpaolo
A big question mark was still hanging over Italy as The Banker went  to press on its awards edition. Would it muddle through or would it fall  under the vicissitudes of the markets and require an enormous bail-out?
Italian  banks have had to plan for any eventuality and Intesa Sanpaolo  successfully raised its capital so that it is already Basel  III-compliant with a 10% common equity ratio – eight years ahead of  schedule.  
CEO Corrado Passera says: “As Intesa Sanpaolo is for  many investors a proxy for Italy, we have had the challenge of the  negative sentiment towards the country in the market, which in no way  reflects the strong fundamentals of the bank. The ineffective management  of the sovereign debt crisis so far has left both Italy and Europe in  need of firmer measures to boost economic growth and restore  confidence.”
Despite this, Intesa Sanpaolo continued to grow its  business, and its capital and liquidity positions remained strong.  Dividend policy has not been revised. With a presence in 40 countries,  the bank plays a key role in supporting the international strategy of  Italian companies both big and small. China has been a central focus in  recent months.
The bank’s commitment to small and medium-sized  enterprises is demonstrated by the Intesa Sanpaolo Start-Up Initiative,  which transforms technological ideas into business plans, raises capital  and finds investors. Since its launch two years ago, 600 start-ups have  benefited. Overseas, the bank’s Egyptian subsidiary Bank of Alexandria  has been very busy in the microcredit space.
Jamaica
National Commercial Bank Jamaica
 
 
 
 
Patrick Hylton, group managing director, NCB Jamaica
National Commercial Bank Jamaica closed 2010 with high net profits,  larger assets and a stronger capital base. The bank launched new  products, improved efficiency and took actions to limit the growth of  non-performing loans. A new credit card was launched, the branch network  was rationalised, new training programmes have been created for  employees, and customers who may have struggled to meet their loan  repayments were given advice on alternative ways to manage or offset  banking fees.
Patrick Hylton, group managing director at NCB  Jamaica, is proud of the bank’s successes. “National Commercial Bank  Jamaica reported net profits of $11.07bn for the [2010] financial year,  an 8.1% increase over the prior financial year; this meant we ended the  year as the most profitable listed company on the Jamaica Stock  Exchange,” he says.
The strategy for next year remains similar,  adds Mr Hylton, but considering the changing conditions of international  financial markets, there will be a greater push on specific products.  “We remain focused on all product areas, [but] in light of a significant  drop in market interest rates over the past year and a subsequent  narrowing of spreads, we remain particularly focused on growing our loan  and credit card portfolios and diversifying into non-interest-sensitive  products, such as unit trusts and other collective investment schemes,”  he says.
“In line with enhancements to the local securities  regulatory regime, we [also] plan to introduce a new securities product  within the next year.”
Japan
Mizuho Financial Group
 
 
 
 
Yasuhiro Sato, CEO, Mizuho Financial Group
The earthquake and subsequent nuclear accident have dominated much of  the coverage of Japan this year. Mizuho Financial Group’s CEO Yasuhiro  Sato says that the incident has been one of the major challenges for the  organisation in the past year.
“Despite this, our net income  achieved more than 80% against the full-year earnings estimate. We are  making a full-scale effort to assist our customers and the damaged  region as well as to contribute to the recovery of the business  community,” says Mr Sato.
Another feature of the bank’s activities  in the past year is its transformation plan. The plan, dubbed ‘Mizuho’s  Transformation Program’ is a medium-term policy that focuses on  improving profitability, its financial base and its front-line business  capabilities.
Another of the organisation’s plans is to bring a unified management structure to the group, turning Mizuho into “one bank”.
As  part of this effort, in April 2011, Mizuho announced that it intended  to turn its listed subsidiaries – Mizuho Trust & Banking, Mizuho  Securities, and Mizuho Investors Securities – into wholly owned  subsidiaries of Mizuho Financial Group through a share exchange. “The  integration of our banking subsidiaries will be in order to realise  optimisation for the entire group, invigorate the organisation and to  improve our management efficiency,” says Mr Sato.
Mizuho has also  been focusing on the rest of Asia, and in November 2010 opened the  Suzhou branch of Mizuho Corporate Bank (China). In November 2010, Mizuho  acquired shares in asset management firm BlackRock and later signed a  business alliance agreement with the firm for strategic co-operation in  Japan and Asia.
Jordan
The Housing Bank for Trade and Finance
The Housing Bank for Trade and Finance (HBTF) performed  noticeably well compared with its Jordanian peers in 2010 on the back of  improved credit and investment policies and an increased focus on its  core competencies – mainly in the area of retail banking.
The  bank’s net profits after tax grew by 32.9% to $125m, while its total  assets grew by 9.7% to $9.42m. HBTF has also continued to maintain a  good liquidity ratio of 182%, well above the 100% stipulated by the  Central Bank of Jordan (CBJ). The bank’s capital position has therefore  remained strong, with a capital adequacy ratio of 22.5%, (more than the  12% required by the CBJ), and a Tier 1 ratio of 22.45%, again higher  than the 6% set by the central bank.   
The bank’s strength in  retail banking was evident in that more than 45% of its gross income in  2010 was derived from retail-related activities – its customer base (in  excess of 900,000) represents more than 50% of Jordan’s bankable  population. Furthermore, the bank has positioned itself as a market  leader in the trade finance business, with a market share of more than  16% of letters of credit.   
As part of its plan to strengthen its  presence in overseas markets and diversify its sources of revenue, HBTF  acquired a 63.75% stake in the London-based Jordan International Bank  in a deal worth $32m. It subsequently raised its capital to $56m, with  HBTF’s stake growing to 68.57% by the end of December 2010.
HBTF  also increased the capital of the International Bank for Trade and  Finance – a subsidiary in Syria – by 67% to $103m, of which the bank now  owns 49% to support its growth potential there.
“We compete  strongly on the quality and pricing of products and services we offer.  We have the largest network of branches and ATMs in the kingdom and we  invest heavily in our staff and banking technology,” says Dr Michel  Marto, chairman of HBTF. “Key opportunities lie in project finance,  retail and regional operations,” he adds.
Kazakhstan
Halyk Bank
Kazakhstan’s second largest bank truly emerged from the financial  crisis in 2011, with a $500m 10-year Eurobond deal in January marking  the first offering by a Kazakh bank since the crisis began to bite in  2008. The bank’s market-leading deposit base gives investors confidence  in its funding position. And in May 2011, the bank used its surplus  capital to repay the 20% equity stake taken in Halyk by Kazakh sovereign  wealth fund Samruk-Kazyna to stabilise the bank in January 2009.
“Thanks  to strong earnings, we now account for more than half of the banking  sector’s net income, and Halyk is the first and so far the only bank in  Kazakhstan that has repaid government capital provided in 2009,” says  chief executive Umut Shayakhmetova.
Profits were up 128% in 2010,  and 99% in the second quarter of 2011. While the real estate market and  credit conditions in Kazakhstan remain subdued, Halyk has focused on  increasing its fee and commission income, especially in the retail  segment. The bank has the largest number of active payment cards, and  has secured tie-ups with online retailers. In addition, payroll  processing clients rose 3.3% in 2010, strengthening the bank’s leading  position in providing this service to companies and their staff.
“Most  of our growth was technology-intensive, including advancements in  mobile and internet banking solutions and payment cards. In the second  half of 2011 we managed to increase our net interest margin by improving  funding structure. We aim to actively grow our loan portfolio in 2012,  continue expanding fee and commission business, and preserve the leading  position in the market,” says Ms Shayakhmetova.
Kenya
Co-operative Bank of Kenya
 
 
 
 
Gideon Muriuki, managing director, Co-operative Bank of Kenya
Co-operative Bank of Kenya has come a long way in the past 10 years.  In 2002, it was at rock bottom following a loss of almost $30m. By the  end of 2010, it was the third biggest commercial lender in Kenya by  assets, having made a net profit of Ks4.6bn ($59m) during the year. That  amounted to a return on equity of 28% and was 54% higher than its  earnings in 2009.
Much of Co-operative Bank’s success in 2010 was a  result of its diversification in the past few years. It is now truly a  universal bank, with substantial market shares in corporate banking,  retail banking, stock-broking, fund management, advisory services,  mortgages (which it started providing in the past 12 months) and  insurance. “We have really focused on the diversification of our  products,” says Gideon Muriuki, Co-operative Bank of Kenya’s managing  director.
Thanks to this diversification, the lender has rapidly  built up its retail customers. It now has about 2.3 million of them,  having had 1.2 million a year ago. Its branch network has also expanded.  “We have 91 and we want to open more,” says Mr Muriuki. “We plan to  reach 125 during the course of next year.”
In retail banking,  Co-operative Bank has focused heavily on improving its technology. Key  to this is its mobile banking platform, which was upgraded during the  year.
The lender has also been at the forefront of small and  medium-sized enterprise banking in Kenya. It has developed several  products aimed at different types of borrowers, including loans for  female entrepreneurs and group loans.
Next year regional expansion  will be high on Co-operative Bank’s agenda. It plans to start operating  in South Sudan, which borders Kenya and gained its independence from  Sudan in July. “South Sudan has huge potential,” says Mr Muriuki. “We  want to go in as a bank that services rural areas.”
Kosovo
ProCredit Bank Kosovo
 
 
 
 
Philip Sigwart, chief executive, ProCredit Bank Kosovo
Even in difficult economic conditions, return on equity at ProCredit  Bank Kosovo remains an impressive 32%. And while non-performing loans  are rising, they remained very healthy by local standards, at 2.3% at  the end of 2010. The bank operates with a development mandate rather  than for shareholder returns. But its balance sheet strength is crucial  to help build its resources for further lending to local small and  medium-sized enterprises (SMEs), which constitute 75% of its total  portfolio.
“While we have a very clear development focus and never  put profits first, the returns for our shareholders were high in  Kosovo. Our bank is an example that an institution with a strong  development focus and a long-term vision can be commercially very  successful,” says Philip Sigwart, chief executive of ProCredit Bank  Kosovo.
The bank has increased its number of ATMs as well as  introducing a new ATM-based product, Kos-Gyro, which allows customers to  pay utility bills at ProCredit Bank ATMs by using newly installed  barcode scanners. Despite this investment, the cost-to-income ratio  declined in 2010, to 46% from 49%. And the bank maintained the momentum  of its lending to SMEs, with assets up by just under 7% in 2010, despite  the challenge of finding good-quality clients in tough times. This  maintains the bank’s status as the largest and most active in Kosovo.
“Despite  the difficult macroeconomic and political environment in Kosovo, we  continue to believe in the long-term potential of the region. Therefore,  we will continue to invest in training our staff, expanding our branch  network and introducing new technologies,” says Mr Sigwart.
Kuwait
National Bank of Kuwait
National Bank of Kuwait’s (NBK) solid core business income  streams, high asset quality and sustained cost controls have ensured  that the bank continues to deliver very strong results despite the  protracted global financial crisis. Profitability remained strong in  2010 with the bank recording a 14% rise in profits to Kd302m ($1.09bn), a  return on assets of 2.4% and return on equity of 16%.
Its Tier 1  capital rose 24% during 2010 to Kd1.47bn and risks remained well  managed, with capital adequacy standing at a healthy 18.3%, while  non-performing loans declined from 1.8% in 2009 to 1.6% in 2010.   
With  NBK’s market share continuing to grow both on the consumer and  corporate sides of the business, it has continued to strengthen its  leading position in the country. It remains the largest bank in the  country with assets of Kd12.8bn.
By growing its stake in Kuwait’s  Boubyan Bank over the past few years, NBK has made a strong move into  Islamic banking. It increased its share ownership in Boubyan to 47.3% in  May 2010. This has helped diversify income, given that Islamic banking  has been gaining strength in the Kuwaiti market in recent years,  comprising one-third of assets and deposits as of June 2011.   
Working  closely with the management of Boubyan, NBK has positioned the bank so  that it is able to compete with bigger local rivals. It is now emerging  as a serious player in the Islamic banking market following an extensive  restructuring plan initiated by NBK.   
“NBK continues to reap  the benefits of a conservative strategy and strong risk management  practices,” says Ibrahim Dabdoub, group chief executive of NBK. “Our  asset quality remained outstanding by all international standards and  consequently our revenue growth filters to our bottom line.”
In  the first half of 2011 NBK has sustained its strong performance,  delivering net profits of Kd146.7m – contributing half of the Kuwaiti  banking sector’s profits.
Kyrgyzstan
Demir Kyrgyz International Bank
 
 
 
 
Sevki Sarilar, general manager, Demir Kyrgyz International Bank
Despite political upheaval and rising security risks in Kyrgyzstan in  2010, Demir Kyrgyz International Bank increased its profits by 26%, and  improvements continued into 2011. Corporate and small business loans  rose by more than 4% in the first quarter of 2011, while the  non-performing loan (NPL) ratio declined from 5.1% to 4.5% in the same  period – compared with a system average of 13.6%.
“Demir Bank  continued to support the business and economy of the country by offering  attractive conditions for loans and tailor-made products. However, we  also had to adjust our credit policy by choosing a careful and  thoughtful approach,” says Demir’s general manager, Sevki Sarilar.
The  perception of safety and good customer service allowed Demir Bank to  attract deposits, which were up 32% year on year in the first quarter of  2011, despite the bank offering the lowest deposit interest rates in  the sector. And the bank also won a $3m multilateral credit line to help  co-finance projects for larger clients, as well as additional credit  lines for trade finance.
The retail banking segment is also  growing, with retail customers up 36% year on year in the first quarter  of 2011, credit cards issued rising 16% and debit cards up 30%. Demir  Bank has also become the first in Kyrgyzstan to arrange loyalty and  discount programmes for its cardholders, applicable at about 150  retailers across the country.
“The bank continued to make  investments in information technology, ATMs and the cards business, and  introduced new banking products to the market, retaining our leading  position in the cards market with a 51% share [in the country]. We will  now focus on increasing our lending activity and presence on the market  by extending branch, ATM and points-of-sale networks and introducing new  banking services,” says Mr Sarilar.
Laos
Banque Pour Le Commerce Exterieur Lao
 
 
 
 
Sonexay Sitphaxay, CEO, BCEL
Banque Pour Le Commerce Exterieur Lao (BCEL) has gone through a  transformation in the past year, from a state-run to a publicly owned  bank, and is the first bank in Laos to register on the Lao Securities  Exchange.
“We have put tremendous effort to improve our service,  governance and structure to become a public bank and let people in the  society share ownership of the bank,” says Sonexay Sitphaxay, CEO of  BCEL.
The government put 30% of the shares in the bank up for  sale; 20% for local investors and staff and 10% to a strategic partner.  The change has pushed the bank into the next stage of its development,  and BCEL’s focus has included developing its service network as well as  its products.
“A rapid increase of banks in the past year, as  well as increased competition in the Lao banking industry, have  challenged our strategies. However, we have persisted on introducing new  services to attract customers with reasonable fees,” says Mr Sitphaxay.  “We are improving our core banking system to international standard in  order to provide advanced banking for our customers,” he adds.  
Mr  Sitphaxay notes that the bank has been able to expand its service  network to cover the whole of Laos, which has meant that the bank saw a  growth in deposits of 39% in 2010.
The bank has expanded its  international network. It has also invested in its business with  Cofibred, a subsidiary of the French bank BRED Banque Populaire. It has  also invested in the joint venture Lao-Viet Insurance Company.
Latvia
SEB Banka
 
 
 
 
Ainars Ozols, chief executive, SEB Banka in Latvia
No country in Europe suffered a deeper recession in 2009 than Latvia,  but SEB Bank weathered the storm and returned to profit in 2010.  Non-performing loans remain painfully high, but the bank is now getting  to grips with its cost base, bringing down its cost-to-income ratio to  43% in the first half of 2011, from 59% in 2010. And in the second  quarter of 2010, its credit portfolio finally began growing again after  nine quarters of contraction.
“SEB in Latvia has continued to  develop sound lending by carefully analysing customers’ solvency and  granting funding to reasonable and well-considered projects. SEB  strengthened its leading positions in the Latvian pension and long-term  savings market, despite the complex economic situation and decreased  level of income in the country,” says Ainars Ozols, chief executive of  SEB Banka in Latvia.
SEB has improved processes to shorten the  period for loan approvals, and has upgraded internet banking facilities  to include dynamic data authentication on bank cards and e-signature  capabilities to facilitate applications for new banking products.
The  bank has also made efforts to support the country’s economic recovery,  including an initiative to encourage its established clients to assist  companies created in the past year. And SEB signed a deal with the  European Investment Fund in 2010 to extend up to E44m to Latvian small  and medium-sized enterprises (SMEs). By the first half of 2011, the bank  had extended funds to more than 2400 SMEs, of which more than 1600 were  newly established companies.
“The priority for SEB is to  strengthen client relationships and to strive for excellence in service –  speed, quality and professionalism of service. SEB will offer more  beneficial solutions and fees for financial services to clients who have  selected SEB as their home bank,” says Mr Ozols.
Lebanon
Blom Bank
 
 
 
 
Saad Azhari, chairman and general manager, Blom Bank
Blom Bank achieved the highest profitability ratios among  Lebanese-listed banks in 2010, earning a return on average equity and  return on average assets of 18.67% and 1.44%, respectively. It also  reported a healthy 7.93% rise in assets to $22.34bn in 2010 and a  respective 12.83% and 11.61% rise in net profits and Tier 1 capital.
In  January 2010, in recognition of the fact that Lebanese banking has  historically favoured middle-market traders and businessmen, Blom  launched a simple real estate-based loan product to help small  businesses expand into new locations. At the end of 2010, the product’s  loan portfolio stood at $9.9m, with an average loan amount of $154,000.  By June 2011, these figures had risen to $19m and $174,000,  respectively.  
Blom also created a syndication and structured  loans department within its corporate banking division in December 2010  to focus on complex and large loans, many of them regional.
According  to Saad Azhari, Blom’s chairman and general manager: “The main  challenges to Blom Bank have been the operating environment,  characterised by financial and debt crises globally, as well as  political upheavals regionally. These developments caused the bank and  the entire Lebanese banking system to grow at less than [they have in]  the past three years.”  
However, the bank’s conservative business  model and sound risk management have allowed it to weather these  challenges and to continue with its measured growth.
“We believe  that the region – the current political upheavals notwithstanding – is  rife with opportunities in the medium to long term, given its favourable  demographic and economic growth prospects,” says Mr Azhari.
“We  look to further our presence in the countries we are already in and in  new countries in the region, providing banking and financial services  that [fit] both the market potential and our comparative strength.”
Lesotho
Standard Lesotho Bank
 
 
 
 
Mpho Vumbukani, head, Standard Lesotho Bank
Economic growth in Lesotho has been muted in the past two years. But  despite this, Standard Lesotho Bank, a subsidiary of South Africa’s  Standard Bank, has managed to achieve very high profits. In 2010, net  profits rose 7% to 164m maloti ($21m). This was a huge return on equity  (ROE) of 45%, and followed an ROE of 52% in 2009.
Standard Lesotho  Bank managed to attain this profitability while maintaining strong  levels of capital. Its assets grew 16% in 2010 to 4.8bn maloti, while  its Tier 1 capital rose 20% to 395m maloti.
The bank has also  managed to keep expenses on a tight lease. Its cost-to-income ratio in  2010 was a low 49%. Its non-performing loans, moreover, amounted to just  1.4% of its portfolio at the end of the year.
Part of the  lender’s success amid a sluggish economy has been a result of easing  conditions for providing working capital loans to small and medium-sized  enterprises (SMEs). Following research done at Harvard University, the  bank now uses psychometric testing to assess some potential SME clients.  This requires no paperwork on the part of borrowers and allows the bank  to supply unsecured loans, which is a big help in a country where many  SMEs lack collateral.
Mpho Vumbukani, head of Standard Lesotho Bank, says that such SME lending will be one of the bank’s priorities next year too.
Also  in the past year, Standard Lesotho Bank won the mandate to manage a big  proportion of the government pension fund after it was privatised.
Luxembourg
BGL BNP Paribas
 
 
 
 
Eric Martin, CEO, BGL BNP Paribas
The current economic environment is far from ideal for any bank  carrying out an  integration. Despite this, BGL BNP Paribas managed to  complete the integration of 500 business activities with less than a  year’s preparation. The icing on the cake has been the upgrading of the  bank’s financial strength rating in September. The bank’s solvency ratio  is now a healthy 23.1%.
BGL was originally part of Fortis, which  failed in late 2008 and has now been merged with BNP’s Luxembourg  operation. Net banking income for 2010 of E797.6 m included a  contribution of about E141 m from BNP Paribas Luxembourg, which has been  consolidated from 25 February 2010.
All along, BGL BNP’s emphasis  has been on client service. The Luxembourg retail and corporate banking  business line posted net banking income of E318 m, with lending up 6.5%  for individual clients and 3.9% for professionals. Income from  bancassurance operations rose by 29%. BGL BNP Paribas is Luxembourg’s  top private banker with assets under management rising 6% last year.
CEO  Eric Martin says: “We feel that our main success was to manage a  successful integration of BGL and BNP Paribas with less than one year’s  preparation. More than 600 people worked in shifts over 56 consecutive  hours to coordinate and complete the merger of 500 multi-business and  multi-entity activities. In addition to this major achievement, we have  enlarged our offer by developing innovative products and services and  managed to improve our financial strength rating.”
Macao
ICBC (Macau)
 
 
 
 
Zhu Xiaoping, chairman of the board, ICBC (Macau)
ICBC (Macau) has been operating in an environment that has seen  growth in recent months in terms of the number of visitors, property  sales and infrastructure projects that have been approved. The bank  coped with this rapid development with a share issue in 2010 and  expanded its business in the local credit market to become the arranger  of major syndications, which has generated an increase in its fee  income.
ICBC (Macau) has worked to improve its capital strength,  enhance its network and channels and diversify its products and  services. Part of the new business ICBC (Macau) has been working on is  being involved in the renminbi business, which has been growing  exponentially in the past year. “We seized the pre-emptive opportunities  of renmnibi business development in Macao,” says Zhu Xiaoping, chairman  of the board of ICBC (Macau).
Because of the strength of its  parent company, ICBC (Macau) can draw on the IT platforms and systems  that have been developed by the group. Mr Zhu says that one of the major  achievements of the bank over the past year has been to converge with  the internationalisation of ICBC Group.
“Macao not only served as  an economic co-operation platform, but also played an important role in  the financial communication between China and Portuguese-speaking  countries. Our bank will make complete use of this advantage and grasp  the opportunity of the central government’s policy to develop [the  island of] Hengqin. We will also focus on the retail business and  renminbi business in Macao as well as affording global financial  services to mainland enterprises,” says Mr Zhu.
Macedonia
Komercijalna Banka AD Skopje
 
 
 
 
Hari Kostov, chief executive, Komercijalna Banka
The Macedonian central bank urged local banks to increase capital  levels last year, and Komercijalna Banka successfully raised E15m in  February 2011. Investor interest in the bank is understandable, given  that the bank earned about 60% of all profits in the Macedonian  financial sector in 2010, with return on equity rising more than two  percentage points to 17.9%.
“We are proud to say that in 2010 the  bank has continued the trend of stable and profitable performance. The  gross profit was 33.2% higher than the profit realised in 2009, assets  grew by 16.7%, deposits by 16.6% and loans to customers by 5.1%,” says  Hari Kostov, chief executive of Komercijalna Banka.
The bank has  been increasing its branch and ATM network, especially outside of  Macedonia’s capital city of Skopje, while strengthening its technology  offering. Completed projects include allowing card PIN changes and  payments to mobile phone providers through the bank’s ATMs, as well as  beginning to exchange data with a newly established Macedonian Credit  Bureau.
The bank has a strong 30% share in small business banking,  reinforced over the past year through a credit line for E23m from the  European Investment Bank, and loans worth E196,000 from the  International Fund for Agricultural Development. Continued lending in  Macedonia’s real economy has been facilitated by good risk management,  which allowed non-performing loans to fall to 5.4% in 2010, from 6.2% in  2009.
“The bank will continue preserving portfolio and deposit  base stability, under the pressure of external instability caused mainly  by the debt crisis in Europe. It will further improve and modernise its  operations, introduce new banking products and services, develop new  modern banking functions, advance its e-banking and information  technology and maintain and increase its market share, thus providing  long-term sustainability, profitability and growth,” says Mr Kostov.
Malawi
Standard Bank
 
 
 
 
Charles Mudiwa, head, Standard Bank in Malawi
Malawi’s banks have faced worsening conditions in the past 18 months.  A dire shortage of foreign currency has resulted from weak sales of  tobacco (by far Malawi’s biggest export) and donors cutting aid in  response to worries about a deteriorating political environment (19  people were killed by police during riots in August over fuel shortages  and economic mismanagement).
“The main export, tobacco, performed  dismally, which constrained supply of foreign exchange into the  import-dependent economy,” says Charles Mudiwa, head of Standard Bank in  Malawi. “The situation worsened when donors unplugged budgetary support  over concerns about economic and political maladministration.  Consequently, the bank struggled in financing import trade.”
Standard  Bank’s profits fell 15% in 2010 to K2.4bn ($16m) partly as a result of  these problems. But it still attained a high return on equity of 25% and  a return on assets of 6.6%, one of the highest levels in Africa.
Standard  Bank did this largely by focusing on corporate banking. It carried out  more than $100m-equivalent of structured trade and commodity finance  deals with tobacco merchants, while $27m was disbursed to a fertiliser  subsidy programme and $21m of medium-term financing was provided to two  telecoms firms.
Next year, the lender is keen to target other  growing industries. “Malawi has a number of emerging sectors such as  mining, textiles and tourism,” says Mr Mudiwa. “So the bank will  strengthen business connections with the players in these sectors. And  personal lending and agriculture financing will receive special  attention.”
Malaysia
Public Bank
Malaysia’s banks are competing in a market where competition is intensifying and interest margins are narrowing.
“Despite  these challenges, Public Bank delivered another year of solid profit  growth on the back of sustainable revenue growth, efficient cost  management and superior asset quality, while maintaining prudent banking  practices,” a senior executive at the bank says.
In 2010, the  bank’s net profit grew by 21.1% to RM3.05bn ($957.8m) from RM2.52bn in  2009. Public Bank’s domestic loans grew by 14.5% and growth in customer  deposits was 14.8% for the same period.
The bank’s management  states that it maintained a leading position in domestic lending.  Residential mortgages, commercial property loans and vehicle financing  have market shares of 17.7%, 34% and 25.8%, respectively.
The bank also performs well compared to its peers in terms of return on equity, asset quality, productivity and cost efficiency.
Its  strategy is to keep retail consumer and commercial banking as its core  focus. Public Bank has set itself service delivery standards such as the  standard waiting time and the turnaround time to process, approve and  disburse a loan. In 2010, 78% of the branches achieved the two-minute  standard waiting time.
As well as continuing to promote consumer  lending, Public Bank aims to continue to expand the scale and scope of  its fee- and transaction-based revenue to sustain long-term  profitability growth and a high return on equity.
The bank has  launched a number of initiatives to further expand its business. This  includes ING Public Takaful Ehsan, a joint venture with ING that  provides sharia-compliant family insurance. This joint venture is  expected to expand Public Bank’s fee-based revenue activities.
Mali
Ecobank Mali
Ecobank Mali came through 2010 strongly. Its net profits rose 25%  to $10.7m, following an already impressive 9% growth in net earnings in  2009.
The bank’s asset base expanded 12% in 2010 to $532m. But it  increased its Tier 1 capital by slightly more – 15% – to bring it to  $39m and strengthen its capital position.
Ecobank’s profits for  2010 amounted to a hefty return on equity of 27%. It has managed to  attain steady (and high) returns over the past few years, having made  returns on equity of 25% and 29% in 2009 and 2008, respectively.
Importantly,  the bank boosted its productivity in 2010 by reining in costs. This led  its cost to income ratio to fall from 63% in 2009 to 58% in 2010.  Ecobank says that cutting operational costs was one of its main goals  last year. It has continued doing this in 2011, which will likely  increase its profitability over the long term.
The bank enhanced  its coverage of the small and medium-sized enterprise market in 2010. It  introduced ‘Product Programs’ that are personalised for different  businesses. These include ‘PP Equipment’, which provides companies with  equipment financing.
Ecobank launched new products to boost its  fee-based revenues. Among those was its ‘Rapid Transfer’ service, which  allows for immediate transfers of money between any two Ecobank  branches, including those outside Mali. The service is available to  anyone, including non-account holders.
Malta
HSBC Bank Malta 
 
 
 
 
Alan Richards, CEO, HSBC Bank Malta
Around Europe these days, few banks are notching up 20%-plus returns  on equity (RoE) but in Malta,  HSBC came in with an impressive 24.9%  RoE. In addition to this, net profits grew 16.7% while Tier 1 capital  grew by 5.6%.
CEO Alan Richards says: “HSBC Bank Malta has  managed to deliver an exceptional performance across all businesses and  continued to offer security and peace of mind to its customers despite  the difficult environment. This reflects the soundness of our business.  The bank remains committed to putting the customer at the centre of  everything it does and to deliver a high-quality service. We remain at  the forefront of Maltese financial services as the leading international  bank in Malta and continue to deliver the best value for our  shareholders.”
As a way of enhancing the customer experience the  bank took measures to improve systems, streamline processes and use the  latest technology. An initiative called ‘Programme Impatt’ was started  in 2010 to upgrade functions and services – as a result many customers  are using automated channels for their everyday banking needs.
While  Malta is developing as an international financial centre, HSBC Bank  Malta has not lost sight of the needs of local clients. The bank is  active in the small and medium-sized enterprise market and secured €100m  from the HSBC global $5bn international fund to support local  businesses.
Interim results for 2011 show that the strategy is  continuing to produce good results, with an even higher RoE of 28.6%, an  improved cost-efficiency ratio (44%) and a further rise in profits of  more than 19%.
Mauritius
Barclays Mauritius
 
 
 
 
Ravin Dajee, managing director, Barclays Mauritius
Barclays Mauritius has had a profitable past few years. Its pre-tax  earnings in 2010 were MRs2.4bn ($79m), amounting to a return on equity  of 27%.
The bank was able to achieve such a high profitability  despite its assets rising only 7% during the year to MRs92bn (it boosted  its capital buffer significantly, however, growing its Tier 1 capital  by 50% to MRs7.6bn).
Barclays did this partly by exploiting  Mauritius’s status as a hub for offshore companies. The island has  double taxation treaties with many emerging markets in Asia and Africa,  and the ability of Barclays Mauritius to link its customers with its  parent company’s wide network in these regions has been beneficial.  Barclays Mauritius’s offshore arm now accounts for 60% of its business.  “If a UK corporate wants to invest in Africa, it makes huge sense today  to incorporate the company in Mauritius and invest from here,” says  Ravin Dajee, managing director of Barclays Mauritius. “Having a network  in Africa is a huge selling point for us. We’ve managed to connect our  customers to different businesses in Africa.”
Yet Barclays has  also boosted its onshore activities. In particular, it has been at the  vanguard of banks’ efforts to improve the access to credit for small  businesses, which make up about 35% of the Mauritian economy and employ  40% to 45% of its people. Barclays, about 30% of whose loans are to such  companies, has taken several initiatives in this regard, including  hosting seminars about small and medium-sized enterprise (SME) banking  and offering a wider array of products to borrowers, such as bundled  current accounts and supply-chain finance.
Barclays admits that  lending to SMEs is risky, given their often poor governance structures  and lack of assets. But it has kept its non-performing loans ratio to  less than 1% in recent years and believes that this figure can be  sustained.
Mexico
Banorte
Amid a worsening of the global financial markets and widespread  economic decline, Mexico and its banks provided one of the few positive  stories of 2010. The country’s economy is recovering from the impact of  the US’s slowdown, and its banking system has grown into a solid and  strongly supervised market.
Banorte’s net profits grew by 15% in  2010 and return on equity was 15.5%, both higher than the previous year.  Its loan portfolio started growing again, after showing a dip due to  the effects of the international financial crisis, as did deposit  levels. A low-interest-rate environment in Mexico forced Banorte to  review its funding strategy and the bank successfully maintained an  appropriate funding mix to keep cost of funding down. The bank also grew  its branch network, opening 44 new branches last year, and additional  geographical coverage has been achieved in 2011.
The merger with  Ixe Grupo Financiero, which will create the third largest financial  institution in Mexico, has also provided additional 165 branches to  Banorte’s network; while its alliance with Cardtronics will give  Banorte’s customers access to a wider network of ATMs.
Chief  executive Alejandro Valenzuela is proud of the bank’s achievements and  believes that the expansion strategy will deliver even better results  than are being initially anticipated. He says: “We haven’t lost track of  our [ultimate goal] so the numbers are being delivered; at the same  time we’ve dealt with the integration of Ixe, and the synergies are  going to be above our initial expectations.”
Continued effort was  also put into strengthening the bank’s fundamentals and corporate  governance and, in early 2011, Banorte announced the appointment of  former Mexican central bank governor and finance minister Guillerme  Ortiz as the new chairman of the bank.
Moldova
Victoriabank
The banking sector in Moldova is still at an early stage of  development, weighed down by low profitability and poor asset quality.  But Victoriabank enjoyed a strong recovery in 2010, with profits up more  than 170% and assets expanding by 32%. The bank rolled out a series of  initiatives designed to maintain this growth, including a point-of-sale  lending programme with a retail chain store, loans with preferential  interest rates for loyal customers, and mortgages for buying real estate  in a newly built residential complex.
The bank has increased its  branch network by 15% over the past year, and successfully sought  international funding, both bank loans and certificates of deposit, in  order to provide cheaper lending at home. As expatriate remittances are  an important element of the Moldovan economy, Victoriabank has focused  on payments, implementing two new transfer systems, Privat Money and  Zolotaya Koruna.
The bank now has a market share of 18% in  remittance transfers into Moldova, and has the largest network of  correspondent banks – 15 in total, including a low-cost transfer  offering from neighbouring Romania.
Taking a lead in the provision  of bank cards, Victoriabank provides two so-far unique products in  Moldova, a Visa Platinum card for affluent customers, and the  Shop&Fly card in association with Air Moldova, designed to provide  benefits to frequent flyers.
“Our main goal is to increase the  area of services provided to the population through implementing more  useful and available projects. This will stimulate our clients and  business partners to become accustomed to a European level of  co-operation,” says chief executive Natalia Politov-Cangas.
Mongolia
Golomt Bank
 
 
 
 
John Finigan, CEO, Golomt Bank
John Finigan, CEO of Golomt Bank, describes Mongolia as the epicentre  of global growth. “It is the alpha on China’s beta,” he says.
But  this environment of rapid growth has brought its own pressures. “The  biggest challenge facing all of Mongolia’s banks is retaining standards  of operating efficiencies,” he says.
Part of this has included  strengthening the corporate governance and risk control at the bank,  which in the past year introduced a revised corporate charter,  shareholders’ meeting procedures, board procedures, board committee  procedures, a conflict of interest policy and a policy statement on  corporate governance. The bank also expanded its board of directors.
In  2010, Golomt Bank’s net profits had increased year on year by 52.3% to  Tg13.12bn ($10.07m). Mr Finigan points out that the bank has doubled its  asset size in the past two years. Such rapid growth has brought  challenges in retaining the bank’s culture and efficiency, upgrading and  improving its IT networks, and maintaining the best employees in a very  competitive environment. Mr Finigan says that the main success of the  bank has been in maintaining its operating metrics and low  non-performing loans (NPLs) in such a rapidly changing market. The  bank’s NPL ratio reduced from 4.4% in 2009 to 2.1% in 2010.
In the past year, the bank has opened 21 new offices and increased its number of ATMs by 40%.
Mr  Finigan says that the bank does not have problems, only opportunities.  For the future, he plans to focus on keeping the foundations of the bank  sound so that it can continue to keep apace with the developments of  the rapidly changing Mongolian market. “Evolution, not revolution,” is  Mr Finigan’s mantra for the years ahead.
Montenegro
Erste Bank AD Podgorica
 
 
 
 
Aleksa Lukic, chief executive in Montenegro, Erste Bank
With its small, open economy and dependence on trade with the EU,  Montenegro has been exposed to events in the eurozone. But Erste Bank  Montenegro has stayed on course, with a big recovery in profitability in  2010 taking return on equity to 9.3%, from just 2.9% the year before.  Cost control has also made a significant contribution, with Erste’s  cost-to-income ratio declining by almost eight percentage points to  52.6%.
“Preserving our position among the top financial performers  and achieving growth in all market segments with the undergoing  intensive external and internal transformation was the main challenge  for us, and we succeeded in this. A growth in market share and financial  performance was achieved while maintaining asset quality above the  targeted level. And we increased the number of employees by 10% while  still achieving a decline in the cost-to-income ratio,” says Erste  Bank’s chief executive in Montenegro, Aleksa Lukic.
The total  market share in Montenegro for the bank increased by 2.7 percentage  points for loans (to 8.8%) and by 1.2 percentage points for deposits (to  7.3%). This was fuelled primarily by a very active approach to the  small and medium-sized enterprise segment, where the bank’s loan volumes  grew by a remarkable 79% in 2010, mainly in the food processing,  tourism and trade sectors.
The bank also co-operated with a  government-subsidised programme to provide mortgages at reduced interest  rates for public sector employees. It also offered existing retail  customers the chance to extend loan maturities, thereby lowering monthly  instalments to help stimulate the local economic recovery.
“We  will work to provide financial resources to clients to assist them in  overcoming the crisis, while maintaining moderate growth and great  performance indicators. Private initiatives are the key for the  prosperity of the whole of society,” says Mr Lukic.
Morocco
Attijariwafa Bank
Morocco’s Attijariwafa Bank continued its brisk growth in 2010,  increasing its Tier 1 capital by 15% to Dh19.7bn ($2.4bn) and its net  profits by 15% to Dh4.7bn. The latter figure amounted to a high return  on equity of 20%. It also managed its expenses well in 2010, keeping its  cost-to-income ratio to a low 44%.
Attijariwafa, having expanded  outside of Morocco into the Maghreb and much of west Africa, is now the  biggest bank in those regions and the fourth largest in Africa by Tier 1  capital. This year, it completed acquisitions of banks in Mauritania  and Cameroon, and launched operations in Burkina Faso.
These  subsidiaries complement its existing ones in Tunisia, Côte d’Ivoire,  Senegal (where it is the biggest lender), Mauritania, Mali, Cameroon,  Gabon and Republic of Congo.
Attijariwafa still derives the bulk  of its revenues from Morocco, however. Here, it was particularly busy  over the past year, developing new products for small businesses, which  struggle to access credit from local banks.
Attijariwafa’s new  offerings included Hissab Bikhir, a product for low-earning and unbanked  Moroccans. The bank also introduced loans targeted at people wanting to  finance real estate projects and made a push into the agricultural  sector, providing more credit and services such as insurance to farmers  and businesses connected to farming.
Next year, Attijariwafa plans  to expand its operations in the region further. It also wants to  develop recently launched products, including a programme to support and  finance Moroccan students studying in France.
Mozambique
Millennium BIM
 
 
 
 
Manuel Marecos Duarte, head, Millennium BIM
Mozambique’s banks are among the world’s most profitable, the largest  ones having regularly generated returns on equity (ROEs) in excess of  30% in the past five years.
Millennium BIM, the largest lender in  the country, exemplified this with its performance last year. Its net  profits rose 17% to 2.25bn meticais ($70m), amounting to an ROE of 32%.  Its cost-to-income ratio, moreover, was a low 45% and bad loans made up  just 1.1% of its portfolio.
The bank, controlled by Millennium BCP  of Portugal, Mozambique’s former colonial ruler, has focused heavily on  expanding its services among unbanked Mozambicans, who are thought to  make up as much as 90% of a population of 24 million. “The strategy of  developing a countrywide branch network is still a challenge, not only  because of the uneven economic [conditions] in Mozambique, but also  because of demanding general operating conditions,” says Manuel Marecos  Duarte, head of Millennium BIM. “Despite the progress made,  infrastructures such as roads, energy, water and telecommunications are  still to be built or improved in some districts.”
But thanks to  its expansion, often into districts where no other banks operate,  Millennium BIM took on its one-millionth customer this year, having had  860,000 at the end of 2010. “We have been pioneers,” says Mr Duarte. “We  changed the paradigm of the Mozambican banking sector by expanding it  far beyond its historical borders.”
The bank has also improved its  services for existing clients. It has expanded its ATM network and  upgraded its mobile banking technology so that customers can perform all  transactions on their phones, except for cash withdrawals. It also  introduced consumer loans for university students to pay tuition fees.
In  the corporate market, the lender has been targeting businesses  supporting Mozambique’s rapidly growing mining industry, including  caterers and transport and construction companies.
Namibia
First National Bank of Namibia
 
 
 
 
Ian Leyenaar, chief executive, First National Bank of Namibia
First National Bank (FNB) of Namibia, the country’s oldest lender,  has attained high profits over the past few years and has done so in a  steady manner.
Last year was no exception. FNB made net profits of  N$410m ($52m), a rise of 16% from 2009. Its return on equity (ROE) was a  high 26%. This compared with ROEs of 28% in 2008 and 26% in 2009.
The  majority of the growth in profits has come from the bank expanding its  loan portfolio. Its assets grew 10% in 2010 to N$17.2bn. But it  maintained a strong level of liquidity; its Tier 1 capital rose 21% to  N$1.7bn. FNB’s level of Tier 1 capital is almost double the minimum  level set by the Bank of Namibia.
FNB is also the most efficient  bank in Namibia in terms of its cost-to-income ratio, which was 49% in  2010. It was less than 50% for the previous two years as well.
The  bank’s risk management has been good. At the end of past year, its  non-performing loan ratio was just 2.2%, down from 2.7% 12 months  earlier.
FNB has focused a lot on corporate customers, including  small businesses, in the last year. But it has also attempted to tap  more unbanked Namibians, who make up about half the population of 2.2  million. “We constantly try and find new ways to make banking available,  easy, affordable and secure to all Namibians,” says Ian Leyenaar, FNB’s  chief executive.
Among FNB’s recent initiatives in retail  banking, it launched a scheme to provide staff of corporate clients with  pension-backed loans. It predicts this will see its market share for  home loans rise from 39% to 42%.
Nepal
Bank of Kathmandu
 
 
 
 
Ajay Shrestha, CEO, Bank of Kathmandu
Nepal is recognised as a market where the majority of the population  does not have access to financial services, and Bank of Kathmandu is one  of the banks that is aiming to make the most of the opportunity.
In  the past year, the bank has taken a number of steps to strengthen its  internal management and has realigned its strategy towards targeting a  larger portion of Nepal’s unbanked population.
Ajay Shrestha, CEO  of Bank of Kathmandu, says that the bank has tackled the challenge of  growing across all customer segments and maintaining healthy margins.  “The recent liquidity squeeze in the market has limited the areas of  growth,” he says. The bank has been expanding its activities  predominantly in semi-urban areas. “The bank has been forced to realign  its marketing plan, to make new investments and build a supportive  culture,” adds Mr Shrestha.
“The entire marketing set-up and  orientation of the bank have been re-engineered,” says Mr Shrestha,  explaining that a major focus is now on increasing the bank’s customer  base. “More retail-oriented products and services have been added to  reach large segments of customers. Even the bank’s corporate and social  responsibility programmes are driven by the objective of educating  people with regard to the use of financial services.”
One example  of this is Bank of Kathmandu’s ‘Save for the Future’ campaign, in which  the bank encouraged Nepalese people to get in the habit of saving. As  part of this campaign, the bank has also raised awareness of registering  children’s births.
For the year ahead, Mr Shrestha says:  “Further intensifying the penetration effort will continue to be the  primary focus of the bank in the coming year… [it] will also focus on  safeguarding its portfolio, exploring market consolidation  opportunities, strengthening the capital base and further building its  marketing.”
Netherlands
ING Bank
In need of government support during the financial crisis and  under pressure to separate banking and insurance operations by EU  competition authorities, ING Bank staged a dramatic recovery in 2010.
The  full disengagement of banking and insurance arms came into effect at  the start of 2011, but the operational work to achieve this separation  clearly did not distract the staff of the bank from the core activities.
Profits rebounded more than 550%, taking return on equity to  13.9%, which was very healthy by eurozone standards. Thanks to strong  capital generation, ING was able to repay a second tranche of support  from the Dutch state out of retained earnings in May 2011, and could  repay all remaining support by May 2012 if market conditions allow.
“Despite  turbulent market conditions, we were able to further improve our  service level for both our private and business clients while  maintaining solid financial results. Our relentless commitment to our  clients is in turn reciprocated by Dutch corporate clients who have  voted ING as the best bank in the Netherlands in the overall  relationship management index. Our Corporate Clients Netherlands unit  ranks first in total market penetration,” says Hans van der Noordaa, ING  Bank management board member.
The launch of a balance sheet  optimisation approach for corporate clients during 2010 proved  particularly timely. ING analyses a client’s balance sheet to create a  tailor-made integrated solution, instead of offering a patchwork of  products. In circumstances of tightening liquidity for companies, this  service proved highly attractive, driving a 35% increase in corporate  banking business  in its first year of operation.
“We will  continue to work hard to earn and maintain our customers’ trust through  transparent products, value for money and superior service,” says Mr  Noordaa.
New Zealand
ASB Bank
 
 
 
 
Barbara Chapman, chief executive and managing director, ASB Bank
New Zealand has a lot in common with other markets in the  Asia-Pacific region: it has been affected by uncertainty in the global  economy, and has also been hit by natural disaster.
 “Supporting  our customers and community following the devastating earthquakes in  Christchurch has been a key challenge and priority,” says Barbara  Chapman, chief executive and managing director of ASB Bank.
ASB  responded to the earthquakes in Christchurch with relief packages for  its customers, such as providing 12-month interest-free terms to small  business customers and a fund of NZ$100m ($74.83m) to encourage new  business growth in the region.
However, what ASB Bank is perhaps  best known for is its investment in distribution channels and investing  in technology in its branches. The bank has continued to refurbish its  existing branches and introduce cash-counting machines, in-branch  internet terminals and a dedicated concierge service. The in-branch  video technology, which enables customers to immediately speak to a  specialist via video phone, has reduced overheads and created a more  efficient service. Going beyond the branch, the bank has taken its  services into the virtual world through the launch of a virtual branch  for Facebook.
“ASB is investing to realise future growth  opportunities based on our customers’ changing needs, achieving success  through several customer and community initiatives,” says Ms Chapman.
She  gives the ASB GetWise financial literacy programme as an example of  such an initiative. To continue with the initiatives and the bank’s  strategy, Ms Chapman highlights the importance of human resources.  “Developing our people to continue to provide outstanding service will  be key,” she says.
Nicaragua
Banco de la Produccion
 
 
 
 
Luis Rivas, general manager, Banco de la Produccion
The international financial crisis had repercussions on the  relatively small banking market of Nicaragua. Financial activity in the  country has been slowing since 2008 and, most crucially, loans to small  and medium-sized enterprises (SMEs) contracted by 25%.
While it  may have been tempting to shy away from the struggling SME sector, Banco  de la Produccion invested in a marketing campaign to advertise services  and products tailored to SMEs and attract a wider share of the market.  As a result, and despite the worsening economic conditions, the bank’s  SME loan book decreased by only 10% – less than half the national  average – while the bank’s SME market share within Nicaragua grew to 32%  in 2010, from 26% in 2008 (no data is available for 2009). Banco de la  Produccion also launched initiatives to reward innovative small  entrepreneurs in
Nicaragua, with a particular focus upon rural  areas. Further, the bank was one of the only three lenders in the  country to grow its total loan portfolio in 2010.
In an effort to  retain customers, Banco de la Produccion concentrated on providing  better customer service while focusing on growing the number of cheaper  deposits products, a strategy that paid off and resulted in a larger  deposit market share. Security of online banking transactions improved  and new services were added to the mobile banking platform.
Banco  de la Produccion closed 2010 with slightly lower net profits but much  larger assets, which grew by 23.5% – giving it one-third of the total  banking assets of the country.
Niger
Ecobank Niger
 
 
 
 
Moukaramou Chanou, managing director, Ecobank Niger
Running a business in Niger is far from easy. The vast west African  state is one of the world’s poorest, with a gross domestic product per  person of only about $350. It ranked second last out of 187 countries in  the United Nations’ latest human development index, beating only the  Democratic Republic of Congo.
Real economic expansion is forecast  to be 5% this year. But Niger’s growth is volatile and, being a largely  agrarian economy, dependent on levels of rainfall.
Given these  trying conditions, Ecobank has been highly successful in the country.  Its assets rose 16% in 2010 — despite the economy being hurt by a  military coup early in the year — to CFA Fr116bn ($247m). It made net  profits of CFA Fr1.8bn, which amounted to a high return on equity of  23%.
Ecobank’s growth has been in large part a result of its  commitment to invest in branches. It now has 20 in Niger, which has  helped it raise deposits fairly quickly.
Ecobank also launched  mobile banking recently through a partnership with telecoms group  Airtel. This has allowed more of Niger’s population, the vast majority  of which is unbanked, to gain access to banking services. It has also  contributed significantly to Ecobank’s revenue growth, says Moukaramou  Chanou, the lender’s managing director.
In the corporate market,  Ecobank has increasingly targeted small businesses. It now has more than  2000 such customers and also works with development agencies to provide  credit to them.
Next year, says Mr Chanou, Ecobank will target Niger’s nascent oil and mining industries.
Nigeria
Guaranty Trust Bank
 
 
 
 
Segun Agbaje, head, Guaranty Trust Bank
Guaranty Trust Bank (GTB) has long been well regarded by  international investors. Testifying to this, it issued a $500m five-year  bond in May, becoming the first Nigerian corporate borrower to issue a  benchmark (at least $500m) Eurobond.
Its attractiveness is in  large measure down to its profitability. It made net profits of N37bn  ($231m) in 2010, amounting to a return on equity (ROE) of 17%, the  highest level among its rivals in Nigeria.
This year should be better still. Following strong third quarter results, it is on course to make an ROE of 23% to 25%.
The  bank, which has traditionally focused on corporate business, has  substantially expanded its retail banking arm in the past year and now  has 3 million such customers. Its strategy has included launching  Nigeria’s first e-branches (also known as electronic or express  branches), which are self-service and allow customers to carry out 80%  of their banking needs.
The advantage for GTB is that these allow  it to expand its network without having to build expensive full-service  branches. “We’ve always known that you have to bet on alternative  delivery channels [in retail banking],” says Segun Agbaje, head of GTB.  “Without bricks and mortar, we’ve been able to pile on the retail  business and keep costs down.”
 
He is confident that this platform will allow GTB to have 10 million retail customers within three years.
GTB, already present in countries such as Ghana, Sierra Leone and  Gambia, also plans to expand outside west Africa next year. It is due to  start operating in Côte d’Ivoire in early 2012 and is considering  moving into east Africa through an acquisition.
Mr Agbaje is  confident that GTB’s high profitability can be sustained. “What we’ve  always had as a strategic intent is to be the most profitable [bank in  Nigeria],” he says. “We’ve never chased size. We’ve always believed that  if you chase profitability, you’ll have scale.”
Norway
DNB
Profits at DnB Nor (renamed DNB in November 2011) doubled in  2010, with lower costs, improved asset quality and increased market  share all contributing to the result. Non-performing loans, already low  in 2009 at 1.71%, declined further to 1.55%, while the bank lowered its  cost-to-income ratio to 47.6%, from 48.1% the year before.
The  cost-cutting programme included centralising business processes,  improving procurement and reorganising information technology. The bank  also consolidated its Baltic subsidiary DnB Nord, buying out the  remaining minority shareholders to achieve 100% control, to further  streamline management and costs. And in November 2011, all the financial  services group’s operations, including those of DnB
Nor, moved to a single brand, DNB, which will cut branding and marketing costs.
At  the same time, the bank repriced its assets to retain interest margins,  and gained market share via new offerings that included 24-hour  customers services and an upgraded online banking service. The largest  cities and suburbs in Norway were the principal focus of the drive to  obtain new customers. DNB is also aiming to add to its small and  medium-sized enterprise client base in Norway. The bank sees shipping,  seafood and energy as areas of particular competitive strength in an  international context.
The bank’s healthy balance sheet and  Norway’s strong fiscal position allow DNB a competitive funding profile  in the European context. The bank increased average maturities on  outstanding unsecured and secured debt and has diversified its investor  base, for instance through issuing in the US dollar market in various  formats. In June 2011, DNB became the first foreign issuer to take  advantage of new covered bond legislation in Australia, with a five-year  issue for A$600m ($592m).
Oman
BankMuscat
 
 
 
 
AbdulRazak Ali Issa, chief executive, BankMuscat
In spite of the ongoing financial crisis, BankMuscat was successful  in not only growing its business on several fronts but also bringing new  innovations to the Omani market. The bank’s net profits grew by 38% in  2010 to $263.8m, while its return on average assets went from 1.2% in  2009 to 1.74% in 2010 and its return on average equity rose to 14.6% in  2010 from 10.9% in 2009. Tier 1 capital grew by 12% to reach $1.7bn.
With  assets worth more than $15bn accounting for 40% of the country’s  banking assets, BankMuscat is the leading financial services provider in  Oman. Since its inception in 1982, it has been closely involved in the  development of the local economy.
BankMuscat acted as joint  bookrunner with US-based Morgan Stanley for Omani telecoms operator  Nawras, which listed 40% of its shares in September in an initial pubic  offering (IPO) that was fully subscribed and raised $473m. This was a  groundbreaking listing as it was the first book-building process ever  used in Oman as well as the Gulf’s largest IPO in 2010. The bank also  raised the largest fixed-income fund in the country – the $273m Oman  Fixed Income Fund.  
On the retail front, BankMuscat already  boasts the country’s largest network of 130 branches and 520 ATMs. But  in April 2010, the bank opened its first branch in Kuwait, ensuring it  now has a presence in all six Gulf Co-operation Council countries  through both direct and indirect entities.  
In June 2010, the  bank successfully concluded its last and 14th certificate of deposit  auction. The issue was subscribed to the extent of OR22.30m ($57.92m)  against the size of OR15m. Looking forward, the bank is hoping to enter  into the Islamic finance market, after Oman issued a ruling in May 2011  authorising sharia-compliant services.  
“Subject to regulatory  approvals, BankMuscat is well positioned to launch Islamic banking  services,” says AbdulRazak Ali Issa, chief executive of BankMuscat.
Pakistan
Allied Bank
 
 
 
 
Zia Ijaz, group chief, Allied Bank commercial and retail banking group
Pakistan’s banking industry has had a lot to cope with in recent  months, such as floods, energy shortages and high inflation, which have  all increased costs for businesses and impaired their repayment  capacity.
Zia Ijaz, group chief of Allied Bank’s commercial and  retail banking group, says that non-performing loans (NPLs) have been an  issue for Pakistan’s banks in the past year. “Fortunately we have been  able to manage the risk properly. Our NPL ratio is the lowest compared  to our peers,” he says.
Part of the bank’s strategy was in  anticipating the difficulties that borrowers would have, and for this  reason Allied Bank hired experts with industry knowledge of the sectors  to which its borrowers belonged.
Investment in human resources  has been a theme at Allied Bank. Mr Ijaz explains that in recent months  the bank has focused on human resources quality and has brought in fresh  blood. It has employed more than 500 management training officers who  were hired from local universities.
Aside from investing in human  resources, Allied Bank has also invested in technology. The bank has  continued with the roll out of its new core banking solution to 200  branches and has also invested in loan origination software.
Products  that have been launched recently include a remittance solution for  people who do not have bank accounts so that they can withdraw money  using their mobile phone. With much of Pakistan’s population being  unbanked, mobile solutions such as these offer great potential for the  banking sector.
Paraguay
Sudameris Ban k
Despite its export-dependent economy, which has been hostage to  foreign exchange and interest rate fluctuations, Paraguay’s economy grew  an impressive 15% in 2010. Such expansion has been achieved in some  ways due to its active banking market, which extended larger amounts of  credit to both businesses and individuals.
Sudameris Bank’s own  loan book grew substantially in this time and prudent management and  adequate risk analysis kept non-performing loans at very low levels and  provisions at exceptionally high values.
“Despite a challenging  2010 in many aspects, Sudameris Bank achieved total assets growth of 17%  and net loans growth of more than 41%, while maintaining the highest  standard of risk analysis and credit underwriting procedures,” says  chairman Conor McEnroy. “Growing market shares in all its operations, a  non-performing loan ratio of 0.6% and a return-on-equity ratio of 19%  are key measures of these successes.”
Over the past few years,  Sudameris has secured a stream of long-term credit facilities and trade  programmes with various international agencies – an important  achievement in a market where long-term funding is scarce. This has  allowed the bank to diversify its financing offering and provide  longer-tenure products, ranging from long-term infrastructure financing  in the cattle and shipping industries to loans to smaller businesses to  mortgages.
Further, in 2010 the bank entered the insurance market  by distributing insurance products through its points of sale, both in  its retail network and for corporate clients. The new division became  profitable after its first year of operations.
Peru
Banco de Credito del Peru
 
 
 
 
Alvaro Correa, chief financial officer, Banco de Credito del Peru
Banco de Credito del Peru retained its number one status in Peru and  improved across all measures. Net profits grew by almost 20%; return on  equity was 26.8%, higher than in 2009; both cost-to-income and  non-performing loans ratios were lower than the previous year; assets  expanded by almost 30% and Tier 1 capital increased by 7.5%.
Such  impressive results were accompanied by a revised growth strategy, which  was implemented last year. Chief financial officer Alvaro Correa says:  “After the 2008 crisis, which led to a recession in 2009, we [looked at  the past] and the future of our business and it became obvious to us  that the retail business was going to be the driver of growth for years  to come in the Peruvian financial system.”
The bank focused on  increasing bank penetration while keeping the cost-to-income ratio under  control; pushing a sales-oriented culture internally; and developing  more sophisticated risk management tools. Further, access to credit for  smaller businesses was made easier thanks to more flexible loan  requirements and the acquisition of Financiera Edyficar, the second  largest microfinance institution in Peru, which gave BCP access to  low-income microentrepreneurs, widening its market penetration.
Specific  projects were launched to increase market share in the consumer and  credit card segments, to improve the procurement process and keep costs  down, and improve efficiency in the small and medium-sized enterprise,  foreign trade and consumer loans divisions. All initiatives scored  exceptional results, which contributed to the bank’s outstanding  performance.
Philippines
BPI
As BPI celebrated its 160th anniversary in 2011, the bank was  working toward raising standards with a focus on customer experience and  market expansion.
Troubles in the eurozone have caused  uncertainty for those in the banking industry in the Philippines and  affected BPI’s strategy over the past year. Aurelio Montinola, president  and CEO of BPI, says:
“We focused on growing our loan book to improve our loan-to-deposit ratio rather than expanding our asset base.”
In  2010, the bank had a loan growth of 16% to 379bn pesos ($8.76bn). The  bank also increased its customer base from 3.8 million to 4.5 million.  “We are achieving our target of 5 million customers, and have provided  them with additional banking convenience in the form of online investing  and loan applications, and real-time cash acceptance machines,” says Mr  Montinola.
The bank has a strategy of sustainable growth, using  the idea of ‘back to basics’ that is aimed at bringing the customers at  the base of the social pyramid into the banking sector and working  toward financial inclusion.
For the year ahead, Mr Montinola  says: “We will focus on cost efficiency, capital efficiency and  differentiating ourselves primarily through relationship managers  providing appropriate financial solutions to our key clients, and  superior online and mobile banking solutions for everyone else.”
Poland
PKO Bank Polski
 
 
 
 
Zbigniew Jagiello, chief executive, PKO Bank Polski
At a time when the numerous foreign-owned banks in Poland’s banking  sector have been held back by eurozone parent woes, PKO Bank Polski’s  local ownership allowed the country’s largest bank to continue growing.  Profits were up 40% in 2010, to more than 3.2bn zlotys ($976m), and the  bank recorded its first ever quarterly net profit of more than 1bn zloty  in the third quarter of 2011.
“The secret of the bank’s success  is stable business development and balanced growth across our retail,  small business and corporate banking operations,” says chief executive  Zbigniew Jagiello.
The bank’s perceived strength and healthy  liquidity position have allowed it to maintain access to the Eurobond  market. After a debut issue in euros in September 2010 that priced  inside any previous non-sovereign Polish Eurobond, the bank followed up  with a Swiss franc issue in June 2011.
Poland would not be immune  from outright recession in the EU or continued heavy disruption to  wholesale funding markets, but Mr Jagiello believes the comparatively  low banking penetration still offers a structural opportunity for PKO.  And the bank’s cost control has helped to protect it against any  downturn, with the cost-to-income ratio falling from 47.9% in 2009 to  39.5% in the third quarter of 2011.
The bank has also rolled out  new products and services across a large customer base with surprising  speed. Over the past eight months, more than half a million of its  clients opened upgraded current accounts with new benefits, while  contactless cards were issued to more than 3 million users between  September 2010 and the end of July 2011.
“Our volume of cards with  a microchip and near-field communication functionality is now one of  the largest in Europe, so we are proud to be a leading innovator not  just in Poland, but also in the EU,” says Mr Jagiello.
Portugal
Banco Santander Totta 
 
 
 
 
Nuno Amado, CEO, Banco Santander Totta
A bailed-out country undergoing a fiscal squeeze is not the ideal  operating environment for banking. Against this backdrop, Banco  Santander Totta has managed to maintain a solid performance and in 2010  (before the bail out) it achieved a return on equity of 15.3%, a  cost-to-income ratio of 45.7% and – most impressive of all – a  non-performing loan ratio of just 1.4%.
At the same time as  delivering on the numbers, the bank has taken key initiatives such as  launching its Customer Experience Project to identify negative opinions  among its clientele, and it has continued to advance its SME lending  with an increase in lending to this sector of E184m. The bank also  maintained credit lines under its dedicated PME Investe programme.
Banco  Santander Totta CEO Nuno Amado says: “[Last year] and the first half of  2011 were very difficult and complex, given Portugal’s weak economic  growth and the known difficulties regarding liquidity and funding,  arising basically from the ‘sovereign debt crisis’ that affected  Portugal. The credit portfolio quality, despite the deterioration of the  economic situation, remained controlled, with NPL levels being half of  those registered in the banking system. And the funding position  improved due to the deleveraging process that was done together with an  important increase in customer deposits.”
Capital was also strong,  with Tier 1 and core Tier 1 ratios standing at 11.2% and 10.3%,  respectively. This takes the bank above the Bank of Portugal’s target of  10% by 2012.
Puerto Rico
Popular
 
 
 
 
Richard Carrión, chief executive, Popular
Popular had quite a year in 2010. In the space of four months, the  bank raised $1.5bn – when it initially was seeking only $900m – sold a  subsidiary for $600m – above the original asking price of $500m – and  successfully bid for $2.5bn of deposits and $9.1bn of assets from lender  Westernbank Puerto Rico, which was one of the largest failures in the  US financial system last year. The assets were absorbed and transferred  into the bank’s own systems in just over three months.
Execution  was key and credit has to go to Popular for closing these deals  successfully; and closing 2010 in profit too, after the previous year’s  losses.
But the best is yet to come, says chief executive Richard  Carrión. While last year the group’s profit was explained simply by the  sale of its technology and processing subsidiary, Evertec, this year  the bank has closed three quarters in operational profit – a  confirmation that its strategy is working.
It seems that Popular  will have a busy 2012 too. “[We plan to] finish off [work on] any  remaining legacy assets, focusing on growing portfolios – hopefully the  economy will be a little less hostile than it has been, particularly in  Puerto Rico. [We will] continue to work on US operations, and look at  further efficiencies in Puerto Rico’s operations,” says Mr Carrión.
“We  have a very good infrastructure in Puerto Rico to which we can add  additional assets. We have the infrastructure to manage a lot more  assets than we have now, so we’re looking for additional purchases.”
Qatar
Qatar National Bank 
 
 
 
 
Ali Shareef Al-Emadi, group chief executive, Qatar National Bank
In 2010, Qatar National Bank (QNB) continued its stellar performance,  recording a 25% rise in assets to QR223.4bn ($61.4bn) and a 36%  increase in profits to QR5.7bn. This exceptional growth delivered an  average return on equity of 28.8% for 2010, up from 25.4% in 2009.
Meanwhile,  QNB’s loan portfolio increased by 21.1% to QR131.7bn and the bank  continued to maintain its high asset quality, with a non-performing loan  ratio of just 0.9% at year-end 2010.  
“Among the key  achievements in 2010 was the November launch of the bank’s inaugural  $1.5bn bond offering, issued with a five-year tenor. The bond was the  largest issue of its kind in emerging markets with a very competitive  coupon of 3.125%,” says Ali Shareef Al-Emadi, QNB’s group chief  executive.
“Another key event in 2010 was the successful rights  issue in the second quarter of the year, which increased the bank’s  share capital by 25%.”
While maintaining its leading domestic  position, QNB has continued to expand its network in a number of  countries in the Middle East and north Africa region. Over the past few  years, QNB has acquired a 50% stake in Tunisian Qatari Bank, a 34.3%  stake in Jordan’s Housing Bank for Trade and Finance, and a 23.8% stake  in the United Arab Emirates’ Commercial Bank International.  
In  May 2010, it secured approval from the Syrian central bank to raise its  stake in its Damascus-based subsidiary QNB-Syria, from 49% to 55%, with  plans to increase its capital to $300m.
It has also grown its  presence in south Asia by acquiring a controlling stake of 69.59% in  Indonesia’s Bank Kesawan through a rights issue. QNB was named as the  standby buyer in late 2010 and bought all of the shares offered in the  issue in January 2011. Bank Kesawan has a market capitalisation of $55m  and operates 33 branches throughout Indonesia.
Republic of Congo
Ecobank Congo
 
 
 
 
Lazare Noulekou, managing director, Ecobank Congo
Ecobank Congo has been the fastest growing of its peers in the  Republic of Congo over the past two years. It now ranks fifth in the  country by loans and deposits.
Lazare Noulekou, the bank’s  managing director, says it aims to move up one spot to fourth place in  2012. He says the target is for Ecobank’s market share for loans and  deposits to rise from about 8% today to 12% next year.
Ecobank’s  assets grew by 31% in 2010 to $161m. Its Tier 1 capital rose at an even  faster rate, by 72% to $10.5m. The bank also recovered from the Republic  of Congo’s downturn in 2008. It made net profits of $2.8m, compared  with one of $1m a year earlier and a loss of $2.7m in 2008.
Ecobank  has managed, moreover, to make itself far more productive. Its  cost-to-income ratio fell from 84% in 2009 to 65% in 2010.
The  government in the Republic of Congo is trying to develop its non-oil  sector to help reduce unemployment. Manufacturing industries are seen as  key to achieving this. Ecobank has been at the forefront of Congolese  banks’ efforts to boost manufacturing and sectors such as telecoms. It  was the first lender in the country to launch a programme dedicated to  supporting the value chain of blue-chip companies. As such, it started  targeting financing for brewery industry distributors – many of which  are entrepreneurs or small companies – and contractors and distributors  for other major companies.
Romania
BRD-Société Générale
 
 
 
 
Guy Poupet, chief executive, BRD-SG
Government austerity measures meant Romania was still in recession in  2010, but BRD-Société Générale did not sit idle, even while lending  opportunities were scarce. The bank cut operating expenses by 5% in  2010, reducing the cost-to-income ratio by two percentage points, to  42%.
It has also taken big strides in rolling out new  technologies, in particular contactless payment cards that operate in  about 1000 retail outlets, the gates of metro stations, and since April  2011 at the turnstiles of a customer’s chosen football club. The metro  payment system is unique in Europe, and banks elsewhere are interested  in adopting it.
“Through a very strong, innovative effort, we  managed to launch and sell new products on the Romanian market. The  contactless solution adapted to public transportation is a very  important step forward which encourages the use of non-cash transactions  in everyday life,” says BRD-SG’s chief executive, Guy Poupet.
While  non-performing loans are rising, BRD-SG has sought to maintain support  for the small business sector, extending 900m lei ($278m) in new loans  to this segment, of which 15% were guaranteed by the EU-supported Rural  Credit Guarantee Fund. On the retail side, the cards business remains a  focus for fee generation, with the ‘á la carte’ multi-function card  product attracting 230,000 applicants to date.
“The main  priorities are, on the one hand to keep a steady control on risk, and on  the other hand to exploit all the opportunities generated by the  implementation in our offer of innovative technologic solutions. I think  that innovation can now definitely make the difference in the market,”  says Mr Poupet.
Russia
Nomos Bank
The longer the market for initial public offerings (IPOs) remains  shut, the more astute the timing of Nomos Bank’s 24.99% IPO in April  2011 appears. It is easy to forget that this IPO took place when  uncertainty over Japan’s Fukushima nuclear plant was gripping markets.  Despite that, the $800m on offer generated orders for $3.2bn, including  40 orders of more than $30m, and just two Russians among the top 20  investors.
“The order book was a who’s who of predominantly  long-only international emerging market investment funds. The stability  of our existing shareholders and the bank’s good track record were vital  in attracting the new investors – to be lucky, you need to be  hard-working,” says Jean-Pascal Duvieusart, the board member responsible  for Nomos Bank’s strategy.
The two strategic shareholders,  Russian company ICT and PPF group of the Czech Republic, both retained  their position in the bank through the IPO, reassuring other investors  that they are there for the long haul. And the money raised can go  directly to maintaining the bank’s impressive growth rates.
The  bank’s organic growth in 2010 was 34.8%, and total growth was 91.3%  thanks to the acquisition of Bank of Khanty-Mansiysk (BKM), one of  Russia’s largest regional banks based in the resource-rich Tyumen  oblast. BKM specialised in small and mid-sized business lending, plus  retail banking.
“BKM had the right mix for us, we knew how to  manage its existing business, and with a stronger focus on retail  banking relative to Nomos, it also brought us a better funding mix,”  says Mr Duvieusart.
The bank’s deposit base is now balanced evenly  between retail and corporate customers. While corporate lending still  accounts for 71.6% of its portfolio, the retail and small business lines  have gained a 2% share of its total lending over the past six months  alone. And growth has been achieved without sacrificing asset quality –  at 2.2% in June 2011, non-performing loans are well below the Russian  average.
Rwanda
Bank of Kigali
In August, Bank of Kigali became only the second locally based  company to complete an initial public offering (IPO) on the Rwanda Stock  Exchange. The state-controlled bank raised about $30m, which boosted  its already high capital adequacy ratio from 20% to 27%. It will also  help Bank of Kigali, which like other Rwandan lenders is largely funded  by short-term deposits, finance long-term projects in the country. “The  IPO was a major achievement,” says James Gatera, the bank’s managing  director.
Bank of Kigali has helped ease the mismatch between its  short-term funding base and rising demand for medium- and long-term debt  in other ways, too. Early this year it negotiated a $20m credit line  with the French Development Agency, which will be used to fund small  Rwandan businesses.
Bank of Kigali’s main push, however, has been  in the field of retail banking. Only about one-fifth of Rwanda’s 10  million people are thought to be banked and the lender has been growing  its network of branches to tap into this opportunity. “We’ve been  expanding in a big way,” says Mr Gatera. “What we’ve done is show a  seriousness about banking the unbanked, reaching the lower end of the  pyramid and providing [it] access to finance. There are still huge  opportunities for banks to tap into this untapped potential. This is  what Bank of Kigali is doing.”
The lender has been highly  profitable in recent years, thanks to this growth and Rwanda’s strong  macroeconomic position (real gross domestic product is forecast to grow  6.5% this year, while inflation is a low 5%). Its net profits grew 17%  in 2010 to RwFr6.2bn ($10.6m), a return on equity of 25%.
Non-performing  loans climbed from 6.7% to 9% during the year. But Mr Gatera says they  now stand at 7%, having fallen thanks to better risk management and the  introduction of a credit bureau in the country.
Saudi Arabia
Samba Financial Group
 
Throughout the global financial crisis, Samba Financial Group has  continued to deliver cutting-edge products and services, leading to both  highly satisfied customers and positive bottom line performance.  
Its Tier 1 capital increased by 13.8% in 2010 to help it weather the  strain of deteriorating economic conditions, and at the end of 2010 its  non-performing loan ratio was healthier than that of many of its peers  at 3.7%.
Samba has demonstrated innovation in key areas such as  mortgage lending, where it has developed a ‘segment-based approach’ to  provide an alternative to the ‘one-size fits all’ strategy. Furthermore,  Samba’s focus has been on fixed-rate pricing, which has helped build  consumer confidence by ensuring a certain level of predictability, which  is not available on most products as they use floating rates.  
One  of the most significant initiatives undertaken by Samba in 2010 was its  implementation of the Umrah visa fee payment process for Saudi Arabia’s  Ministry of Hajj and Umrah. Samba won the mandate to implement a  customised solution to process payments for an estimated 4 million Umrah  pilgrims.  
It is this unique combination of significant market  share and relentless innovation in customising client solutions that has  made Samba the partner of choice for many of Saudi Arabia’s leading  corporations. During the past year, Samba has also firmly positioned  Sambacapital, the investment arm of the bank, as a regional player by  growing its market share across the Gulf Co-operation Council (GCC)  countries through capitalising on its presence in the United Arab  Emirates and Qatar.
“While the capital markets industry faced  strong headwinds in the GCC [countries] during the past three years and  some market participants scaled back, Sambacapital invested in people  and systems and launched new innovative products which resulted in  better customer service and improvement in our market positioning” says  Eisa Al-Eisa, chairman of Samba.
“Saudi Arabia today is well and  truly on a sustainable development path, specifically in the area of  infrastructure upgrade – roads, rail network, aviation, education,  hospitals and housing. We are ready to capitalise on this immense  opportunity and to play a meaningful role towards nation building.”
Senegal
Ecobank Senegal
Senegal’s middle class is growing quickly. But tapping into it has not always proved easy for the country’s banks.
Ecobank  Senegal has made a big push into this area in 2011, spending much of  its time offering its services to a group likely to be a mainstay of the  middle class for decades to come: university students.
Between  March and June it brought 59,000 of them into the banking sector by  getting the government to route their scholarships through its branches.  “We opened an account for each student and distributed ATM cards to  them,” says Yves Coffi Quam-Dessou, managing director of the bank. “This  is the first time in the [west African] sub-region, I believe, that  this size of banking of students has been achieved. It’s been an  adventure for us.”
Ecobank does not yet provide credit to Senegalese students, but plans to do so in future and also offer them other products.
The  bank’s focus on students demonstrates its ambitions in Senegal, where  it began operations 12 years ago and now ranks third among the country’s  19 lenders by assets and deposits.
Next year Ecobank will continue to grow its network of 35 branches, 20 of which are in the capital, Dakar.
Expansion  of its branches and deposits has led Ecobank’s assets to grow quickly  in the past 10 years. They rose 20% to CFA Fr314bn ($643m) in 2010. Net  profits dipped 2% to CFA Fr5bn as Senegal continued to suffer from the  global economic downturn of 2009, but return on equity rose from 27% to  32%.
Despite its high profitability, Ecobank wants to cut its  overheads further. It plans to reduce its cost-to-income ratio from 63%,  at which it stood in 2010, to 52%.
In the long-term, Mr Coffi  says Ecobank will have to target rural areas and agricultural lending,  both of which are increasingly important sources of growth for  Senegalese banks.
Serbia
Banca Intesa Beograd
 
 
 
 
Draginja Djuric, chief executive, Banca Intesa Beograd
Banca Intesa Beograd has established an enviable track record of  success in the Serbian market, comfortably winning this award for the  fourth year running. The bank’s results remain strong, with profits up  almost 27% in 2010 and return on equity at 14% – significantly higher  than major competitors.
“Operating in a very complex macroeconomic  landscape, Banca Intesa was faced with the challenge of preserving  stable foundations for further growth through strengthening its deposit  base and maintaining a strong capital position with high liquidity. In  the conditions of moderate economic recovery, we were seeking new growth  areas in order to diversify revenue streams and looking to maintain  dynamic lending activity, while preserving credit portfolio quality,”  says chief executive Draginja Djuric.
These opportunities include  lending E920m to small and medium-sized enterprises in 2010, and signing  a credit line from the European Fund for South-Eastern Europe for  low-cost onlending. Meanwhile, a cost-to-income ratio that is about 10  percentage points lower than competitors is also valuable at a time of  subdued economic growth. Despite Serbia’s highly competitive market of  33 banks, Banca
Intesa retains a leadership position across  assets, customer loans and deposits, as well as holding a 15% share of  net profits for the whole sector.
“It is not realistic to believe  that the Serbian market will remain immune to the effects of the  expected further deepening of the eurozone crisis, which is why we  anticipate that the local business climate will face additional  challenges. That said, our focus will be to remain the major partner of  the Serbian corporate sector and an important pillar of domestic  economic growth by maintaining strong financing for export-oriented  production, infrastructure development projects and agriculture, while  at the same time pressing ahead with further penetration of retail  banking segments,” says Ms Djuric.
Sierra Leone
International Commercial Bank
 
 
 
 
Viswanathan Sundaram, chief executive, International Commercial Bank
Sierra Leone’s banking system is intensely competitive. Despite a  population of just 5.8 million and an economy measuring $2.2bn, there  are 13 commercial lenders in the country. This, along with weak economic  conditions, meant only six of them made a profit in 2010.
“It was  a case of too many banks chasing too few high-net-worth customers,”  says Viswanathan Sundaram, chief executive of International Commercial  Bank (ICB), winner of this year’s award.
ICB was one of the few  banks that managed to come through 2010 strongly, increasing its profits  by 174% to 1.1bn leone ($242,000). “Tripling the net profit to enhance  shareholder returns, despite the tough market conditions, was the main  success achieved by us in the past year,” says Mr Sundaram.
The  bank also managed to fix its balance sheet, slashing its non-performing  loans ratio from 9.7% to 2.4%, one of the lowest in the industry.
Its profitability was still low, however, with its return on equity being just 5.4%.
But  ICB is confident this will grow as Sierra Leone’s economy recovers. The  signs so far are good. The bank’s net profits rose 117% in the first  six months of 2011, while return on equity improved to 11.3%.
ICB  has done much to make itself more competitive in the past 12 months.  Among its initiatives, it established a team of relationship managers to  serve as one-stop contacts for all a client’s needs. It also decided to  send its staff directly to the offices of its biggest corporate  customers, allowing them to carry out their cash and cheque-related  needs without having to go into a branch. And in a market in which  current accounts often pay no interest, ICB made sure that its accounts  carried on doing so.
The result was that the bank significantly increased its deposit base and number of customers.
Singapore
DBS
 
 
 
 
Piyush Gupta, CEO, DBS Group
Although DBS has the largest branch and ATM network in Singapore, its  story is not just confined to its home market. And with the small city  state’s economy being so open and international, it is no wonder that  DBS’s ambitions are not confined to its domestic market.
“Our ambition for the next five to 10 years is clearly [focused] on Asia,” says Piyush Gupta, CEO of DBS Group.
The  bank’s plan is to become the ‘Asian Bank of choice for the new Asia’.  These plans go beyond south-east Asia and into China. And with China’s  currency rising, DBS has had a role to play in the offshore renminbi  business. In the space of five months, it was able to garner Rmb19.8bn  ($3.11bn) of offshore renminbi deposits in Singapore. The bank has also  been one of the first banks involved in the renminbi trade settlement  programme in Singapore and Hong Kong, and at the end of December 2010  had booked $1.3bn of renminbi-related trade assets.
The bank is  also focused on expanding into the high-return businesses of wealth  management, small and medium-sized enterprises (SMEs) and global  transaction services.
With a strong balance sheet, DBS is well  placed to expand on its SME business. In 2010, the bank was able to grow  its SME assets by 11% in Singapore. “We are well capitalised and are  not shy of using the balance sheet,” says Mr Gupta, adding that he sees  the SME segment as one of the bank’s particular strengths.
Slovakia
Postova Banka
 
 
 
 
Marek Tarda, chief executive, Postova Banka
The growth strategy of private equity fund Istrokapital at Postova  Banka continues to yield impressive results, with the bank’s profits up  almost 150% in 2010 to a record level, and return on equity more than  doubling to 27.8%. The bank remains focused on its partnership with the  Slovak postal service, opening 67 new branches in post offices during  2010, as well as three new standalone branches.
The bank’s  unlimited term deposit, which combines a high interest rate with a  no-penalty withdrawal policy, continues to drive deposit funding to the  bank at a time when wholesale financing is scarce.
Postova  Banka’s share of total system deposits rose to 8.5% in 2010, from 6.7%  in 2009. The latest offering of this product drew in 26,000 new savers  in just three months.
“We will continue to meet our goal to be a  practical bank, which provides simple and fair products that every  client can understand. Our main goal is to [be one] of the strongest  banks in Slovakia and to retain dynamic growth in the field of retail  banking. We want to bring innovations which, in terms of competitiveness  but also from the perspective of the client, are unique and our own,  and thanks to which we become an everyday partner for the general mass  of clients,” says Postova Banka’s chief executive Marek Tarda.
Having  raised plentiful funding, the bank has now moved to focus on lending  opportunities, once again introducing a product that was at that time  unique on the Slovak market. This is the ‘better instalment’ credit  consolidation loan that allows customers to transfer and consolidate  loans owed to other banks in order to bring down their overall interest  payments. This helped to drive a 38.4% rise in total customer loans, and  a 24% climb in assets.
Slovenia
SKB Banka
Thanks to early euro membership in 2007, Slovenia’s banks enjoyed  plentiful funding during the boom years, and some of the largest  over-reached themselves. As these banks struggle with high  non-performing loans (NPLs), the country’s fifth-largest player, SKB  Banka, has seen opportunities open up. Its NPL ratio fell in 2010, to  just 3.9%, while its larger rivals are struggling with bad loans in  double figures.
“Beside effective commercial activities and  improved productivity, our risk policy and the constant concern for the  optimisation and reasonable limitation of operating costs resulted in a  17.7% improvement in profits in 2010. This result was achieved in a  difficult economic environment and further reinforces our core Tier 1  capital ratio,” says SKB’s chief executive Gerald Lacaze.
The bank  is not immune from eurozone woes – its majority shareholder is France’s  Société Générale. But it has established a strong enough standalone  position in the Slovenian market to weather the storm. A new system for  assessing the sensitivity of net banking income to interest rate changes  has helped SKB achieve the second highest net interest margin in the  Slovene banking sector, while deposits are up 30%. A centralisation of  IT functions has cut both capital and running costs for the back office.
The  bank is also active in planning its product offering to attract fresh  business, with loans up 45% in 2010. It offers fully personalised credit  cards, a special product package for start-up companies and specific  segmented offerings for professionals in sectors such as law and  medicine.
“SKB has kept its focus on permanently adapting its  universal banking business model to the local economy, in a turbulent  market. To succeed in this strategy, we take proactive and efficient  commercial actions to create innovative, qualitative and  price-competitive banking services tailor-made to the needs of clients,”  says Mr Lacaze.
South Africa
Nedbank
 
 
 
 
Mike Brown, chief executive, Nedbank
South Africa’s economy has not fully recovered from its downturn in  2009. And, given the country’s growth historically has a close  correlation with that of Europe, another slowdown seems highly likely.
With  demand for credit likely to be sluggish for a while as a result, South  Africa’s banks are increasingly focusing on ways to generate fee-based  revenues. Nedbank, the winner of this year’s award, has been among the  most successful of them in this endeavour so far — its non-interest  revenues grew 16% in the year to the end of June.
Efforts to  boost these will be among its priorities in 2012. “We’re not expecting  strong asset growth in the short term,” says Mike Brown, Nedbank’s chief  executive. “So we’ll continue to focus on opportunities for generating  transaction and non-interest revenues.”
Among Nedbank’s most  important recent moves was to introduce M-Pesa — the mobile phone-based  money transfer service so successful in Kenya — to South Africa. Having  launched it in late 2010, about half a million people have already  registered.
M-Pesa has proved popular among unbanked South  Africans. But it has also caught on with small businesses, particularly  those wanting to make payments to non-payroll employees. “We believed it  had enormous potential in South Africa,” says Mr Brown. “Initially, we  felt it would play out well in the unbanked market, which it has. But it  is also increasingly being used in the banked market among small  businesses.”
Another of Nedbank’s aims is to deepen its ties with  the rest of Africa. It has operations in five southern African countries  and has an alliance with Ecobank, the biggest lender on the continent  by geographical sprawl.
It is also open to acquisitions  elsewhere, although it remains cautious in its approach. “We have looked  at a number of acquisition opportunities,” says Mr Brown. “But none of  them have ticked the financial, strategic and cultural boxes.”
South Korea
Woori Bank
 
 
 
 
Lee Soon-woo, CEO, Woori Bank
As a leading bank in South Korea’s export economy, Woori Bank has  been at the front end of the troubles that are facing the country as a  result of the global financial crisis.
“Woori Bank, traditionally  being one of the country’s largest lenders to the corporate sector,  inevitably experienced greater negative effect of liquidity crunch than  major competing banks,” says Lee Soon-woo, CEO of Woori Bank. And  because of the impact on the financial health of corporate borrowers,  Woori Bank had to set aside more provisions for bad loans than it had in  previous years.
“Nevertheless, we have accelerated bad loan  settlement by selling and writing-off non-performing loans [NPLs],  collecting delinquent loans and disposing of collateral thereby  significantly reduced the NPL ratio by 0.92% to 2.42%,” says Mr Lee.
On  a more positive note, the bank has in the past year been focusing on  customer satisfaction and has appointed an executive to the role of  chief customer officer, a first in South Korean banking.
The bank  also aims to put the customer at the centre of what it does when it  comes to product design. Mr Lee cites the “111 Time Deposit” as an  example of a customer-oriented product that the bank has recently  introduced, which has a longer maturity of 18 months than the  conventional 12-month maturity.
And in keeping up with the pace  of smartphone usage in South Korea, Woori Bank launched a product  exclusively for sale via smart phones. Woori Bank has also developed a  universal mobile banking service that has raised deposits worth Won105bn  ($91.8m).
Spain
Santander
Steering a course through the minefield of the current Spanish  economy is testing the resolve of all the country’s banks. Many of the  saving banks (cajas) have not been up to the challenge and have been the  subject of a radical restructuring.
Santander, by contrast, can  boast that its net profits for 2010 only fell by 8.5% compared to the  average sector drop of 27.4%, that it kept its record for efficiency  with a cost-to-income ratio of 43.3%, and at 3.55% its non-performing  loan (NPL) ratio was below the sector average of 5.83%.
CEO  Alfredo Sáenz says: “Spain presented many challenges to banks in 2011,  including careful management of pricing and margins, of NPLs and of the  balance sheet, against a backdrop of macroeconomic and market  uncertainty. Around halfway through the year, medium- and long-term  wholesale funding markets closed, presenting another challenge.  Generating profit, while strengthening the balance sheet, was difficult  in this environment.”
One key initiative taken by the bank was to  help ease payment difficulties for Spanish families struggling with  their mortgages. In July it announced that customers facing difficulties  through unemployment and a 25% decline in income could have a moratoria  of up to three years on mortgage capital repayments. Loan extensions  were also offered, enabling families to maintain their good credit  records.
The bank has emerged victorious in the deposit war by  offering customers up to 4%, enabling it to increase deposits by 21%.  Looking to the future, Mr Sáenz says: “In Spain, we will work to recover  profit we have lost in the past few years. The task is to prepare for  an improvement in the credit cycle, to actively manage margins, adapt  the cost structure to market realities, and gain profitable market  share.”
Sri Lanka
Commercial Bank of Ceylon
 
 
 
 
Amitha Gooneratne, managing director and CEO, Commercial Bank of Ceylon
Commercial Bank of Ceylon, which has the highest market  capitalisation in Sri Lanka’s financial sector, has been able to  maintain its position as a benchmark public bank in the country. The  bank’s net profit increased by 28.3% to SLRs5.52bn ($50m) in 2010, from  SLRs4.3bn in 2009. Its assets also grew, increasing 14.81% from  SLRs322.31bn in 2009 to SLRs370.06bn in 2010.  
Like many markets  around the world, Sri Lanka has been affected by the economic turbulence  resulting from various global events of recent years, and Amitha  Gooneratne, managing director and CEO of Commercial Bank of Ceylon, says  that the export markets in Sri Lanka were affected by the unrest in the  Middle East.
Commenting on the other challenges over the past  year, Mr Gooneratne says: “Maintaining a low non-performing loan [NPL]  ratio with better provision cover and improving cost income ratios,  while [also] increasing asset volumes to maintain acceptable levels of  gross and net income, required a delicate balancing act.”
The bank reduced its NPL ratio from 6.84% in 2009 to 4.22% in 2010.
Mr  Gooneratne says that his ambition is to expand Commercial Bank of  Ceylon’s presence in the northern and eastern regions of Sri Lanka, as  well as in Bangladesh. The bank has been aggressive in its domestic  expansion, targeting the opening of new branches in the once  war-affected areas in the north and east of the country.
As well  as regional expansion, the bank is looking to focus on products, with  the expansion of inward remittances, bancassurance and the introduction  of more fee-based services.
Swaziland
First National Bank of Swaziland
 
 
 
 
David Wright, chief executive, First National Bank of Swaziland
Swaziland’s economy has struggled in the past three years as weak  external demand has hit its exports, particularly textiles and wood  pulp. Gross domestic product grew just 1.2% in real terms in 2009 and  2.1% in 2010, far below the levels in most other sub-Saharan African  countries.
This, coupled with a competitive and fairly mature corporate market, has made life difficult for Swaziland’s banks.
But  FNB Swaziland has managed to maintain high profitability by winning  more market share in corporate banking and expanding its retail banking  business, which has led to an increase in non-interest revenues.
FNB’s  profits rose 16% in 2010 to 73m emalangeni ($9m), representing a hefty  return on equity of 24% and making it the country’s most profitable  bank.
FNB has taken plenty of innovative measures in the past 12  months. It became the first lender in Swaziland to offer mobile banking,  allowing customers to transfer funds, check balances and buy airtime  for their phones. It also introduced eWallet, a product enabling clients  to send money via a mobile phone to people without bank accounts (who  can collect the cash at FNB’s ATMs).
For corporate customers, FNB launched Swaziland’s first electronic cash management service.
“Introducing  innovative electronic banking channels has enabled us to seize growth  opportunities,” says David Wright, FNB’s chief executive. He adds that  such measures should continue to serve the bank well next year — when  the economy is likely to remain fragile — and will be crucial to it  expanding its fee-based income.
Sweden
SEB
 
 
 
 
Annika Falkengren, group chief executive, SEB
Outside the eurozone and with a home government that has a strong  fiscal framework, Swedish banks have acquired a safe haven reputation  over the past 18 months, and SEB’s reputation looks richly deserved. The  bank’s profits rebounded by 630% in 2010, allowing a 50% increase in  the dividend paid to shareholders. The reversal of credit loss  provisioning was one of the main drivers of this recovery, and  non-performing loans in Sweden are less than 2%.
“We have  continued to serve our customers well, grown together with them and  improved customer loyalty. Despite a highly uncertain market  environment, our results are stable and we have managed to balance cost  development with prioritised investments. SEB has continued to increase  its balance sheet strength in order to support our customers, and has  passed all regulatory hurdles and stress-tests with flying colours,”  says SEB group chief executive Annika Falkengren.
SEB has been  particularly active in developing its treasury and cash management  services, becoming the first Nordic bank to offer settlement in offshore  Chinese renminbi, and rolling out a cash-flow hedging tool to allow  clients to manage all their foreign exchange exposure in real time  through one web-based solution. The bank has a 70% share in Nordic  supply chain finance markets, and its transaction services online  community ‘the Benche’ has 20,000 visitors per month from more than 100  countries.
“Going forward, our large corporate expansion in the  Nordics and Germany is of particular importance to us. We will further  develop our comprehensive range of financial services and grow together  with our customers,” says Ms Falkengren.
Switzerland
Credit Suisse
 
 
 
 
Hans-Ulrich Meister, chief executive, Credit Suisse Switzerland
Volatile markets continue to affect the world’s largest investment  banks, and a strong franc has also challenged Swiss exporters. But  Credit Suisse has done more than most to establish some stable revenue  streams, and ensure a resilient capital base.
In early 2011, the  bank sold a contingent convertible bond for SFr6bn ($6.52bn) to existing  shareholders, together with a $2bn public placement of Tier 2 buffer  capital notes. Both issues had high conversion triggers, and provided  the bank with a well-priced 70% of the contingent capital that it needed  to raise over nine years in one week.
Hans-Ulrich Meister, chief  executive of Credit Suisse Switzerland, believes that the bank can take  advantage of its position as an early adopter of new regulations, while  maintaining a long-term perspective to identify new trends and  opportunities for its clients.
“The key to our success was our  integrated strategy, which allows us to serve clients holistically, and  our global presence, coupled with our conservative funding position and  strong capitalisation,” says Mr Meister.
In the vital private  banking sphere, strong cost control allowed Credit Suisse to maintain a  29.5% margin in 2010, the highest in the industry, while the SFr150bn in  net new wealth management assets added since 2008 are three times  greater than the nearest competitor. The bank is particularly successful  in cross-selling between its private banking division and its  investment bank and asset management activities, with private banking  involved in 90% of the SFr4.4bn of collaborative revenues raised in  2010.
“We were able to concentrate on our clients in this  challenging period, offering our combined expertise across private  banking, corporate banking, investment banking and asset management. Our  Swiss home market remains of central importance to Credit Suisse,  accounting for more than one-third of the bank’s earnings,” says Mr  Meister.
Taiwan
Chinatrust Commercial Bank
 
 
 
 
Frank Shih, chief strategy officer, Chinatrust
Given the over-saturated nature of the Taiwanese banking market,  Chinatrust has ambitions to go beyond Taiwan, to be a premier bank in  Asia.
Frank Shih, Chinatrust’s chief strategy officer, says of  the bank’s ambitions: “Our objective is to become one of the major Asia  leaders in the coming decade.” He adds that to be able to do this, the  bank first needs to be able to defend its position in Taiwan, maintain  profitability in order to retain strength and support from the  shareholders for new investments, and expand into high-growth markets in  the region.
To facilitate its overseas plans, Chinatrust has  converted the IT systems of all its overseas branches onto a common IT  platform, which will make it easier to integrate and standardise the  products and services across the regions where the bank operates. The  bank also faces challenges in its overseas expansion because of  uncertainty in the global economy and because of the tightening  regulatory environment in markets around the world.
Chinatrust  faces pressure in Taiwan because the market is overbanked, with a  relatively large number of banks chasing a small number of customers.  This makes it difficult for the bank to differentiate itself when so  much of the competition is price based. Despite these difficulties,  Chinatrust has been able to maintain a strong position compared to its  peers, particularly in the areas of cash management, foreign exchange  derivatives, wealth management and trade finance.
Mr Shih says  that the bank’s objectives for the next year include exploring new  high-growth segments in the region such as small and medium-sized  enterprises and private banking, as well as tightening cost control and  risk management in the face of uncertainty in the global economy.
Tanzania
Standard Chartered Tanzania
Tanzania’s banks have suffered from rising costs in the past two  years. Many expanded quickly in the run up to an economic slowdown in  2009, often building expensive branch networks in the process.
Cost-to-income  ratios in the country are thought to have risen by about 20% across the  sector this year, thanks to revenues and demand for credit not having  picked up as much as lenders wanted.
Standard Chartered Tanzania  has kept a tight rein on its cost base, however. Its cost-to-income  ratio rose only a few percentage points in 2010 to a still fairly low  64%. And it remained highly profitable, its net earnings of $13.9m  amounting to a return on equity of 21%.
Standard Chartered has,  moreover, still managed to increase its loan portfolio recently. This  has grown by about 25% in the year to date (or substantially more if  offshore loans to Tanzanian borrowers are included). “We’ve focused on  growing our loans and advances,” says Jeremy Awori, the bank’s chief  executive.
Standard Chartered has been able to increase its market  share of corporate loans partly because the size of its parent’s  balance sheet gives it the clout when it comes to lending that few other  banks in the country can match. But it has also innovated and  introduced new products. Among those this year, it launched renminbi  accounts. “We were the first bank to launch renminbi accounts in  Tanzania,” says Mr Awori. “That supports the Sino-Tanzania trade  corridor.”
These have proved popular with Chinese companies  wanting to invest in Tanzania, and local ones wanting to export to and  import from China. Before, traders wanting renminbi had to first swap  Tanzanian shillings into dollars before buying the Chinese currency.
For  retail clients, Standard Chartered rolled out Visa debit cards for its  higher-net-worth account holders, becoming the first bank in the country  to do so. It also launched an online tax payment service.
Thailand 
Bangkok Bank 
Bangkok Bank aims to be a leader in a number of areas of the Thai  banking industry, including the market for deposits. In an environment  where a number of entrants are aggressively competing for deposits,  Bangkok Bank has been able to maintain its strong position by finding a  mix of new products and leveraging its existing relationships with its  personal, business and corporate customers.
Aside from attracting  more deposits, Bangkok Bank has expanded its network, increasing the  number of accounts to 18 million. Like many in the region, the bank is  looking beyond its domestic borders, as it follows its corporate  customers, many of which are expanding into Asia.
Bangkok Bank’s  international network includes 24 overseas branches, and its Malaysian  subsidiary opened three new branches in 2010 and one new branch in 2011.
“Our international branch network notably helped us support  large Thai corporates expanding offshore and we also financed several  major acquisitions in Australia, Europe and Asia in sectors such as  energy, seafood and retail,” says Chartsiri Sophonpanich, president of  Bangkok Bank.
This helped Bangkok Bank’s overall performance in  the past year, with the bank’s net profit increasing by 19.9% to  Bt24,808bn ($800m) in 2010.
However, the prospects for growth in  2012 have been dimmed by the recent floods in Thailand. “We will  continue to stand by our customers and the communities affected by the  flooding, and share in the national reconstruction effort. We will help  our customers steadily build their competitiveness to prepare for  regional economic integration, and we will strengthen our consumer  banking operations to better meet demographic trends,” says Mr  Sophonpanich.
Togo
Ecobank Togo
Ecobank Togo has traversed Togo’s economic downturn over the past  three years well. The bank made a net profit of $7.1m in 2010. This was  down slightly from $7.4m a year earlier, but still amounted to a return  on equity of 27% and a fairly high return on assets of 1.79%.
Expenses were also brought down in 2010, with Ecobank’s cost-to-income ratio falling to 63% from 67% in 2009.
The  bank’s assets grew just 5% during 2010 to $394m, reflecting slow  economic growth and weak demand for credit in the country. As such,  Ecobank attempted to boost its commission- and fee-based revenues. It  launched ‘Rapid Transfer’, which allows for immediate money transfers  between any two Ecobank branches, regardless of whether the senders and  receivers are customers of the bank. It also increased its foreign  currency sales to corporate clients and bureaux de change. This strategy  paid off and allowed Ecobank to keep its dividend for the year at  virtually the same level as in 2009 – CFA Fr59,698 ($123) per share in  2010 versus CFA Fr58,959 in 2009.
Despite a sluggish economy, the  bank is keen to increase its lending portfolio and is especially  targeting small and medium-sized businesses, which make up the bulk of  Togo’s economy.
Ecobank holds 23% of the assets in the country’s  banking system and thinks it can increase its market share by winning  business from small companies, most of which are unbanked, having long  been shunned by risk-averse lenders.
Trinidad and Tobago
Republic Bank
 
 
 
In common with the rest of the Caribbean region, Trinidad and  Tobago’s economy has been badly hurt by the global economic downturn,  and any business growth within the country has been rare.
However,  thanks to its careful sales strategy and focus on risk management and  asset and liability management, Republic Bank achieved an annual  increase on its net profits in 2010, an improved return-on-equity ratio,  a lower cost-to-income ratio and lower levels of non-performing loans.  The bank also expanded its assets and maintained strong levels of  liquidity and capital ratios.
“Finding growth was a challenge for  us,” says managing director David Dulal-Whiteway. “Due to the economic  slowdown, there was a reduced demand for loans and as such, maintaining  profitability became more difficult. Our subsidiaries in  tourism-dependent economies, such as Grenada and Barbados, were also  severely hit due to the slowdown.”
New marketing initiatives and  products with better terms helped to improve the bank’s share in the  loans market, in particular in the mortgage market. Looking to the  future, Republic Bank’s strong position should allow it to quickly seize  any growth opportunities. “We have a strong balance sheet and our  profitability ratios are good,” says Mr Dulal-Whiteway. “We also have a  liquid position and strong capital ratios, leaving us well poised to  take advantage of opportunities that may arise, whether from up-ticks in  the economy or acquisitions.”
Tunisia
Banque de Tunisie
For a country that went through a revolution in January, with  president Zine El Abidine Ben Ali having to flee the country and end his  23-year rule after mass protests, Tunisia’s banking system has come  through 2011 remarkably well. Although the economy’s expansion ground to  a halt this year, credit provision by Tunisian banks grew 10.5% in the  first nine months. This was about three times faster than in Egypt,  whose revolution came a month after Tunisia’s. Moreover, Tunisian banks  are expected to have higher returns on equity (ROEs) this year than in  2010.
Banque de Tunisie, the fourth biggest commercial lender in  the country by Tier 1 capital, has managed to come through the crisis  strongly. Its earnings in the first half of the year were TDh38m ($26m),  higher than those of TDh36m in the first six months of 2010. Mohamed  Habib Ben Saad, the bank’s chief executive, says net income for the year  should be 20% higher than in 2010.
This success follows a robust  performance last year, when Banque de Tunisie made a net profit of  TDh56m and an ROE of 13%. Its cost-to-income ratio was a very low 29%,  while non-performing loans made up a fairly small 5.35% of its  portfolio. They fell from 6.8% at the end of 2008 and 5.55% in 2009.
Banque  de Tunisie is committed to keeping a tight leash on expenses, and is  targeting a maximum cost-to-income ratio of 35% in the coming few years.  It also wants to attain ROEs of roughly 15%.
To do this, it aims  to increase its market share of deposits and loans. One of its main  strategies will be to entice customers by having one of the best  technology platforms in Tunisia’s banking system. If its performance  over the past year is anything to go by, there is little reason to  suggest it cannot succeed. “Despite all the challenges, the strategy  adopted by Banque de Tunisie continues to generate success,” says Mr  Habib Ben Saad.
Turkey
Yapi Kredi Bank
 
 
 
 
Faik Acikalin, chief executive, Yapi Kredi Bank
Banking in Turkey is changing, as single-digit inflation gradually  becomes the norm and simply investing in government bonds no longer  yields extraordinary rates of return. This will push banks to compete  much more directly in customer-oriented banking activity, and Yapi Kredi  Bank looks to be adapting to the new reality particularly well.
Securities  are a relatively small part of its total assets – 21% at the end of  2010, compared with an average of 30% among its private sector peers.  And a raft of initiatives has helped the bank to take the lead in  generating fee and commission income, which will be vital in the new  environment of lower net interest margins.
In particular, Yapi  Kredi has taken the lead in developing product bundles, for both retail  and small business clients, which incorporate both financial and  non-financial benefits. The bank has distributed more than 500,000  bundles to retail customers, and another 100,000 to small and  medium-sized enterprises (SMEs), increasing retail product cross-sell  from 3.3 products per customer to 3.9, and bringing fees to 26% of total  revenues – six percentage points higher than the sector average.
“We  are heavily focusing on fee generation, lean cost management and  risk-adjusted pricing. This is only possible with a very good knowledge  of the client base and the sophisticated customer relationship  management systems we have developed to help us analyse the behaviour of  our clients and bundle products accordingly,” says Faik Acikalin, chief  executive of Yapi Kredi Bank.
The strategy has paid off, with a  26.9% return on equity in 2010, and a 45% rise in profits, both the  highest among the top tier private sector banks. Significant  improvements in asset quality – bad loans fell to 3.4% in 2010 from 6.3%  in 2009 – and efficiency, including cutting loan decision times from 10  days to four days for SMEs, all bode well for continued progress.
Turkmenistan
Halk Bank
The banking sector in Turkmenistan remains mostly state-owned,  state-directed, and focused on payments processing rather than lending.  But within this context, Halk Bank, descendant of the Soviet-era savings  bank, has become one of the most progressive institutions.
The  bank is lightly capitalised, with Tier 1 capital equivalent to just over  2% of total assets, but profitable: profits exceeded Tier 1 capital in  2010, to generate a return on assets of 2.3%. The bank has a clear  strategy for improving efficiency, and now generates the highest  revenues per employee in the country, at $15,000. And it has so far  expanded its asset base (by 16% in 2010) without raising any asset  quality problems – non-performing loans were at just 0.1% in 2010.
The  bank’s modernisation programme aims to usher in a customer-oriented  approach, including a vertical sales strategy on the retail side that  will integrate the product offerings, and improvements in back-office  functions. Flagship branches in the major cities of Turkmenistan are  increasing their levels of automation in a bid to raise service  standards to a level that can attract the most economically active and  affluent customers.
Consumer and mortgage lending are gradually  being added to the basic retail customer account services that the bank  already offers. Halk Bank is also expanding its ATM network into rural  areas, and is preparing to launch its first comprehensive call-centre  service.
The bank has also expanded its corporate banking offer,  with particular focus on small businesses, to include better borrowing  and payments facilities and business advisory services. It offers a  business account specifically tailored to start-up companies, with  strong support from their local branch. This has allowed the number of  small business clients to double in three years, which also generates  more opportunities for cross-selling retail banking products to the  employees of its corporate client base.
Turks and Caicos Islands
Scotiabank (Turks and Caicos)
 
 
 
 
Cecil Arnold, managing director, Scotiabank (Turks and Caicos)
Banks in the Turks and Caicos Islands have been facing the problems  of operating within a country with growing unemployment,  higher-than-usual levels of delinquencies in retail products, and low  economic activities.
Thanks to a revised product offering,  Scotiabank (Turks and Caicos) maintained a good level of profitability  and kept non-performing loans (NPLs) at bay – NPLs actually fell to  2.18% for 2010 from 2.3% the previous year – and retained its  exceptional 56.4% retail loan market share. Its return-on-equity ratio  decreased from the 2009 figure but was still a healthy 16.1%, while the  cost-to-income ratio did not change from 2009’s 57%.
Scotiabank  (Turks and Caicos) managing director Cecil Arnold is proud of the bank’s  achievements and is keen to highlight its growth in financing for  non-residents’ holiday homes, the acquisition of key new corporate  clients, and the growth of the banks’ assets.
Scotiabank (Turks  and Caicos) has in the past few years formed a new partnership with a  local insurance provider to complement the bank’s existing insurance  offering; created a partnership with the country’s government to provide  the bank with certain financial services; and created a payment  programme for corporate clients trading with other businesses in the  North American Free Trade Zone.
The banks also launched a new set  of products aimed at small and medium-sized enterprises that are more  flexible and will allow the deferral of payments. This meant that a  number of struggling smaller companies could continue to operate and  retain staff.
Uganda
Crane Bank
 
 
 
 
Ali Kalan, managing director, Crane Bank
Although starting from a fairly small asset base, Crane Bank has  turned itself into one of Africa’s most profitable lenders. Its net  earnings rose 61% in 2010 to Ush52bn ($19.4m), amounting to a huge  return on equity (ROE) of 43%. This followed ROEs of 41% in 2008 and 37%  in 2009, levels that would be the envy of most other banks in the  world.
Crane Bank has managed to obtain such profits chiefly by quickly expanding its loan portfolio. This rose 70% in 2010 alone.
Much  of this growth has come from targeting Ugandans who previously were not  part of the banking system. Throughout the past year, Crane Bank’s  officers have embarked on a door-to-door campaign in many parts of the  country to sell its products. The bank also opened branches in several  rural areas and extended its closing hours from 4pm to 6pm to make it  easier for companies and individuals to access its services.
“Crane  Bank has been extremely successful in bringing a large number of the  unbanked population in to the banking mainstream,” says Ali Kalan, the  bank’s managing director.
Crane Bank will continue its network  expansion next year. Mr Kalan says its will add another 10 branches to  its current 15 as part of its plan to have 50 by 2015.
The lender  has so far managed its growth in a sustainable manner. Its  non-performing loans ratio was less than 1% at the end of 2010, having  been 3.4% a year earlier. And it is the only bank in the country to have  paid-up capital of Ush100bn, well above the regulatory requirement of  Ush25bn by 2013. “This provides Crane Bank with more than adequate  capital adequacy to fuel our ambitious expansion plans,” says Mr Kalan.  “This is perhaps the single most significant strength of the bank.”
UK
Santander
 
 
 
 
Ana Patricia Botín, CEO, Santander UK
With many UK banks struggling to get their return on equity above  single figures, Santander once again showed that its tried and tested  model triumphs in the most difficult of markets – it managed 16.51% last  year as well as a best-in-class cost-to-income ratio of 41%.
The  UK market is choppy to say the least, and Santander decided to postpone  its planned initial public offering until 2013, but it did not let up  on the merging and rebranding of its crisis-made acquisitions.
The  rebranding of Alliance & Leicester (A&L) to Santander was  completed, involving the transfer of 5 million A&L customers to  Santander’s IT platform. Overall a total of 25 million customers from  three banks (A&L, Bradford & Bingley and Santander UK) have been  transferred onto one IT platform.
In 2010, Santander announced it  would acquire 318 branches and more than 40 banking centres from the  Royal Bank of Scotland, which the latter was obliged to sell under EU  directions as a penalty for receiving state aid. This will bring  Santander’s overall branch total to 1700 and increase market share in  the politically sensitive small and medium-sized enterprise (SME) sector  from 3.6% to 8%.
CEO Ana Patricia Botín says: “Santander UK has  embarked upon a commercial turnaround of the bank. In our retail  business, this involves launching new value-driven products which reward  our customers, and investing to improve our service – hiring more than  1000 front-line roles in the UK and bringing our call centres home. In  our corporate bank, we took many steps to better serve UK businesses: we  relaunched our Business Banking proposition and further expanded our  SME offerings – increasing lending by 27% and creating an extensive  support programme to ensure small business growth.”
Ukraine
Privat Bank
 
 
 
 
Alexander Dubilet, chief executive, Privat Bank
As foreign-owned banks in Ukraine struggle with high non-performing  loan rates, or even exit the market altogether, Privat Bank’s leadership  position grows stronger. The flexibility of its business model is key,  with a rapid strategic shift away from high-risk sectors such as  mortgage lending toward larger corporate clients and transaction banking  in both corporate and retail spheres. Corporate client numbers  increased by 5.4% in the first half of 2011.
“The major challenge  for the bank is general uncertainty in financial markets. Traditional  methods of planning and control do not work efficiently under conditions  of uncertainty or, as it is called today, ‘turbulence’, but this does  not mean that it is impossible to make profits and develop. More new  technologies, more customers, more transactions. All of this is our  response to the new challenges which are met by banks today,” says  Privat Bank chief executive Alexander Dubilet.
Ambitious  technology projects helped drive a 57% surge in customer transactions in  the first half of 2011. These include cardless ATM withdrawals, and a  real-time transfer of money from Privat Bank Visa cards to the Visa  cards of any other bank – the first facility of its kind in the world  when it was launched in February 2011.
“Our strategy is to provide  easy and simple access to banking services for all companies and every  citizen of the country. The solution for this ambitious task lies in the  implementation of the most advanced technologies, simplifying the means  of customers’ communication with the bank while performing any  mass-transaction,” says Mr Dubilet.
The other benefit of this  strategy is the attraction of customer deposits, which rose by 51% in  2010 and a further 20% in the first half of 2011. Given that turbulence  in financial markets, this build-up in stable customer funding to the  bank should enable Privat Bank to grow into the economic recovery.
United Arab Emirates
United Arab Bank
United Arab Bank (UAB) was highly active in growing its business  in 2010, which is best reflected in its profitability figures. The bank  reported an increase in net profits of 9.7% for the year to Dh308m  ($83.87m) and it achieved the highest net profit margin at 62.8% of any  United Arab Emirates bank in 2010.
UAB’s robust performance is  reflected further in other key financial indicators: its total assets  rose by 11% in 2010 to Dh7.74bn, while loans grew by 16% to Dh5.53bn at  the end of 2010. Its Tier 1 capital rose 9.2% to Dh1.55bn.   
Since  its inception in 1975, UAB has predominantly been a corporate bank,  with a limited offering in retail. All that changed in 2010, however,  when UAB launched its Sadara wealth management programme and an Islamic  banking window, which fuelled a phenomenal 50% growth in retail  deposits. As a result, its retail portfolio exceeded Dh1bn for the first  time in the bank’s history.  Together with the bank’s UAE national and  expatriate bundled loan offering, it also led to an impressive 46%  growth in retail loans.
UAB also launched a new mortgage product  in 2010, which has become a major game-changer in the UAE market and is  currently offering the lowest interest rate of 4.99%. The bank also  opened three new branches in 2010, taking its branch network to a total  of 13.
“We plan to open up to eight more branches to cover all the  [UAE] by the end of 2012,” says Paul Trowbridge, chief executive of  UAB. “This means we will have doubled the size of our physical footprint  over the past three and a half years.”  
UAB remains well  positioned for sustainable and diversified growth based on the retail  banking platform it has built together with its traditional strength in  the corporate banking sector. Indeed, the bank’s corporate division has  continued to focus on the businesses it understands the most –  medium-sized businesses that operate primarily in the manufacturing and  trading sectors.
“Trade finance is where we have made our name  and we will continue to support those with good core businesses. Now it  seems everyone is chasing what we would call our traditional customers –  people who produce and trade real goods – and that is a sector that we  have been servicing for 35 years,” says Mr Trowbridge.
Uruguay
Banco de la Republica O del Uruguay
After an economic slowdown in 2009, Uruguay returned to  impressive growth in 2010, with gross domestic product up 9%. Banco de  la Republica O del Uruguay outstripped even this performance, with the  bank’s 2010 net profits growing by a staggering 261% – which represents  more than 80% of total commercial banking profits in the country. Its  assets and Tier 1 capital also grew by 13.5% and 16%, respectively,  giving the bank a 10% capital adequacy ratio and a 14.43%  return-on-equity.
Banco Republica grew its deposits market share  in Uruguay to 49% in 2010 while also reducing its non-performing loans  ratio to 1.2%. Such growth and performance consolidated further the  bank’s overwhelming leadership in Uruguay. Investments in technology  meant that the bank’s growing branch network was modernised, as was its  ATM system and online and mobile banking services.
Banco  Republica put great effort in bringing banking services to a wider part  of Uruguay’s population and the lender is now proud to say that it banks  more than half the total number of commercial banking customers in the  country. Further, last year the bank launched its microfinance  operation, Republica Microfinanzas, to provide advice and lend to small  businesses and low-income entrepreneurs
in the country. It also  created a ‘green’ credit line to finance or advice on projects related  to clean technology, power efficiency or generally complying with the  country’s environmental rules.
US
Capital One
 
 
 
 
Richard Fairbank, founder, chairman and CEO, Capital One
Many banks in the US are still fighting to get back on their feet  after the catastrophic effects of the financial crisis. Financial  institutions large and small have not yet made it back into the black,  and the rest are dealing with regulatory uncertainty and a sluggish  economy.
But what for some is a risky environment, others see as a  market of opportunities. Starting from 2005, Capital One has been  purchasing banks with the intention to diversify away from its core  credit card business and, as of last year, it became the 12th largest  bank in the US by Tier 1 capital. The bank’s net profits grew by a  phenomenal 757% while the return-on-equity ratio rose to 12.23% from  3.71% in 2009.
Capital One has applied its pricing and risk  assessment models, developed in its credit card segment, to the bank  market with some good results. In the credit card market, while the  average total charge-off ratio of 2011 was 4.74%, Capital One was able  to report a much more competitive 2.9%. The bank’s commercial loans  portfolio also expanded and non-performing loans were well under the  national average.
New products have been tailored to the small  and medium-sized enterprises market, with higher-than-average interest  rates on current accounts and money management solutions for smaller  businesses.
The acquisitions of Hibernia, North Fork and Chevy  Chase Bank over the past six years have given Capital One a network of  nearly 1000 branches. Subsequent investments have upgraded internal  systems throughout the bank and improved its online banking platform.
Uzbekistan
Credit Standard Bank
Uzbekistan remains a largely closed economy with a banking sector  that is mostly state-owned and highly underdeveloped. But there are  signs of progress, and Credit Standard Bank (CSB) has been at the  forefront of this over the past year, with a return on equity of almost  25% in 2010, despite the bank’s high cost base.
Alisher Ibragimov,  chairman of CSB’s management board, is especially proud that the bank  became the first in Uzbekistan to implement a comprehensive risk  management system. This included the introduction of operational risk  management that is in accordance with Basel II standards.
“As a  result, we managed to minimise losses and improve key financial ratios.  Actual profit, loan portfolio and assets figures turned out to be higher  than projected,” says Mr Ibragimov.
The bank is also a local  leader in technology, and has over the past 18 months begun offering  utility bill payments via self-service terminals in its branches – the  bank’s first foray into automated payments.
CSB is now developing  its first internet banking service, which will incorporate the latest  double-step authorisation process using a log-in, password and secret  code sent to the mobile phone of the user.
In 2011, CSB was tasked  with putting into practice the government’s initiative to boost small  business activity. This meant implementing lower fees for small  companies on loans, payments and leasing services, with the result that  the bank’s small business portfolio increased 24% year on year in the  first half of 2011.
“Our key objectives for the coming year are to  expand our branch network, implement new products suitable for the  local market, and develop internet banking systems. We also see our  potential in increasing our share in the retail banking market by  providing high-quality services to our consumer clients,” says Mr  Ibragimov.  
Venezuela
Mercantil Banco Universal
Venezuela is anything but a stable market in which to operate,  and its banks exist under the permanent threat of nationalisation or  government imposition.
That Mercantil Banco Universal’s  performance has been solid in this volatile environment is a notable  achievement, and last year its net profits rose by an impressive 88.4%  and its return-on-equity ratio was 34.5%. Assets and Tier 1 capital also  grew, by 26.4% and 32.7%, respectively. Good and prudent management  meant that its cost-to-income ratio decreased to 40.7%, from 51.5% in  2009, while non-performing loans represented less than 1% of total  loans.
“The financial system has experienced an important growth  in deposits in the past year,” says Gustavo J Vollmer, president of  Mercantil.
“The bank has been able to achieve growth with a  healthy balance sheet and cope with a changing regulatory environment.  Our business model strategy focuses on consolidating the bank’s market  position while keeping its strong loan portfolio quality. The bank has  been able to increase its [activities] while maintaining a tight control  on non-performing loans, which are well below the system’s average. The  bank has been able to achieve this while increasing its financial  margin.”
As for the future, Mr Vollmer says: “We expect the  economy to continue growing in 2012 and the bank to accompany that  growth and continue to expand its loan portfolio.”
Vietnam
Sacombank
 
 
 
 
Tran Xuan Huy, general-director, Sacombank
The first commercial bank to be listed in Vietnam, Sacombank is also the first Vietnamese bank to expand beyond its home market.
Sacombank  has experienced a number of challenges in its domestic market in recent  months. Tran Xuan Huy, the bank’s general-director, says that the bank,  along with most Vietnamese enterprises, has been under pressure from  volatility in interest rates and foreign exchange rates, as well as  rising inflation.
“These uncertainties in the global economy have  also affected unfavourably the Vietnam economy. However, the bank has  well-managed the risks of an economic slowdown and in fact looked for  opportunities for future expansion,” he says.
Despite the  difficult environment, Sacombank has been able to achieve an average  growth rate of between 10% and 15%. It has also been investing in  modernising its operational system, management tools and business  processes, which has given it a stronger platform from which to expand.
One  recent example of the bank’s expansion overseas is the launch of  Sacombank Cambodia in October 2011, which was Vietnam’s first wholly  owned overseas bank. Aside from Cambodia, the bank also sees potential  in the neighbouring market of Laos. “Sacombank will continue to expand  its strategic partnerships, alliances and collaborations at home and  abroad to become a leading modern and universal retail bank in the  region,” says Mr Tran.
In the year ahead, the bank will continue  with the developments it made in 2011. Mr Tran says that the bank’s  priorities are in developing human resources, modernising banking  technology, enhancing financial capacity and expanding the bank’s  operation network.
Yemen
Yemen Commercial Bank 
Yemen Commercial Bank (YCB) continued to show positive growth in  all its main financial indicators in 2010. Particularly striking is the  73.7% annual surge in net profits to YR1.1bn ($5.13m). The  San’a-headquartered bank also achieved a 17.6% growth in assets to  YR94.1bn and a 10.8% increase in Tier 1 capital to YR8.6bn. Meanwhile,  its return on equity rose to 14.8%, following an 8.9% return in 2009.   
However,  its cost-to-income ratio remains noticeably high – nudging up to 87.4%  in 2010 from 86.7% in 2009, and its non-performing loan ratio rose to a  worrying 20.8% from 14.8% in 2009.
The main successes for YCB,  according to chief executive and general manager Ayed Al-Mashni, are  that “the bank has sustained a high level of liquidity and achieved a  growth in net profit of 73.7%, as well as a 20% annual growth in  deposits and a capital adequacy ratio of 20.03%.”
These results  are particularly impressive given the difficult political climate in the  country and the Central Bank of Yemen’s unexpected changes to monetary  policy, which saw it increase the interest rates on deposits twice in  2010.
“Our key challenge was overcoming the negative effect on  profitability resulting from the central bank increasing interests  pricing on deposits twice during the past year while keeping interest  rates lower on treasury bills,” says Mr Al-Mashni.
Of the bank’s YR94.1bn total assets, YR43.6bn is invested in treasury bills and certificates of deposit.
Looking  forward, Mr Al-Mashni says: “We are focused on remaining a leading  Yemeni bank by maintaining high liquidity, strict credit controls and a  focus on investments that carry lower risks and costs.
We also  want to initiate banking relationships with prime correspondent banks in  [place] of those banks that pulled out and ceased their operations in  Yemen due to the prevailing political situation.”
Zambia
Standard Chartered Zambia
Standard Chartered Zambia has benefited from Zambia’s rapid  growth in recent years (gross domestic product expanded 6.6% in real  terms in 2010), which has made the southern African country one of the  most sought-after destinations for investors on the continent.
Standard  Chartered’s annual net profits grew 50% in 2010 to Z$133bn ($26m). That  amounted to a return on equity of 41%, up from 30% a year earlier and  16% in 2008.
Other major indicators were also healthy. The bank  had a cost-to-income ratio of 51% in 2010, down from 63% in 2009.  Non-performing loans fell from 7% of the lender’s portfolio to 2% during  the year.
Standard Chartered developed its retail banking arm  during 2010. It opened four new branches, adding to its network of 21,  and launched a popular ‘Priority Banking’ product which targets  high-net-worth Zambians.
But its main focus was corporate banking.  It gained considerable market share in the agricultural sector, which,  along with copper mining, largely drives the economy. The bank was a  mandated lead arranger (MLA) on a $140m-equivalent syndicated loan for  Zambia’s Food Reserve Agency, allowing the government body to buy  470,000 tonnes of maize from more than 300,000 farmers.
Standard  Chartered also boosted its presence in Zambia’s fast-growing telecoms  industry. It was an MLA on a Z$600bn loan – the largest ever  kwacha-denominated syndicated facility – for telecommunications company  MTN Zambia.
For small businesses without collateral to post, the  bank introduced invoice financing. It offers them up to 80% of the value  of an invoice and has targeted mainly companies which are suppliers and  contractors of mines in Zambia’s northern ‘Copperbelt’ region.
“We  intend to remain the best bank in Zambia; integral to the country’s  development and making a difference in the communities where we  operate,” says Mizinga Melu, Standard Chartered Zambia’s managing  director. “We see opportunities in mining, agriculture and construction  and we intend to work along side the government in these sectors.”
Zimbabwe
Stanbic Bank Zimbabwe
After nearly a decade of decline following president Robert  Mugabe’s land seizures, Zimbabwe’s economy has picked up since early  2009 when the Zimbabwean dollar was scrapped and a multi-currency regime  introduced. Gross domestic product rose 5.7% in real terms that year  and 8.2% in 2010.
Banks in the country have benefited. Stanbic  Bank’s assets grew 69% in 2010 to $340m. Its profits were $7.8m,  amounting to a high return on equity of 34%.
One of the bank’s  main focuses has been lending to small and medium-seized enterprises  (SMEs). Such businesses are key to Zimbabwe’s continued economic growth.  But they still suffer from a lack of access to credit and from banks  mostly only providing short-term loans when they do lend.
Stanbic  has been among the most active banks in trying to resolve this. “SMEs  are a key customer segment for the bank and lending to manufacturers  constituted 47% of our total lending as at the end of 2010,” says Joshua  Tapambgwa, Stanbic’s managing director.
Stanbic has continued to  expand its SME portfolio in 2011. It also doubled the tenors available  for these companies when they borrow.
In the retail market,  Stanbic introduced Visa debit cards this year. “These reduce the need to  carry large cash amounts when travelling internationally [or within  Zimbabwe],” says Mr Tapambgwa.
Moreover, it introduced a scheme  whereby staff of its corporate clients can take out personal loans with  the employer acting as a guarantor. Nearly $10m of such credit has been  provided so far.
Stanbic has been strong in the large-scale  corporate market, too. It has earned more than $1m in fees from deals  such as arranging a $35m loan for Zimbabwe Leaf Tobacco and others for  companies in the cotton sector.


 
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Part 2 




The Banker Awards 2011: Global and regional winners
 
The Banker Awards 2011Awarded by Michael Burke at 6pm,  30th November 2011 at Intercontinental Hotel, Park Lane, London  

Global and regional winners - http://www.thebanker.com/Awards/THE-BANKER-AWARDS2/The-Banker-Awards-2011-Global-and-regional-winnersverified 
copied from above article URL by Andy Cropper - this is being used under fair usage policy at no time do i claim  ownership of this information  and at no pint am i gaining any monetary  payment for this information however i do believe there is huge public  info in this information
 
With the eurozone seemingly teetering on the edge of an abyss and the  US unable to reignite its dormant economy, it is tempting to think that  there is no good news to be found in the banking world. However, yet  again The Banker ’s Bank of the Year awards show that beyond the negative headlines and  protests lies an industry that is still innovating, still growing, and  still generating money all around the world.
 
Global winner & Asia-Pacific  HSBC
 
 
 
HSBC is going through the biggest restructuring in its history.  Having come through the crisis in good shape without any need for  financial support, it might be assumed that the bank had its strategy  all figured out.
But when Stuart Gulliver took over the role of  CEO early this year – the culmination of a 30-year-plus career with the  bank – he decided that a re-examination was needed. Like every bank,  HSBC was faced with operating in a tougher business environment and  adapting to a raft of new regulations. It simply could not just carry on  as before.
The awards’ judges were impressed with the strategy  laid out by Mr Gulliver at the bank’s investor day in May – the first  proper investor day it has ever held – and at the progress made so far.
The  basis of the rethink is that every business should be looked at afresh  to decide whether it fits into the group’s international strategy, in  terms of connectivity between the various parts and also its scope for  rapid growth given the rebalancing of the world economy. On top of this,  all businesses must meet criteria in terms of asset-deposit,  cost-efficiency and return-on-equity ratios. Mr Gulliver has referred to  this as the “five filters” approach and already 14 transactions have  been completed releasing $40bn of risk-weighted assets and reducing the  staff count by 14,000 (13,000 of these went to the new acquirers of the  business). On the horizon are another 40 or so transactions, with Mr  Gulliver aiming to have the process close to completion by the time of  the next investors’ meeting in May 2012.
“What I am trying to do  is create a cohesive logical argument as to why you should own HSBC as  an investor, and it starts with the observation that we sit across a  couple of the massive trends that are taking place in the world. I  believe that the centre of the world economy has already moved from west  to east and from north to south and we are sitting in those geographies  and we have been there for a long time.
“If you believe in those  big macro trends of trade and capital flows to and from and between  emerging markets, then the way our businesses pick them up is firstly  through the commercial banking and global markets areas, which is the  network [the bank is present in more than 80 countries]. Then the wealth  creation that takes place because of that massive gross domestic  product growth is picked up effectively through the retail banking and  wealth management and the private banking pieces.”  
Mr Gulliver  says that what has happened over the years is that the bank has acquired  all kinds of things that don’t necessarily fit into that logic. “So  what I am doing is a portfolio optimisation. It’s the first time this  has been done in the 32 years I have been in the firm.”
The  judges were also impressed with HSBC’s financial performance in 2010 and  the first half of 2011, with profits starting to return to pre-crisis  levels and the bank benefiting from its strong position in Asia where it  also picked up the regional award. There was a dip in the third quarter  due to higher US impairments and the poor conditions in European  capital markets, which have also hit competitors.
But overall  there is reason to be optimistic about HSBC – it is in the right places  and is making itself leaner and fitter to compensate for the tougher  environment overall.
Western Europe  Santander
 
 
 
While many European banks have retreated during the crisis, Santander  has used this time as an opportunity to grow both organically and by  acquisition. Last year it bought the German retail banking operations of  Swedish bank SEB and 318 branches from Royal Bank of Scotland in the  UK. In eastern Europe it acquired Bank Zachodni WBK in Poland, and in  the process boosted its EU franchise.
With funding conditions  uncertain, the bank has made raising deposits a key part of its  strategy. Across the group they rose 22%, and in Spain by 21%. Cost  control has always been a distinguishing feature of the bank and last  year was no exception, with Santander recording a cost-to-income ratio  of 43.3%.
In the bank’s home market, Spain, the economic  challenge has been particularly acute, with high unemployment and  falling property prices. An 8.5% fall in net profits therefore compares  very favourably to the average drop across the sector of 27.4%. The  bank’s two-pronged approach has been to help customers facing  difficulties by easing mortgage repayments while at the same raising  spirits through sports sponsorship.
Santander continued its  successful sponsorship of Formula 1 motor racing while sister bank  Banesto backed tennis champion Rafael Nadal and Spain’s World  Cup-winning football team.  
CEO Alfredo Sáenz says: “Our model is  clear. We have a structure of standalone subsidiaries with their own  balance sheets, commercial strategy, boards of directors and local  supervision. They manage their own liquidity and capital. However, they  work according to the group’s model in several areas. In this way, they  benefit from corporate policies and infrastructure in technology,  branding, procurement, risk management and training and development.  This model allows each unit to think globally and act locally, not only  in western Europe but in Latin America as well.   
“[In Europe]  we’re confident Poland will continue to grow, driven by our bank’s  excellent commercial strategy and the solid economy. In Germany, we will  continue to reap the benefits of the integration of the SEB retail  banking business we acquired this year. We believe Spain can produce  some positive surprises in the medium term. We expect the credit cycle  to start improving in 2012, so that in 2013 and 2014 Spain and Portugal  will generate an annual E2bn in free capital. Another driver of growth  will be Santander Consumer, which specialises in auto financing through  an unmatched franchise across Europe.”
Central and eastern Europe  Sberbank
 
 
 
A year after taking the reins at Sberbank in late 2007, chief  executive German Gref and his newly assembled board approved a  development plan to 2014. Targets included a build-out of investment  banking, and the generation of 5% to 7% of net profits from outside  Russia.
 
The past year represented a breakthrough in meeting those strategic  goals, including the acquisition of investment bank Troika Dialog, and  of a network in eight central and eastern Europe countries from  Austria’s Volksbank. Already enjoying an extraordinary dominance in  Russia, including a 48% share of household deposits, these moves could  transform Sberbank into a genuine international player.
Sberbank is no stranger to managing scale, with a 20,000-branch network  that dwarfs that of some global banking groups. A $29.5bn Tier 1 capital  base is the 40th largest in the world, with a very strong Basel capital  adequacy ratio of 16.8%. But despite that strength, Sberbank is  approaching its international expansion carefully and systematically.
“It  did not make sense to buy a huge network that brought with it asset  quality problems, or to buy one country at a time. We wanted a  cross-country platform that was compact, centrally managed and  digestible. We want to train ourselves in the inter-country integration  process on a small scale before building up the volume through this  platform,” says Anton Karamzin, deputy chief executive and chief  financial officer of Sberbank.
While Sberbank still has its eye on  the giant markets of India and China, and on key eastern European  markets such as Poland and Turkey, Volksbank International (VBI) was a  straightforward acquisition at the right time and price. Valuations  could go lower still over the coming year, but so might asset quality –  which was the reason why Sberbank ejected VBI’s troubled Romanian unit  from the deal.
Integration is also a challenge for Troika Dialog, a  partnership structure absorbed into a giant state-owned retail and  commercial lender. Mr Karamzin – who joined Sberbank from Morgan Stanley  in 2008 – says Troika staff have found the culture of Sberbank’s senior  managers and in-house corporate finance business is not so far removed  from their own.
“The head of mergers and acquisitions for the  combined business comes from Sberbank, and we have set aside money to  allow all investment banking staff to share the same bonus pool. Even  before closing the merger, we swelled the deal pipeline just by looking  at prospects in our own client base,” he says.
Mr Karamzin says  Sberbank’s management was keenly aware that “the history of universal  banks entering investment banking is littered with corpses”. But he  believes this deal will be successful because Sberbank is acquiring  Troika for the right reasons – to extend the products it can offer to  its client base that covers 75% of Russian companies.
Americas  Itaú Unibanco
 
 
 
With the merger of Itaú and Unibanco complete, the Brazilian bank is  now focusing on regional expansion. It already has operations in all the  other Mercosur countries – Argentina, Paraguay and Uruguay – as well as  Chile and is now looking at expanding into key Latin American economies  such as Mexico, Peru and Colombia. Last month it announced that it had  obtained a banking licence in Colombia and intended to build a  greenfield wholesale operation there.
Itaú Unibanco’s strategy is  to develop both retail and wholesale operations across Latin America but  it will only go for retail where it can make an acquisition. With  wholesale it is content to start from scratch and grow organically. This  approach may slow down further retail expansion, as the bank’s CEO,  Roberto Setubal, feels that the high price of assets in Latin America  now makes acquisitions quite difficult to justify.
“When we  announced the merger with Unibanco [in November 2008], we also announced  that we would like to expand internationally and we chose Latin America  as the region that would make the most sense for us,” he says.
“We  needed to prioritise the integration but now that this has been  successfully completed we have more time to devote to regional  expansion.”
Not that Itaú Unibanco has been entirely absent from  this front. It already has close to $100bn of foreign assets (about 13%  of the bank’s total assets) and nearly $14bn of foreign equity, which is  why the judges were able to make this award. The majority of this is in  Latin America.
Itaú’s Argentine operation was founded in 1994  and enlarged with the purchase of Banco del Buen Ayre in 1998. With the  purchase of the Brazilian operations of BankBoston in 2006, the bank  also gained the rights to purchase operations in Chile and Uruguay.  These were exercised later that year and gave the bank an upmarket  retail operation in these countries in contrast to the mass-market  business in Brazil.
“We would like to have retail operations  across the region,” says Mr Setubal. “But it depends on the acquisition  opportunities. With wholesale we can go by ourselves and build from  scratch, but [that is not the case] with retail. With acquisitions, one  of the challenges is the high price of assets in Latin America.”
As  long as this remains the case, it may be that the wholesale part of  Itaú Unibanco’s international expansion is completed first.
Middle East  National Bank of Kuwait
 
 
 
In a year when most of the banks in the Middle East were exerting  every effort to deal with asset quality issues, National Bank of Kuwait  (NBK) was able to deliver strong profitability in 2010, owing to the  impressive quality of its loan book and its robust risk management  practices.
Net profits grew 14% to Kd302m ($1.09bn) and risks  remained well controlled, with capital adequacy standing at a healthy  18.3% and non-performing loans declining to 1.6% from 1.8% in 2009.
The  bank’s credit ratings bear testimony to the quality of its assets and  the strength of its capital base; NBK remains the highest rated bank in  the Middle East.  
As the global financial crisis continued to  play out in 2010, NBK concentrated on strengthening its regional  operations. The bank is now present in 10 countries in the Middle East  and north Africa (MENA) region, as well as in seven other international  locations covering the world’s financial centres. As of year-end 2010,  NBK’s international operations contributed more than 20% of the group’s  net profits.
“Our focus remained on strengthening our regional  operations and increasing cross-selling among the bank’s networks and  business lines. NBK’s Gulf Co-operation Council operations are becoming  more vital for our growth,” says Ibrahim Dabdoub, group chief executive  of NBK. “We have been trying to increase our exposure to Qatar to  maximise our benefit from this promising market.”
NBK already  owns and manages a 30% stake in the International Bank of Qatar. IBQ’s  capital was doubled through a rights issue in September 2011, which will  help support the impressive growth it has achieved – profits rose by  more than 30% in 2010.
Meanwhile, the transformation of NBK’s  other major acquisition – Al Watany Bank of Egypt – is also well under  way. The bank acquired a 93.77% stake in Al Watany in October 2007 –  marking the bank’s entry into the Egyptian market.
“Egypt remains  our largest investment outside Kuwait and strategically Egypt will  remain a core asset under the NBK group,” says Mr Dabdoub. “There is a  significant opportunity to capture the benefits of the country’s recent  reforms and an underserved, large population.”
To further  complement NBK’s regional expansion, NBK Capital, the bank’s investment  banking arm, expanded its asset management operations in early 2010 from  Kuwait, Turkey and the United Arab Emirates to also cover the Egyptian  market.
“NBK’s long-term vision is to be the leading regional  bank, with a strategy that aims to grow the bank’s franchise in  attractive markets in the MENA region, by combining high growth  economies and the right demographic trends,” says Mr Dabdoub.
Africa  Standard Bank
 
 
 
Standard Bank has firmly committed itself to Africa in the past year.  This strategy was made clear in August when it sold 80% of its  Argentine subsidiary, a deal which followed soon after it divested its  36% stake in Russian investment bank Troika Dialog.
The South  African lender’s retrenchment to its traditional stronghold of Africa  makes sense. It has long been a leading bank on the continent — it is  Africa’s biggest by some way in terms of assets and Tier 1 capital — and  it operates in 16 African countries outside of South Africa.
This  leaves it well placed to exploit the rapid economic growth in  sub-Saharan Africa, which is forecast to be about 5% to 6% in real terms  in 2012. “We’ve continued to grow our businesses in all the countries  we operate in,” says Clive Tasker, head of Standard Bank Africa. “We’ve  invested in people, systems and our branch networks. We believe in  Africa’s medium-term growth possibilities.”
In the past year, the  bank has reinforced its strength in investment banking. It was a  bookrunner on a $500m Eurobond for Senegal in May (only the country’s  second to date) and Namibia’s $500m debut international deal in late  October.
Its presence across the continent means it should be  among the banks to benefit the most from the likelihood of increased  sub-Saharan sovereign issuance in the next few years. “We have a close  relationship with all the regulators and finance ministries in the  countries we operate in,” says Mr Tasker. “We talk to them on a frequent  basis about their financing needs.”
The bank has also been at the  forefront of many of Africa’s infrastructure and project financings. In  the past year, the deals it led included major financings for gas  pipelines in Mozambique and Nigeria, and mines in Botswana and the  Democratic Republic of Congo.
Standard Bank has also expanded its  retail banking presence significantly. In Nigeria, it has opened about  60 branches this year alone. “You need to operate at scale [when it  comes to retail banking],” says Mr Tasker. “That entails building a  branch network that enables you to have a large footprint.”
The  bank has managed its growth impressively. Its headline earnings in the  first half of 2011 rose 11% year on year to R6.6bn ($833m), amounting to  a return on equity (ROE) of 14.5%. Further expansion into Africa should  see this rise, given the high profitability of some of its subsidiaries  — ROEs in Uganda, Lesotho and Malawi were all above 30% in the first  six months of the year.
Mr Tasker acknowledges that a looming  slowdown in Europe would affect African economies, but says they are  still likely to remain buoyant. “Growth in Africa is in all likelihood  going to outstrip growth anywhere else in the world, irrespective of  what happens in Europe,” he says.
If correct, Standard Bank’s decision to focus almost solely on Africa will be a very shrewd one.
Global Transaction services  Citi
 
 
 
Despite tough competition, Citi is The Banker’s Transaction Bank of  the Year. The newly created award – which replaces the long-standing  securities services and cash management categories – received more  entries than both of its predecessors combined, and the overall standard  was outstanding. Deutsche Bank, for example, particularly impressed the  judging panel thanks to an innovative and successful year.
Transaction  banking has been on the rise since the onset of the global crisis in  2008, but an unholy trinity of regulation, competition and macroeconomic  woes have made operations increasingly tough. To be top of the pack, it  is no longer enough to pipe cash and payments around the world on  demand.
These fundamentals must remain in place of course, but  successful transaction services houses must also help clients understand  and deal with the complex network of trade flows and regulations on  each end of a deal. Similarly, banks must also help their customers  discover efficiencies and savings in their day-to-day operations. It is  in this advisory-style role that Citi has excelled.
The bank’s  treasury diagnostics offering, for example, was designed to help clients  meet demands for improved visibility and centralised liquidity, working  capital and risk management. The service allows customers to compare  themselves against their peers in Citi’s user base via an online survey  of their policies, processes and practices, which results in a  confidential benchmarking report. Citi then helps companies to find  opportunities to boost the efficiency of treasury operations including  policy and governance, management of liquidity, working capital and  systems and technology. The results have been dramatic; in some cases,  large multinationals have achieved reductions in liquidity buffers and  working capital cash conversion cycles of up to 30%.
It is all  part of a broader trend in Citi’s operations, which changes the focus of  transaction banking to the customer’s operations, an approach that is  also apparent in the bank’s client executive technical consultancy  service. This overall philosophy has attracted fulsome praise from  customers large and small, impressed with the collaborative partnerships  fostered by the bank.
“We are delighted that The Banker is  recognising Citi’s global transaction services business with this  inaugural award. Citi takes pride in delivering a comprehensive range of  solutions to our clients, combined with the local expertise and talent  that we offer through our network in 100 countries,” says Francesco  Vanni d’Archirafi, CEO of Citi global transaction services. “The  competitive landscape will be shaped by significant drivers of the  global economy – globalisation, digitisation and urbanisation. These  mega-trends present opportunities for us to increase our relevance to  our clients.”
Financial Inclusion  Standard Chartered
It is rare these days to come across a bank,  whether in emerging markets or in the developed world, that does not  engage in financial inclusion activities, and this year’s award in this  category received a rich variety of entries from 53 participants,  ranging from small, local lenders to global giants.
Standard  Chartered’s financial inclusion portfolio is impressive for the breadth  of its initiatives, the impact these initiatives have on local  communities, and their international scope. Projects include: reaching  rural villages throughout Asia by deploying mobile ATMs transported by  special vehicles and bringing with them the bank’s staff to provide  support, information and advice on financial planning, savings, loans  and other products; to setting up branches in rural China, such as one  in a small community in Inner Mongolia that provides unsecured loans to  farmers; the development of agricultural finance products across Africa,  Asia and the Middle East; and financial management training for small  entrepreneurs, a programme that has been rolled out to 277 small and  medium-sized companies.
The bank’s financial inclusion portfolio  is also impressive for the level of success it has achieved. Of  particular note is the village banking model that Standard Chartered  developed with Thailand’s Population and Community Development  Association (PDA) and piloted in the village of Ban Nong Pruek.
Standard  Chartered designed a Village development bank (VDB), owned and operated  by the villagers, which it provided with initial seed capital of  $13,000, followed by other capital injections. The VDB’s rules are very  simple: it provides credit for activities that will generate income and  it encourages savings. The aim is to keep villagers out of usury  lenders, who charge up to 20% daily interest. Once villagers have joined  and deposited $2 a month for six consecutive months, they can apply for  a loan, the amount and terms of which will be decided locally by the  VDB committee. In two years, the VDG has gained 70 members, representing  55 of the 100 households of Ban Nong Pruek, and their savings have  grown to $2850; it had also provided 83 loans to 41 borrowers for a  total of $34,923 with interest rates of about 1% per month. As a result  of VDB’s success, Standard Chartered and PDA plan to open other village  banks elsewhere in Thailand.


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