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<div> this is a very very long email in 2 parts so i apologise now (Andy Cropper - Occupy Sheffield) p.s. it is very very very dull <br>
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Part 1 <font face="Arial, Helvetica, sans-serif" size="2" color="black"><font face="Arial, Helvetica, sans-serif" size="2" color="black"><font face="Arial, Helvetica, sans-serif" size="2" color="black"><strong>Country winners</strong><em> - <a href="http://www.thebanker.com/Awards/THE-BANKER-AWARDS2/The-Banker-Awards-2011-Country-winners" rel="nofollow" target="_blank">http://www.thebanker.com/Awards/THE-BANKER-AWARDS2/The-Banker-Awards-2011-Country-winners</a></em></font></font></font><br>
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Part 2 <font face="Arial, Helvetica, sans-serif" size="2" color="black"><font face="Arial, Helvetica, sans-serif" size="2" color="black"><font face="Arial, Helvetica, sans-serif" size="2" color="black"><strong>Global and regional winners</strong><em> - </em><a href="http://www.thebanker.com/Awards/THE-BANKER-AWARDS2/The-Banker-Awards-2011-Global-and-regional-winnersverified" rel="nofollow" target="_blank"><span>http://www.thebanker.com/Awards/THE-BANKER-AWARDS2/</span><wbr><span class="word_break"></span>The-Banker-Awards-2011-Global-and-regional-winnersverified</a> </font></font></font><br>
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Part1 - <font face="Arial, Helvetica, sans-serif" size="2" color="black"><font face="Arial, Helvetica, sans-serif" size="2" color="black"><font face="Arial, Helvetica, sans-serif" size="2" color="black"><font face="Arial, Helvetica, sans-serif" size="2" color="black"><font face="Arial, Helvetica, sans-serif" size="2" color="black"><font face="Arial, Helvetica, sans-serif" size="2" color="black"><strong>Country winners</strong><em>- country winners - <a href="http://www.thebanker.com/Awards/THE-BANKER-AWARDS2/The-Banker-Awards-2011-Country-winners" rel="nofollow" target="_blank">http://www.thebanker.com/Awards/THE-BANKER-AWARDS2/The-Banker-Awards-2011-Country-winners</a></em></font></font></font></font></font></font><br>
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<div><strong>The Banker Awards 2011</strong><strong>Awarded by Michael Burke at 6pm, 30th November 2011 at Intercontinental Hotel, Park Lane, London </strong><strong><br>
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verified and copied from above article URL by Andy Cropper<em>
- 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</em></div>
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<div>The Banker’s panel of judges celebrates the best banks in 147
different countries based on their performances over the past year.</div>
<div> </div>
<div><strong>Afghanistan</strong></div>
<div><strong>Standard Chartered Bank Afghanistan</strong></div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Albania</strong></div>
<div><strong>Banka Kombetare Tregtare</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Andorra</strong></div>
<div><strong>MoraBanc</strong></div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>An asset and liability programme has also been undertaken and
international expansion continues, with upgraded operations in Zurich
and Miami.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Angola</strong></div>
<div> </div>
<div><strong>Banco Millennium Angola</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>José Reino da Costa, BMA’s chief executive</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Antigua and Barbuda</strong></div>
<div> </div>
<div><strong>Scotiabank Antigua</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Marlon Rawlins, country manager, Scotiabank Antigua</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>“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.”</div>
<div><strong>Argentina</strong></div>
<div><strong>Santander Rio</strong></div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Armenia</strong></div>
<div><strong>HSBC Bank Armenia</strong></div>
<div>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%.</div>
<div>“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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Australia</strong></div>
<div> </div>
<div><strong>Westpac</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div>Westpac has performed well over the past year and despite it being a
challenging year, the bank has delivered solid growth in earnings.</div>
<div>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.</div>
<div>“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.</div>
<div>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.”</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div><strong>Azerbaijan</strong></div>
<div><strong>Access Bank</strong></div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Bahamas</strong></div>
<div> </div>
<div><strong>Bank of the Bahamas</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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</div>
<div>Bahamas’s National Insurance Board, the bank’s main shareholder –
something that would significantly boost Bank of Bahamas’s future
revenues.</div>
<div><strong>Bahrain</strong></div>
<div> </div>
<div><strong>Ahli United Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div>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%.</div>
<div>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.</div>
<div>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. </div>
<div>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. </div>
<div>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. </div>
<div>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. </div>
<div>“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.”</div>
<div><strong>Bangladesh</strong></div>
<div> </div>
<div><strong>Janata Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Barbados</strong></div>
<div> </div>
<div><strong>CIBC FirstCaribbean International Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Douglas Parkhill, chief executive, CIBC FirstCaribbean International Bank</div>
<div>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).</div>
<div>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.</div>
<div>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.</div>
<div>“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.”</div>
<div><strong>Belarus</strong></div>
<div> </div>
<div><strong>Priorbank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Sergey Kostyuchenko, chief executive, Priorbank</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div><strong>Belgium</strong></div>
<div> </div>
<div><strong>BNP Paribas Fortis</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Max Jadot, CEO and chairman, BNP Paribas Fortis’s executive board</div>
<div>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%.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Belize</strong></div>
<div><strong>Scotiabank (Belize)</strong></div>
<div>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.</div>
<div>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.</div>
<div>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.”</div>
<div>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.</div>
<div><strong>Benin</strong></div>
<div> </div>
<div><strong>Bank of Africa</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Cheikh Tidiane Ndiaye, managing director, Bank of Africa</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.”</div>
<div><strong>Bermuda</strong></div>
<div> </div>
<div><strong>HSBC Bermuda</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Philip Butterfield, CEO, HSBC Bermuda</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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’.</div>
<div><strong>Bolivia</strong></div>
<div> </div>
<div><strong>Banco Nacional de Bolivia</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Pablo Bedoya Saenz, chief executive, Banco Nacional de Bolivia</div>
<div>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.</div>
<div>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.”</div>
<div>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.”</div>
<div><strong>Bosnia-Herzegovina</strong></div>
<div> </div>
<div><strong>Intesa Sanpaolo Banka</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Almir Krkalic, chief executive, Intesa Sanpaolo Banka</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div><strong>Botswana</strong></div>
<div> </div>
<div><strong>Stanbic Bank Botswana</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Leina Gabaraane, head, Stanbic Bank Botswana</div>
<div>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.”</div>
<div>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.</div>
<div>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.</div>
<div> </div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Brazil</strong></div>
<div><strong>Itaú Unibanco</strong></div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.”</div>
<div>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.</div>
<div><strong>Brunei</strong></div>
<div> </div>
<div><strong>Baiduri Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Pierre Imhof, chief executive officer at Baiduri Bank</div>
<div>Last year was challenging for Baiduri Bank, but the bank has proved to be resilient to the various market challenges.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>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.”</div>
<div><strong>Bulgaria</strong></div>
<div> </div>
<div><strong>UniCredit Bulbank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Levon Hampartzoumian, chief executive, UniCredit Bulbank</div>
<div>Falling profits, shrinking portfolios and rising non-performing loans
(NPLs) characterised the Bulgarian market in 2010, as the European
economic slowdown hit home.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Burkina Faso</strong></div>
<div><strong>Ecobank Burkina Faso</strong></div>
<div>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%.</div>
<div>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%.</div>
<div>The lender targeted corporate banking opportunities, particular
those involving the infrastructure, construction, building materials,
manufacturing and tourism sectors.</div>
<div>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.</div>
<div>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.</div>
<div>If Burkina Faso’s economic growth is sustained over the next few years, Ecobank is likely to keep on reaping the benefits.</div>
<div><strong>Burundi</strong></div>
<div><strong>Ecobank Burundi</strong></div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>The bank also decided to undercut its competitors when it came to foreign exchange sales, which also boosted its market share.</div>
<div>It recently launched a prominent advertising campaign and will
continue with this to build up its deposits and corporate banking
business.</div>
<div>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.</div>
<div><strong>Cambodia</strong></div>
<div> </div>
<div><strong>ANZ Royal Bank </strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Stephen Higgins, CEO, ANZ Royal Bank in Cambodia</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>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.”</div>
<div><strong>Cameroon</strong></div>
<div> </div>
<div><strong>UBA Cameroon</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Georges Wega, chief executive, UBA Cameroon</div>
<div>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.</div>
<div>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%.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Canada</strong></div>
<div> </div>
<div><strong>Royal Bank of Canada</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Gord Nixon, chief executive, Royal Bank of Canada</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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].”</div>
<div><strong>Cayman Islands</strong></div>
<div> </div>
<div><strong>Scotiabank & Trust (Cayman)</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Doug Cochrane, managing director, Scotiabank & Trust (Cayman)</div>
<div>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.</div>
<div>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.</div>
<div>“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.”</div>
<div>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.</div>
<div>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.</div>
<div><strong>Central African Republic</strong></div>
<div><strong>Ecobank Centrafrique</strong></div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Chile</strong></div>
<div> </div>
<div><strong>Banco Santander Chile</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Claudio Melandri, chief executive, Banco Santander Chile</div>
<div>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.</div>
<div>“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.”</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>China</strong></div>
<div> </div>
<div><strong>ICBC</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Jiang Jianqing, chairman, ICBC</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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%.</div>
<div>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.</div>
<div><strong>Colombia</strong></div>
<div> </div>
<div><strong>Banco de Bogota</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Alejandro Figueroa, chief executive, Banco de Bogota</div>
<div>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.</div>
<div>The $1.92bn acquisition of BAC-Credomatic has provided Banco de
Bogota with some highly complementary business activities throughout
its operations.</div>
<div>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.</div>
<div>“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.”</div>
<div>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.</div>
<div><strong>Costa Rica</strong></div>
<div><strong>Banco de Costa Rica</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Mario Rivera, chief executive, Banco de Costa Rica</div>
<div>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.</div>
<div>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%.</div>
<div>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.</div>
<div>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.”</div>
<div><strong>Croatia</strong></div>
<div><strong>Privredna Banka Zagreb</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Bozo Prka, chief executive, Privredna Banka Zagreb</div>
<div>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.</div>
<div>Profits grew 6.5% in 2010, and have accelerated to almost 20% growth in the third quarter of 2011.</div>
<div>“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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div><strong>Cyprus</strong></div>
<div><strong>Bank of Cyprus</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Andreas Eliades, chief executive, Bank of Cyprus</div>
<div>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.</div>
<div>“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. </div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Czech Republic</strong></div>
<div><strong>Ceskoslovenska obchodni banka</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Pavel Kavanek, chief executive, Ceskoslovenska obchodni banka</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Democratic Republic of Congo</strong></div>
<div><strong>Rawbank</strong></div>
<div>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.”</div>
<div> </div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Denmark</strong></div>
<div><strong>Nordea Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Christian Clausen, CEO, Nordea Bank</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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. </div>
<div>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.</div>
<div>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.</div>
<div><strong>Djibouti</strong></div>
<div><strong>International Commercial Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Podila Phanindra, head, International Commercial Bank in Djibouti</div>
<div>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.</div>
<div>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.</div>
<div>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%.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Dominican Republic</strong></div>
<div><strong>Banco Multiple Leon</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Carlos Guillermo León Nouel, president, Banco Multiple Leon</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.”</div>
<div>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.</div>
<div><strong>Ecuador</strong></div>
<div><strong>Produbanco</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Abelardo Pachano Bertero, vice-president, Produbanco</div>
<div>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.</div>
<div>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.</div>
<div>Investment in technology allowed for the launch of a new mobile
banking application and improved, safer online banking services.</div>
<div>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.</div>
<div><strong>Egypt</strong></div>
<div><strong>Commercial International Bank</strong></div>
<div>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.</div>
<div>Businesses in the country have been under extreme stress as a result.</div>
<div>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.</div>
<div>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.</div>
<div>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.”</div>
<div>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.”</div>
<div><strong>Estonia</strong></div>
<div><strong>SEB Pank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Riho Unt, chief executive, SEB’s operations in Estonia</div>
<div>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%.</div>
<div>“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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div><strong>Ethiopia</strong></div>
<div><strong>Dashen Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Lulseged Teferi, head, Dashen Bank</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Finland</strong></div>
<div><strong>OP-Pohjola Group</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Reijo Karhinen, executive chairman, OP-Pohjola</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>France</strong></div>
<div><strong>Confédération Nationale du Crédit Mutuel</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Alain Fradin, chief executive, Confédération Nationale du Crédit Mutuel</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Gambia</strong></div>
<div><strong>Trust Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Pa Njie, managing director, Trust Bank</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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</div>
<div>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.</div>
<div>Also in the past year, Trust Bank upgraded its internet banking service, which now allows customers to make payments online.</div>
<div>“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.</div>
<div><strong>Georgia</strong></div>
<div><strong>TBC Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Vakhtang Butskhrikidze, chief executive, TBC Bank</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Germany</strong></div>
<div><strong>Commerzbank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Eric Strutz, chief financial officer, Commerzbank</div>
<div>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.</div>
<div>“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.</div>
<div>“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.”</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div><strong>Ghana</strong></div>
<div><strong>Ghana Commercial Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Simon Dornoo, managing director, Ghana Commercial Bank</div>
<div>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.</div>
<div>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.”</div>
<div>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.</div>
<div>This year looks better still. Net income for the first nine months rose 7% to 38m cedis.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Greece</strong></div>
<div><strong>Alpha Bank</strong></div>
<div>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%.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Guatemala</strong></div>
<div><strong>Banco Industrial</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Diego Pulido, chief executive, Banco Industrial</div>
<div>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.</div>
<div>“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.</div>
<div>“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.”</div>
<div>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%.”</div>
<div>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.</div>
<div><strong>Guinea</strong></div>
<div><strong>International Commercial Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Ananta Padmanabhan, head, International Commercial Bank</div>
<div>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.</div>
<div>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.</div>
<div>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%.</div>
<div>And despite Guinea’s political problems, ICB has not stopped seeking
new customers. As such, its loan portfolio grew 17% in 2010.</div>
<div>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.</div>
<div>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.”</div>
<div>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.</div>
<div><strong>Guinea-Bissau</strong></div>
<div><strong>Ecobank Guinea-Bissau</strong></div>
<div>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%.</div>
<div>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).</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Guyana</strong></div>
<div><strong>Scotiabank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Amanda St Aubyn, country manager, Scotiabank</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Honduras</strong></div>
<div><strong>Banco del Pais</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>María del Rosario Selman-Housein, chief executive, Banco del Pais</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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”.</div>
<div><strong>Hong Kong</strong></div>
<div><strong>HSBC</strong></div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Hungary</strong></div>
<div><strong>K&H Bank</strong></div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>India</strong></div>
<div><strong>Axis Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Shikha Sharma, managing director and CEO, Axis Bank</div>
<div>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.</div>
<div>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.”</div>
<div>However, the bank has been able to gain market share and has performed well in terms of profitability.</div>
<div>“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.</div>
<div>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.”</div>
<div>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.</div>
<div><strong>Indonesia</strong></div>
<div><strong>Bank Rakyat Indonesia</strong></div>
<div>Bank Rakyat Indonesia’s growth in the past year has mirrored the economic growth seen throughout Indonesia.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Iran</strong></div>
<div><strong>Parsian Bank</strong></div>
<div>Since beginning operations in January 2002, Bank Parsian has seen continuous growth and is today Iran’s largest private bank. </div>
<div>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.
</div>
<div>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.</div>
<div>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.</div>
<div>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. </div>
<div>“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.”</div>
<div><strong>Israel</strong></div>
<div><strong>Bank Hapoalim</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Zion Kenan, chief executive, Bank Hapoalim</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Italy</strong></div>
<div><strong>Intesa Sanpaolo</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Corrado Passera, CEO, Intesa Sanpaolo</div>
<div>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?</div>
<div>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. </div>
<div>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.”</div>
<div>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.</div>
<div>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.</div>
<div><strong>Jamaica</strong></div>
<div><strong>National Commercial Bank Jamaica</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Patrick Hylton, group managing director, NCB Jamaica</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>“In line with enhancements to the local securities regulatory
regime, we [also] plan to introduce a new securities product within the
next year.”</div>
<div><strong>Japan</strong></div>
<div><strong>Mizuho Financial Group</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Yasuhiro Sato, CEO, Mizuho Financial Group</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>Another of the organisation’s plans is to bring a unified management structure to the group, turning Mizuho into “one bank”.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Jordan</strong></div>
<div><strong>The Housing Bank for Trade and Finance</strong></div>
<div>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.</div>
<div>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. </div>
<div>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. </div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Kazakhstan</strong></div>
<div><strong>Halyk Bank</strong></div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Kenya</strong></div>
<div><strong>Co-operative Bank of Kenya</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Gideon Muriuki, managing director, Co-operative Bank of Kenya</div>
<div>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.</div>
<div>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.</div>
<div>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.”</div>
<div>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.</div>
<div>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.</div>
<div>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.”</div>
<div><strong>Kosovo</strong></div>
<div><strong>ProCredit Bank Kosovo</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Philip Sigwart, chief executive, ProCredit Bank Kosovo</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Kuwait</strong></div>
<div><strong>National Bank of Kuwait</strong></div>
<div>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%.</div>
<div>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. </div>
<div>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.</div>
<div>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. </div>
<div>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. </div>
<div>“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.”</div>
<div>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.</div>
<div><strong>Kyrgyzstan</strong></div>
<div><strong>Demir Kyrgyz International Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Sevki Sarilar, general manager, Demir Kyrgyz International Bank</div>
<div>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%.</div>
<div>“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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Laos</strong></div>
<div><strong>Banque Pour Le Commerce Exterieur Lao</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Sonexay Sitphaxay, CEO, BCEL</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>“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. </div>
<div>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.</div>
<div>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.</div>
<div><strong>Latvia</strong></div>
<div><strong>SEB Banka</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Ainars Ozols, chief executive, SEB Banka in Latvia</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Lebanon</strong></div>
<div><strong>Blom Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Saad Azhari, chairman and general manager, Blom Bank</div>
<div>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.</div>
<div>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. </div>
<div>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.</div>
<div>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.” </div>
<div>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.</div>
<div>“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.</div>
<div>“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.”</div>
<div><strong>Lesotho</strong></div>
<div><strong>Standard Lesotho Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Mpho Vumbukani, head, Standard Lesotho Bank</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>Mpho Vumbukani, head of Standard Lesotho Bank, says that such SME lending will be one of the bank’s priorities next year too.</div>
<div>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.</div>
<div><strong>Luxembourg</strong></div>
<div><strong>BGL BNP Paribas</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Eric Martin, CEO, BGL BNP Paribas</div>
<div>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%.</div>
<div>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.</div>
<div>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.</div>
<div>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.”</div>
<div><strong>Macao</strong></div>
<div><strong>ICBC (Macau)</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Zhu Xiaoping, chairman of the board, ICBC (Macau)</div>
<div>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.</div>
<div>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).</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Macedonia</strong></div>
<div><strong>Komercijalna Banka AD Skopje</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Hari Kostov, chief executive, Komercijalna Banka</div>
<div>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%.</div>
<div>“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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Malawi</strong></div>
<div><strong>Standard Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Charles Mudiwa, head, Standard Bank in Malawi</div>
<div>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).</div>
<div>“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.”</div>
<div>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.</div>
<div>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.</div>
<div>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.”</div>
<div><strong>Malaysia</strong></div>
<div><strong>Public Bank</strong></div>
<div>Malaysia’s banks are competing in a market where competition is intensifying and interest margins are narrowing.</div>
<div>“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.</div>
<div>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.</div>
<div>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.</div>
<div>The bank also performs well compared to its peers in terms of return on equity, asset quality, productivity and cost efficiency.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Mali</strong></div>
<div><strong>Ecobank Mali</strong></div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Malta</strong></div>
<div><strong>HSBC Bank Malta </strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Alan Richards, CEO, HSBC Bank Malta</div>
<div>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%.</div>
<div>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.”</div>
<div>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.</div>
<div>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.</div>
<div>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%.</div>
<div><strong>Mauritius</strong></div>
<div><strong>Barclays Mauritius</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Ravin Dajee, managing director, Barclays Mauritius</div>
<div>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%.</div>
<div>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).</div>
<div>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.”</div>
<div>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.</div>
<div>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.</div>
<div><strong>Mexico</strong></div>
<div><strong>Banorte</strong></div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.”</div>
<div>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.</div>
<div><strong>Moldova</strong></div>
<div><strong>Victoriabank</strong></div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Mongolia</strong></div>
<div><strong>Golomt Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>John Finigan, CEO, Golomt Bank</div>
<div>John Finigan, CEO of Golomt Bank, describes Mongolia as the epicentre
of global growth. “It is the alpha on China’s beta,” he says.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>In the past year, the bank has opened 21 new offices and increased its number of ATMs by 40%.</div>
<div>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.</div>
<div><strong>Montenegro</strong></div>
<div><strong>Erste Bank AD Podgorica</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Aleksa Lukic, chief executive in Montenegro, Erste Bank</div>
<div>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%.</div>
<div>“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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Morocco</strong></div>
<div><strong>Attijariwafa Bank</strong></div>
<div>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%.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Mozambique</strong></div>
<div><strong>Millennium BIM</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Manuel Marecos Duarte, head, Millennium BIM</div>
<div>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.</div>
<div>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.</div>
<div>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.”</div>
<div>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.”</div>
<div>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.</div>
<div>In the corporate market, the lender has been targeting businesses
supporting Mozambique’s rapidly growing mining industry, including
caterers and transport and construction companies.</div>
<div><strong>Namibia</strong></div>
<div><strong>First National Bank of Namibia</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Ian Leyenaar, chief executive, First National Bank of Namibia</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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%.</div>
<div><strong>Nepal</strong></div>
<div><strong>Bank of Kathmandu</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Ajay Shrestha, CEO, Bank of Kathmandu</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.”</div>
<div>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.</div>
<div>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.”</div>
<div><strong>Netherlands</strong></div>
<div><strong>ING Bank</strong></div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>New Zealand</strong></div>
<div><strong>ASB Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Barbara Chapman, chief executive and managing director, ASB Bank</div>
<div>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.</div>
<div> “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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div><strong>Nicaragua</strong></div>
<div><strong>Banco de la Produccion</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Luis Rivas, general manager, Banco de la Produccion</div>
<div>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%.</div>
<div>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</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Niger</strong></div>
<div><strong>Ecobank Niger</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Moukaramou Chanou, managing director, Ecobank Niger</div>
<div>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.</div>
<div>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.</div>
<div>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%.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>Next year, says Mr Chanou, Ecobank will target Niger’s nascent oil and mining industries.</div>
<div><strong>Nigeria</strong></div>
<div><strong>Guaranty Trust Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Segun Agbaje, head, Guaranty Trust Bank</div>
<div>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.</div>
<div>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.</div>
<div>This year should be better still. Following strong third quarter results, it is on course to make an ROE of 23% to 25%.</div>
<div>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.</div>
<div>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.”</div>
<div> </div>
<div>He is confident that this platform will allow GTB to have 10 million retail customers within three years.</div>
<div>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.</div>
<div>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.”</div>
<div><strong>Norway</strong></div>
<div><strong>DNB</strong></div>
<div>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.</div>
<div>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</div>
<div>Nor, moved to a single brand, DNB, which will cut branding and marketing costs.</div>
<div>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.</div>
<div>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).</div>
<div><strong>Oman</strong></div>
<div><strong>BankMuscat</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>AbdulRazak Ali Issa, chief executive, BankMuscat</div>
<div>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.</div>
<div>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.</div>
<div>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. </div>
<div>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. </div>
<div>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. </div>
<div>“Subject to regulatory approvals, BankMuscat is well positioned to
launch Islamic banking services,” says AbdulRazak Ali Issa, chief
executive of BankMuscat.</div>
<div><strong>Pakistan</strong></div>
<div><strong>Allied Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Zia Ijaz, group chief, Allied Bank commercial and retail banking group</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Paraguay</strong></div>
<div><strong>Sudameris Ban</strong> k</div>
<div>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.</div>
<div>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.</div>
<div>“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.”</div>
<div>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.</div>
<div>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.</div>
<div><strong>Peru</strong></div>
<div><strong>Banco de Credito del Peru</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Alvaro Correa, chief financial officer, Banco de Credito del Peru</div>
<div>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%.</div>
<div>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.”</div>
<div>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.</div>
<div>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.</div>
<div><strong>Philippines</strong></div>
<div><strong>BPI</strong></div>
<div>As BPI celebrated its 160th anniversary in 2011, the bank was
working toward raising standards with a focus on customer experience and
market expansion.</div>
<div>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:</div>
<div>“We focused on growing our loan book to improve our loan-to-deposit ratio rather than expanding our asset base.”</div>
<div>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.</div>
<div>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.</div>
<div>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.”</div>
<div><strong>Poland</strong></div>
<div><strong>PKO Bank Polski</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Zbigniew Jagiello, chief executive, PKO Bank Polski</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Portugal</strong></div>
<div><strong>Banco Santander Totta </strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Nuno Amado, CEO, Banco Santander Totta</div>
<div>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%.</div>
<div>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.</div>
<div>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.”</div>
<div>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.</div>
<div><strong>Puerto Rico</strong></div>
<div><strong>Popular</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Richard Carrión, chief executive, Popular</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.”</div>
<div><strong>Qatar</strong></div>
<div><strong>Qatar National Bank </strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Ali Shareef Al-Emadi, group chief executive, Qatar National Bank</div>
<div>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.</div>
<div>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. </div>
<div>“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.</div>
<div>“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%.”</div>
<div>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. </div>
<div>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.</div>
<div>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.</div>
<div><strong>Republic of Congo</strong></div>
<div><strong>Ecobank Congo</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Lazare Noulekou, managing director, Ecobank Congo</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>Ecobank has managed, moreover, to make itself far more productive.
Its cost-to-income ratio fell from 84% in 2009 to 65% in 2010.</div>
<div>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.</div>
<div><strong>Romania</strong></div>
<div><strong>BRD-Société Générale</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Guy Poupet, chief executive, BRD-SG</div>
<div>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%.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Russia</strong></div>
<div><strong>Nomos Bank</strong></div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div><strong>Rwanda</strong></div>
<div><strong>Bank of Kigali</strong></div>
<div>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.</div>
<div>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.</div>
<div>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.”</div>
<div>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%.</div>
<div>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.</div>
<div><strong>Saudi Arabia</strong></div>
<div><strong>Samba Financial Group</strong></div>
<div> </div>
<div>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. </div>
<div>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%.</div>
<div>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. </div>
<div>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. </div>
<div>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.</div>
<div>“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.</div>
<div>“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.”</div>
<div><strong>Senegal</strong></div>
<div><strong>Ecobank Senegal</strong></div>
<div>Senegal’s middle class is growing quickly. But tapping into it has not always proved easy for the country’s banks.</div>
<div>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.</div>
<div>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.”</div>
<div>Ecobank does not yet provide credit to Senegalese students, but plans to do so in future and also offer them other products.</div>
<div>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.</div>
<div>Next year Ecobank will continue to grow its network of 35 branches, 20 of which are in the capital, Dakar.</div>
<div>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%.</div>
<div>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%.</div>
<div>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.</div>
<div><strong>Serbia</strong></div>
<div><strong>Banca Intesa Beograd</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Draginja Djuric, chief executive, Banca Intesa Beograd</div>
<div>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.</div>
<div>“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.</div>
<div>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</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Sierra Leone</strong></div>
<div><strong>International Commercial Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Viswanathan Sundaram, chief executive, International Commercial Bank</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>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.</div>
<div>Its profitability was still low, however, with its return on equity being just 5.4%.</div>
<div>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%.</div>
<div>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.</div>
<div>The result was that the bank significantly increased its deposit base and number of customers.</div>
<div><strong>Singapore</strong></div>
<div><strong>DBS</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Piyush Gupta, CEO, DBS Group</div>
<div>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.</div>
<div>“Our ambition for the next five to 10 years is clearly [focused] on Asia,” says Piyush Gupta, CEO of DBS Group.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Slovakia</strong></div>
<div><strong>Postova Banka</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Marek Tarda, chief executive, Postova Banka</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div><strong>Slovenia</strong></div>
<div><strong>SKB Banka</strong></div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>South Africa</strong></div>
<div><strong>Nedbank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Mike Brown, chief executive, Nedbank</div>
<div>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.</div>
<div>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.</div>
<div>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.”</div>
<div>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.</div>
<div>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.”</div>
<div>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.</div>
<div>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.”</div>
<div><strong>South Korea</strong></div>
<div><strong>Woori Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Lee Soon-woo, CEO, Woori Bank</div>
<div>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.</div>
<div>“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.</div>
<div>“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.</div>
<div>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.</div>
<div>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.</div>
<div>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).</div>
<div><strong>Spain</strong></div>
<div><strong>Santander</strong></div>
<div>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.</div>
<div>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%.</div>
<div>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.”</div>
<div>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.</div>
<div>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.”</div>
<div><strong>Sri Lanka</strong></div>
<div><strong>Commercial Bank of Ceylon</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Amitha Gooneratne, managing director and CEO, Commercial Bank of Ceylon</div>
<div>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. </div>
<div>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.</div>
<div>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.”</div>
<div>The bank reduced its NPL ratio from 6.84% in 2009 to 4.22% in 2010.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Swaziland</strong></div>
<div><strong>First National Bank of Swaziland</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>David Wright, chief executive, First National Bank of Swaziland</div>
<div>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.</div>
<div>This, coupled with a competitive and fairly mature corporate market, has made life difficult for Swaziland’s banks.</div>
<div>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.</div>
<div>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.</div>
<div>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).</div>
<div>For corporate customers, FNB launched Swaziland’s first electronic cash management service.</div>
<div>“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.</div>
<div><strong>Sweden</strong></div>
<div><strong>SEB</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Annika Falkengren, group chief executive, SEB</div>
<div>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%.</div>
<div>“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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Switzerland</strong></div>
<div><strong>Credit Suisse</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Hans-Ulrich Meister, chief executive, Credit Suisse Switzerland</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Taiwan</strong></div>
<div><strong>Chinatrust Commercial Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Frank Shih, chief strategy officer, Chinatrust</div>
<div>Given the over-saturated nature of the Taiwanese banking market,
Chinatrust has ambitions to go beyond Taiwan, to be a premier bank in
Asia.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Tanzania</strong></div>
<div><strong>Standard Chartered Tanzania</strong></div>
<div>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.</div>
<div>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.</div>
<div>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%.</div>
<div>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.</div>
<div>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.”</div>
<div>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.</div>
<div>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.</div>
<div><strong>Thailand </strong></div>
<div><strong>Bangkok Bank </strong></div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Togo</strong></div>
<div><strong>Ecobank Togo</strong></div>
<div>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%.</div>
<div>Expenses were also brought down in 2010, with Ecobank’s cost-to-income ratio falling to 63% from 67% in 2009.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Trinidad and Tobago</strong></div>
<div><strong>Republic Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div>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.</div>
<div>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.</div>
<div>“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.”</div>
<div>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.”</div>
<div><strong>Tunisia</strong></div>
<div><strong>Banque de Tunisie</strong></div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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%.</div>
<div>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.</div>
<div><strong>Turkey</strong></div>
<div><strong>Yapi Kredi Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Faik Acikalin, chief executive, Yapi Kredi Bank</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div><strong>Turkmenistan</strong></div>
<div><strong>Halk Bank</strong></div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Turks and Caicos Islands</strong></div>
<div><strong>Scotiabank (Turks and Caicos)</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Cecil Arnold, managing director, Scotiabank (Turks and Caicos)</div>
<div>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.</div>
<div>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%.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Uganda</strong></div>
<div><strong>Crane Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Ali Kalan, managing director, Crane Bank</div>
<div>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.</div>
<div>Crane Bank has managed to obtain such profits chiefly by quickly expanding its loan portfolio. This rose 70% in 2010 alone.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>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.”</div>
<div><strong>UK</strong></div>
<div><strong>Santander</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Ana Patricia Botín, CEO, Santander UK</div>
<div>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%.</div>
<div>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.</div>
<div>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.</div>
<div>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%.</div>
<div>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.”</div>
<div><strong>Ukraine</strong></div>
<div><strong>Privat Bank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Alexander Dubilet, chief executive, Privat Bank</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div><strong>United Arab Emirates</strong></div>
<div><strong>United Arab Bank</strong></div>
<div>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.</div>
<div>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. </div>
<div>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.</div>
<div>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.</div>
<div>“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.” </div>
<div>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.</div>
<div>“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.</div>
<div><strong>Uruguay</strong></div>
<div><strong>Banco de la Republica O del Uruguay</strong></div>
<div>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.</div>
<div>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.</div>
<div>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</div>
<div>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.</div>
<div><strong>US</strong></div>
<div><strong>Capital One</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Richard Fairbank, founder, chairman and CEO, Capital One</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Uzbekistan</strong></div>
<div><strong>Credit Standard Bank</strong></div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>“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. </div>
<div><strong>Venezuela</strong></div>
<div><strong>Mercantil Banco Universal</strong></div>
<div>Venezuela is anything but a stable market in which to operate, and
its banks exist under the permanent threat of nationalisation or
government imposition.</div>
<div>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.</div>
<div>“The financial system has experienced an important growth in
deposits in the past year,” says Gustavo J Vollmer, president of
Mercantil.</div>
<div>“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.”</div>
<div>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.”</div>
<div><strong>Vietnam</strong></div>
<div><strong>Sacombank</strong></div>
<div> </div>
<div> </div>
<div> </div>
<div> </div>
<div>Tran Xuan Huy, general-director, Sacombank</div>
<div>The first commercial bank to be listed in Vietnam, Sacombank is also the first Vietnamese bank to expand beyond its home market.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div><strong>Yemen</strong></div>
<div><strong>Yemen Commercial Bank </strong></div>
<div>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. </div>
<div>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.</div>
<div>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%.”</div>
<div>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.</div>
<div>“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.</div>
<div>Of the bank’s YR94.1bn total assets, YR43.6bn is invested in treasury bills and certificates of deposit.</div>
<div>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.</div>
<div>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.”</div>
<div><strong>Zambia</strong></div>
<div><strong>Standard Chartered Zambia</strong></div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.”</div>
<div><strong>Zimbabwe</strong></div>
<div><strong>Stanbic Bank Zimbabwe</strong></div>
<div>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.</div>
<div>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%.</div>
<div>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.</div>
<div>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.</div>
<div>Stanbic has continued to expand its SME portfolio in 2011. It also
doubled the tenors available for these companies when they borrow.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<br>
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Part 2 <br>
<div class="mtl fbDocument">
<div><strong><br>
<br>
<br>
The Banker Awards 2011: Global and regional winners</strong></div>
<div> </div>
<div><strong>The Banker Awards 2011</strong><strong>Awarded by Michael Burke at 6pm, 30th November 2011 at Intercontinental Hotel, Park Lane, London </strong><strong></strong><em> </em><strong><br>
<br>
Global and regional winners</strong><em> - </em><a href="http://www.thebanker.com/Awards/THE-BANKER-AWARDS2/The-Banker-Awards-2011-Global-and-regional-winnersverified" rel="nofollow" target="_blank"><span>http://www.thebanker.com/Awards/THE-BANKER-AWARDS2/</span><wbr><span class="word_break"></span>The-Banker-Awards-2011-Global-and-regional-winnersverified</a> <br>
copied from above article URL by Andy Cropper<em>
- 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</em></div>
<div> </div>
<div>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 <em>The Banker</em> ’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.</div>
<div> </div>
<div><strong>Global winner & Asia-Pacific </strong> HSBC</div>
<div> </div>
<div> </div>
<div> </div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>“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.” </div>
<div>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.”</div>
<div>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.</div>
<div>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.</div>
<div><strong>Western Europe</strong> Santander</div>
<div> </div>
<div> </div>
<div> </div>
<div>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.</div>
<div>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%.</div>
<div>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.</div>
<div>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. </div>
<div>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. </div>
<div>“[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.”</div>
<div><strong>Central and eastern Europe</strong> Sberbank</div>
<div> </div>
<div> </div>
<div> </div>
<div>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.</div>
<div> </div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>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.</div>
<div><strong>Americas</strong> Itaú Unibanco</div>
<div> </div>
<div> </div>
<div> </div>
<div>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.</div>
<div>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.</div>
<div>“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.</div>
<div>“We needed to prioritise the integration but now that this has been
successfully completed we have more time to devote to regional
expansion.”</div>
<div>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.</div>
<div>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.</div>
<div>“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.”</div>
<div>As long as this remains the case, it may be that the wholesale part
of Itaú Unibanco’s international expansion is completed first.</div>
<div><strong>Middle East</strong> National Bank of Kuwait</div>
<div> </div>
<div> </div>
<div> </div>
<div>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.</div>
<div>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.</div>
<div>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. </div>
<div>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.</div>
<div>“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.”</div>
<div>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.</div>
<div>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.</div>
<div>“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.”</div>
<div>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.</div>
<div>“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.</div>
<div><strong>Africa</strong> Standard Bank</div>
<div> </div>
<div> </div>
<div> </div>
<div>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.</div>
<div>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.</div>
<div>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.”</div>
<div>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.</div>
<div>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.”</div>
<div>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.</div>
<div>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.”</div>
<div>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.</div>
<div>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.</div>
<div>If correct, Standard Bank’s decision to focus almost solely on Africa will be a very shrewd one.</div>
<div><strong>Global Transaction services</strong> Citi</div>
<div> </div>
<div> </div>
<div> </div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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%.</div>
<div>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.</div>
<div>“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.”</div>
<div><strong>Financial Inclusion</strong> Standard Chartered</div>
<div>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.</div>
<div>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.</div>
<div>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.</div>
<div>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.<br>
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