COUNTRY INDEX
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ALBANIA |
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Best Bank: OTP Bank Albania |
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Albania has emerged as one of the most desirable smaller markets in central and eastern Europe, and Hungarian banking group OTP has worked to secure a stronger footing in the country, including through its acquisition of the Albanian business of Greece’s Alpha Bank. The legal merger was completed in December 2022.
OTP Bank Albania’s profitability metrics were already good before the merger. Its standalone net profit reached L3 billion ($30.7 million) in 2022, an increase of 61% year on year, giving it a cost-to-income ratio of 44% and a return on equity of 27.5%.
Post-merger, OTP Bank Albania now enjoys a top-three position in loans. OTP Bank Albania’s chief executive, Bledar Shella, can now focus on market-share gains through organic means. However, the bank also grew organically prior to the merger’s completion, seeing a 6% increase in lending in 2022 and an 8% increase in deposits on a standalone basis, while its non-performing loan ratio fell to 4.48%.
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ARMENIA |
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Best Bank: Ardshinbank |
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Geopolitical tensions in the region have provided a welcome boost to Armenian banks’ profitability. Ardshinbank stood out during the awards period for making the most of this opportunity under the leadership of chairman of the management board Artak Ananyan. Profit before tax more than quadrupled in 2022, from Dram16 billion ($42 million) to Dram77 billion.
The main driver for this was the remittance business. Remittances brought in Dram16.7 billion, compared with Dram1.75 billion in 2021, driven in large part by Russians relocating to the country, which drove an increase in the bank’s customer base of 30% over the year. As well as remittances, the bank’s brokerage and custodian services also saw strong growth.
The bank launched a number of innovations over the year, establishing a small and medium-sized enterprise business, private-banking and investment-banking directorates in the review period.
It also continued to expand its branch network, joined Apple Pay and Google Pay, and started issuing premium digital cards.
The bank has worked to promote the use of alternative energy sources, making the most of Armenia’s topography. Ardshinbank was one of the first banks to start financing the construction of solar power plants in the country and invested $26 million in such projects in 2022 alone. Over the past three years, the bank has invested around $40 million in alternative energy, financing the construction of 14 power plants.
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BOSNIA AND HERZEGOVINA |
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Best Bank: UniCredit Bank |
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In close competition in Bosnia and Herzegovina with Raiffeisen Bank, UniCredit Bank’s return on equity rose to 14.45% in 2022. It posted a 28% increase in net profit, reaching KM112 million ($62.7 million). Total revenues increased by 17%, partly thanks to a 10% growth in net interest income as it grew total net loans by 7.6%, helping it consolidate its market share, alongside 4.2% growth in customer deposits.
Careful cost management was also important. Its costs grew by a mere 5.9% in 2022, despite rising inflation. The cost-to-income ratio came in at only 42.9%.
Cooperation with local and international public-sector institutions is crucial to UniCredit’s financing of small businesses in Bosnia and Herzegovina. These include credit lines for subsidized interest costs with the cantons of Sarajevo, Tuzla and Una-Sana; funding small and medium-sized enterprises in tourism through USAid; and an SME partnership with Germany’s KfW to help SMEs manage the legacy of Covid-19.
UniCredit Bank also became a partner in the Go Digital programme funded by the European Bank for Reconstruction and Development to help finance the digitalization of SMEs.
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BULGARIA |
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Best Bank: UniCredit Bulbank |
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In 2022, UniCredit Bulbank achieved a record net profit of Lev466 million ($261 million), up 48% on 2021, giving the bank a return on equity of 14%. Rising profits are primarily down to double-digit growth in both interest income and fees, while operating expenses increased only by single digits, allowing its cost-to-income ratio to fall to an exemplary 35.5%.
While other banks in Bulgaria and across the region have been more active in M&A, UniCredit has gained market share in Bulgaria organically. In 2022, it had its highest-ever production of new loans, reporting a 28% increase in outstanding loans and a 17% increase in customer deposits. Meanwhile, UniCredit Bulbank’s non-performing exposure ratio fell from 4% to 3.1% in 2022 and its credit loss impairments fell by 18%.
The bank also agreed a €630 million synthetic securitization deal with the European Investment Bank, backed by the European Guarantee Fund, to help finance small and medium-sized enterprises at affordable rates.
For many years, UniCredit has been exceptionally strong as a corporate bank in Bulgaria, as it is across the region. Most businesses in the country have some sort of relationship with the bank, especially medium-sized and large firms. UniCredit Bulbank’s chief executive is Tzvetanka Mintcheva, and her team are now focusing on boosting the bank’s retail business, both from a market-share and quality perspective, with a high number of digital users.
By the end of 2022, the Bulbank Mobile app had recorded more than a million downloads on the Google Play store. It has rolled out a range of new features to its mobile and internet banking services. It also partnered with Israeli financial technology company Sellavi to help businesses create online stores.
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CROATIA |
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Best Bank: Zagrebacka banka |
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Croatia’s biggest bank by assets, Zagrebacka banka, counts 1.4 million retail customers and almost 100,000 corporate and small business clients among its client base. It has a market share of 25% in loans and 27% in deposits.
In 2022, the UniCredit subsidiary recorded a 25% increase in profit after tax to K1.9 billion ($275 million). Operating income increased by 12%, with interest income up by 8% and fees up 14%. Good expense management despite rising inflation saw the firm reach a cost-to-income ratio of just 46%. Meanwhile, customer loans increased by 9% and deposits increased by 13%, thanks to growth among retail and corporate clients.
Alongside adjustments to its payments systems to prepare for the introduction of the euro, the bank has made improvements to its cards offering. It has also made greater use of official guarantees from the European Investment Fund and local small and medium-sized enterprise finance and export credit institutions Hamag-Bicro and HBor, including for projects involving energy efficiency, benefiting local municipalities and small businesses.
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CZECH REPUBLIC |
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Best Bank: Ceska Sporitelna |
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Despite the introduction of a windfall tax on energy firms and banks in 2022, the Czech market continues to be among the most attractive banking sectors in Europe for international players, thanks to its relatively high returns and stability.
This competitive environment makes it harder to gain market share, although Erste-owned Ceska Sporitelna is in the enviable position of already being one of the top two banks in the country. Its acquisition of a Kc47 billion ($2.16 billion) loan portfolio previously held by Sberbank CZ, as part of the liquidation of the Russian bank’s European business, should further strengthen its position at the top of banking in the republic.
Ceska Sporitelna’s financial results in 2022 were exceptionally good. Net profit rose by 42% to Kc20.2 billion in 2022, giving it a return on equity of 15% and a cost-to-income ratio of 43%. Its loan book rose by 7% in the year to the end of March and customer deposits rose by 3.9%.
On the digital front, active Czech users of George, Erste’s regional mobile and internet banking platform, reached two million and the bank also added a chat function to the George mobile app. An increase in the limit of automatically approved loans helped it boost its financing to small businesses without them needing to put up real estate as collateral. Its leasing subsidiary also began financing railway carriages.
In corporate financing, it was a bookrunner on an inaugural sustainability linked bond from Czech power company Cez in early 2022 and was global coordinator on a debut green bond from the national railway firm Czechy drahe.
The bank itself returned to the local bond market for the first time in a decade, with a senior non-preferred issue totalling Kc6 billion.
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ESTONIA |
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Best Bank: Swedbank |
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The long shadow of money laundering in Estonia was still very much in the news for Swedbank at the beginning of the awards period. In March 2022, its Estonian unit was named a suspect in a money laundering investigation by a special white-collar crime investigator with Estonia’s Central Criminal Police. The investigation covers the period from 2014 to 2016.
However, the bank has made great efforts to address this legacy issue. Swedbank launched a long-term anti-money laundering (AML), counter terrorism financing and sanctions transformation programme in 2021. The aim of the programme is to ensure international best practices are in place in the fight against financial crime, putting in place integrated systems, data and infrastructure to create a solid and transparent foundation for this work.
The programme will take several years to finalize, but progress has been made during 2022. In December last year, rating agency Fitch commented that: “Swedbank has addressed historical shortcomings identified at its Estonian subsidiary and continues executing its AML remediation plan, but this is no longer a rating weakness, in Fitch Ratings’ view, as it reflects the bank’s management’s determination to achieve international best practice. We expect that a potential fine from the US authorities, which are investigating the bank’s control deficiencies at its Estonian branch, would be broadly neutral for its franchise.”
Swedbank Estonia reported a net profit of €206.7 million for 2022, compared with €188.6 million for 2021. The increase is mostly down to improved net interest income. A 12% increase in total income to €444.8 million was also driven by higher interest income and net insurance income. Credit impairments were up to €16.4 million in 2022, compared with €11.5 million in 2021, hardly surprising given the pressures of inflation and the regional impact of the war in Ukraine.
“Individuals and organizations have kept up their debt obligations and the rate of overdue payments has remained historically low,” says Olavi Lepp, Swedbank AS chief executive.
Lending volumes grew by 6% year on year thanks to increased mortgage lending, corporate lending and leasing activity. Swedbank has a 38.4% market share of all lending across the country.
Digital banking has been under the spotlight in Estonia this year, with the Financial Supervision Authority having fined Luminor Bank €32,000 last November following a technical error in its online banking system that caused some payments to be registered twice.
At Swedbank, innovations this year have included digital onboarding for minors, enabling parents to open an account for children under 18 years in an automated way, and customized offerings for corporate customers in the mobile app. The bank has also introduced a new in-house built authentication tool for mobile app users.
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GEORGIA |
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Best Bank: Bank of Georgia |
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Best Investment Bank: TBC Capital |
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Banks in Georgia have had to achieve a balance between the challenge of regional political tensions and the benefits of a new wave of Russian clients moving into the country. Bank of Georgia has walked this line particularly well and, led by chief executive Archil Gachechiladze, is Georgia’s best bank this year.
Profit before tax almost doubled in 2022 to GeL1.6 billion ($610 million) and total assets reached GeL28.9 billion.
Bank of Georgia increased its customer base to 1.7 million monthly active users by December 2022, a 17.4% year-on-year increase.
In the review period, it further developed its financial super app in Georgia, which offers banking, brokerage, an insurance marketplace, as well as a digital card and payments service. It has also added a number of tools to reflect the growing number of new Russian users. The bank introduced a feature to enable customers to open an investment account online and to trade globally, a first for the country.
The bank’s monthly active digital users grew 31.5% year on year, reaching 1.1 million and representing 68.7% of the bank’s monthly active customers, compared with 61.1% last year.
Bank of Georgia has also developed new services for its small and medium-sized enterprise client base, launching its Payment Manager Platform at the beginning of 2023, which enables businesses to manage payments independently and integrate various digital payment tools into their online shops.
TBC Capital, under the leadership of chief executive Vakhtang Butskhrikidze, supported the development of the local Georgian debt capital markets in the awards period, completing 40% more deals in 2022 than the year before.
The total value of completed transactions stood at $561 million – 78% of all corporate and financial institution bonds issued in Georgia.
Standout deals include a GeL150 million ($56 million) public bond placement by Tegeta Motors, the largest lari-denominated public bond placement in the Georgian market in the awards period. It also worked on the GeL100 million inaugural public bond by microfinance firm Rico Express and a $300 million Eurobond placement by Silknet.
The bank also helped to develop sustainable finance in the country. It acted as joint lead manager on an $80 million public bond placement by Georgian Renewable Power Operations, the leading renewable energy platform in Georgia. The transaction marked the largest secured green bond from Georgia and priced at a record low coupon of 7% a year – a great achievement in the development of the country’s capital markets.
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HUNGARY |
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Best Bank: OTP Bank |
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As elsewhere in central Europe, windfall taxes and government measures to protect households from the cost of higher interest rates have ultimately prevented banks in Hungary from profiting from the high-inflation environment.
Nevertheless, on an adjusted basis, OTP Bank’s operating profit for 2022 grew by 14% in its core Hungarian business, mainly due to expanding volumes, resulting in higher net interest income.
The business enjoyed a 17% rise in net fees and commissions, mainly due to revenues from fees on deposits, transactions and cards. Overall, its Hungarian adjusted net profit grew by 19%, resulting in a 12.6% return on equity and a 54% cost-to-income ratio.
OTP’s Hungarian performing loan book grew by 16% in the year to end-March, mainly due to its important role in government and central bank-subsidized loan programmes for retail and business customers. By the end of 2022, it had already signed loan agreements worth Ft593 billion ($1.7 billion) under the Széchenyi Card Go! and Max small-business lending schemes.
As well as advances in its digital bank – including an impressive array of features on its mobile app – OTP also bolstered its sustainable finance credentials, putting in place new frameworks for lending in this area, which include a target to build up a Ft1.5 trillion green loan portfolio by 2025.
OTP group issued a €400 million debut senior preferred green bond last July. It also achieved a commanding market share in the Hungarian central bank’s green housing loan scheme.
Internationally, the group completed its takeover of Nova KBM, Slovenia’s second-biggest bank, in February – its biggest-ever acquisition. Its acquisition of the Albanian business of Greece’s Alpha Bank also closed in December, making it the third-largest bank in Albania by customer loans. In December, group chairman and chief executive Sándor Csányi signed an agreement to acquire Uzbekistan’s Ipoteka Bank.
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KAZAKHSTAN |
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Best Bank: Halyk Bank |
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The awards period was a challenging time for Kazakhstan’s banking sector due to heightened geopolitical tensions. Nevertheless, the sector proved resilient, and Halyk Bank, which had KT14 trillion ($31 billion) in total assets at the end of March 2023, stood out as Kazakhstan’s best bank.
It saw a 25% rise in its profit before tax in 2022 and achieved a tighter cost-to-income ratio at 16.5%, down from 20.1% in 2021.
Under the leadership of chief executive Umut Shayakhmetova, the bank spent the year consolidating its position, exiting both the Tajikistan and Russian markets in 2022. In April 2022, it acquired the retail loan portfolio of Sberbank’s Kazakh subsidiary, gaining assets of KT330 billion. This contributed substantially to the bank’s consumer loan business, which increased by 33% in 2022 and makes up 85% of the bank’s funding.
In the awards period, Halyk Bank became the first bank in Kazakhstan to join the UN Global Compact, demonstrating leadership in the country’s sustainable finance space. It continued work on renewing the online application process for its green car loans, which provide a 1% discount for electric vehicle loans compared with standard car loans. The bank’s investment banking arm also worked on a number of green transactions during the awards period, including as lead manager and bookrunner for Samruk-Energy’s KT18.4 billion green bond in November 2022.
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KOSOVO |
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Best Bank: Raiffeisen Bank Kosovo |
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Raiffeisen Bank Kosovo saw an 11.5% increase in profit in 2022 to €29.4 million, equating to a return on equity of 22.1%. Customer loans increased by 10.9% to €863 million and customer deposits increased by 10.4% to €1.1 billion.
While Raiffeisen operates Kosovo’s largest branch network, it has also continued to upgrade its digital offering, notably through the Raiffeisen Plus internet and mobile platform. It has rolled out RaiKesh, a digital personal loan platform, and the RaiPay digital wallet. In August 2022, it introduced the RaiPoS app, allowing small and medium-sized enterprises to accept contactless payments using smartphones.
Raiffeisen continues work to upgrade its digital banking offering in the corporate segment, where it has a leading share in products such as trade finance, factoring and working capital financing.
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KYRGYZSTAN |
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Best Bank: DemirBank |
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Kyrgyzstan’s best bank this year is DemirBank. Founded in 1997 as the first international bank in the country, it has benefitted from international links and made a profit before tax of Som2.5 billion ($28 million) in 2022, driven by increases in interest income as well as fee and commission income.
The bank’s corporate and small and medium-sized enterprise customer base increased by 11% in 2022, while its retail base increased by 16% to 479,000 customers. Led by general manager Sevki Sarilar, the bank grew its volume of money transfers in the domestic currency by 420% and in foreign currencies by 240%. The bank’s total deposit base grew by 62%, to more than $485 million at year-end 2022.
It also launched a number of new products and services in the review period, becoming the first bank in Kazakhstan to enable customers to withdraw and deposit funds in accounts without a card, using a QR code. It also offered payment by QR code. Other developments launched in the period include a tool enabling customers to activate Visa and Mastercards by themselves. The bank has also worked on the development of more tools for its retail banking app and its corporate internet banking provision that are expected to go live in 2023.
In 2022, DemirBank put to work $3.25 million as a part of the European Bank for Reconstruction and Development’s sustainable energy financing incentive-based programme KyrSeff. The bank also worked with the EBRD on its trade facilitation programme and with the Asian Development Bank to support customers’ export-import operations.
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LATVIA |
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Best Bank: SEB Banka |
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The Baltic countries suffered a profound change in economic sentiment and growth prospects following Russia’s invasion of Ukraine in February 2022. In Latvia, the war upended energy markets and triggered a surge in inflation to 17.3% by the end of the year. Despite this, the country’s GDP still grew by 2% last year, while exports, manufacturing and retail activity all remained strong.
However, conditions are expected to deteriorate in 2023 and, according to SEB’s Baltic Business Outlook in April 2023, the mood among the country’s small and medium-sized enterprises is becoming more pessimistic – 25% of Latvian small businesses are expecting demand to fall this year.
Latvia’s banks have held up well, however, with total assets in the sector growing to €26 billion last year, an increase of 6.9%. The country’s best bank, SEB Banka, had a good year across all businesses, with an 11% increase in deposits and 12% growth in lending increasing the total loan portfolio by 6.5%. Mortgage lending remained stable, while lending to the SME segment was up by 35% to €256 million. There has also been an increase in leasing and short- and long-term financing.
SEB Group’s total revenue in Latvia for 2022 was €148.8 million, with operating profit after tax and provisions of €80.4 million, up 29% year on year. The group’s capital adequacy ratio is 20.18%, well above regulatory capital requirements. At the end of 2022, SEB Group Latvia had assets worth €5.5 billion, up 20% from 2021.
“The past year has been one of uncertainty and has presented SEB Banka and society as a whole with ever-new challenges,” noted Ieva Tetere, chair of the board at the end of last year.
She points to investments in technological development and job creation as the bank’s priorities in Latvia. SEB plans to hire more than 170 technology and business development specialists across the Baltics and in the group service centres in Riga and Vilnius to develop its digital solutions.
The group has enhanced its Roboinvestor investment product in the Baltic States and has also improved its mobile app to allow customers to unblock and close their cards. New consumer loan calculators have also been added.
Sustainability remains a key focus for SEB Banka and it has added a new feature called Carbon Metre to the MyFootprint app. This allows users to connect their SEB account to the app and get an overview of the carbon footprint of purchases.
In 2022, the group was awarded the highest Diamond rating in the Sustainability Index. It expanded its green home loan product range and organized a sustainability forum for SMEs in Latvia to share practical experiences of implementing sustainability principles. It also launched a series of 12 TV programmes, ‘Footprints. What you leave behind’, where SEB experts explore the benefits of living sustainably, consuming less and making smarter choices for households and the next generation.
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LITHUANIA |
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Best Bank: SEB Bankas |
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Lithuania’s largest banks – including this year’s winner SEB Bankas – all recorded exceptional results in 2022: Swedbank reported net profits up 64%, Luminor up 67% and SEB Bankas 49%. This reflects the dominance of floating-rate lending in the country and the consequent speed with which rate hikes have been transmitted through the system.
In November last year, Lithuania had the highest mortgage rates in the eurozone, at 4.1% compared with the sector average of 2.8%.
It is no surprise, therefore, that in March this year Lithuania’s finance minister, Gintare Skaiste, proposed a temporary windfall tax on bank profits in the country.
“If the situation remains unchanged, it is likely that banks’ profits in 2023 may reach €1 billion, compared to around €300 million in normal times,” she said. “If there is no change, we will assess the possibility of resolving these imbalances in banks’ earnings by fiscal measures.”
The government is proposing the imposition of a 60% tax on the part of a bank’s interest income that is more than 50% higher than a four-year average for two years.
At SEB Bankas net profit reached €172.3 million in 2022. The loan and leasing portfolio grew from €6.3 billion to €6.7 billion and deposits grew from €9.8 billion to €11.3 billion, driven by prudent corporate liquidity management.
The bank may not have achieved the greatest increase in net profit among its competitors, but it demonstrated a commitment to the community and sustainability, while also maintaining a focus on customer priorities.
Russia’s invasion of Ukraine has accelerated investment in renewable energy in Lithuania in order to reduce its dependence on Russian energy supplies. To reflect this, SEB Bankas started offering green guarantees for businesses last year. In 2022, green home loans accounted for about 16% of all new home loans granted by the bank and by the fourth quarter, a third of new housing loans were for the purchase of energy-efficient housing. It also launched a special mobile branch in an electric van that travels to smaller cities and towns in the country to improve access to financial services for residents.
The bank also signed a memorandum with the Bank of Lithuania to increase the availability of cash and has installed ATMs in new towns across the country. Currently, there are over 1,000 ATMs operating in Lithuania and 91% of the population lives within 10 kilometres of an ATM.
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MOLDOVA |
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Best Bank: Maib |
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With the largest market share of business and retail banking, maib is Moldova’s biggest bank. Its recent financial performance and its efforts to strengthen its business model earn it the title of Moldova’s best bank.
Maib’s net profit in 2022 rose by 57% year on year to MLei1.13 billion ($62.9 million), translating into a return on equity of 19%. Its non-performing loan ratio dropped from 3.9% to 2.5% and its total loan book grew by 15% during 2022. It has also strengthened its digital offering with the introduction of Apple Pay and Google Pay.
Other developments at maib have included the launch of a premium banking service and new card products aimed at children, teenagers and freelance workers. It is also distributing digital-only cards via its maibank app.
It has also launched CasaHub, a digital platform allowing customers to buy and sell their homes and to advertise real estate services. In a similar vein, it has launched AgricolaHub, a digital platform aimed at farmers and other participants in the agricultural sector.
In May 2022, maib secured €50 million of additional debt funding from the European Bank for Reconstruction and Development to support small and medium-sized enterprises. Maib is a partner of the UN Refugee Agency and has issued and distributed bank cards to Ukrainian refugees as part of that partnership.
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MONTENEGRO |
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Best Bank: NLB Banka |
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Following the completion of its merger with Komercijalna banka Podgorica, NLB Banka ended 2022 with a market share in loans of 23% for retail and 12% for corporate clients. Its market share in deposits is 17% for retail and 10% for corporate.
The merger, alongside organic growth in loans and deposits, helped the bank to increase its net profit by €4.6 million in 2022 to €15.5 million. Return on equity rose to 15.4%.
Excluding the effect of the Komercijalna banka merger, fees and commissions rose by 30%, while net interest income rose by 16%. Pre-provision profit growth reached 28% excluding the effect of the merger. Its non-performing loan ratio fell to 6.4%, down 4.3 percentage points compared with 2021.
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POLAND |
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Best Bank: Santander Bank Polska |
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Best Investment Bank: Trigon |
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Polish banks, like others in central and eastern Europe, have seen a big boost to their net interest margins from higher interest rates. But government measures designed to protect consumers from the effect of those increases, including blanket mortgage holidays, have become a heavy counterweight to Polish banks’ profitability.
These government measures have added to the drag on Polish banks’ profits from revaluations of their bond portfolios. In addition, Polish banks have had to make increased legal provisions concerning their legacy foreign currency mortgage portfolios. Meanwhile, because of government policies, state-owned players are becoming increasingly dominant in banking and other sectors of the economy.
Despite this often-challenging operating environment, Santander Bank Polska, which is the biggest of the remaining privately owned banks in Poland, is doing relatively well.
For 2022, Santander Polska reported revenues of Zl12.4 billion ($3.03 billion), up by 35% on 2021. Much higher net interest income reflected a growing loan book, despite falling mortgage demand. That came on top of resilient fee income, while impairments for credit losses were 20% lower than in 2021. It all points to a robust underlying business model.
As elsewhere in the group, small and medium-sized enterprises and the auto sector have been areas of focus for Santander in Poland, which is led by chief executive Michal Gajewski. Initiatives included new fixed-rate loan arrangements for SMEs and the launch of a soft point-of-sale solution, allowing SME customers to use smartphones and tablets as a PoS terminal. Other SME banking initiatives include launching in-house services for online accounting and debt collection.
In the auto sector, Santander built a new car sales platform, allowing customers to browse vehicles from Santander Leasing’s Polish car dealer partners. It also launched a new tool in its mobile and internet bank for customers allowing them to compare and buy motor insurance.
In corporate and investment banking, Santander worked on some of the most important debt and equity deals in Poland during the awards period, including advising on some big renewable energy projects.
Deals by state-owned entities loomed large over Poland’s investment banking landscape over the past year, but there was some important activity by private-sector players.
For example, the awards period saw a Zl2.7 billion sustainability linked debt raising by satellite TV company Cyfrowy Polsat, attracting multilateral institution support and demonstrating the size at which a private company could issue in local currency in Poland. Trigon, Poland’s best investment bank, was coordinator and sole offering agent on this deal for its long-standing client.
As elsewhere, the IPO market in Poland dried up in 2022, although a Zl250 million equity offering by Ryvu Therapeutics in December went some way to reopening business. Trigon was global coordinator on the Ryvu deal and on other equity capital market transactions, including accelerated bookbuilds for Selvita and Autopartner and a capital raising via a private placement by HiproMine.
In M&A, Trigon was sole financial adviser to Value4Capital on its exit from Kom-Eko, selling to CEE Equity Partners. It also advised Krynicki Recycling on its delisting and sale to Sibelco; Getindata on its sale to Xebia; and Netbox on its acquisition of PremiumDruk.
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ROMANIA |
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Best Bank: Banca Transilvania |
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State-owned banks and banks owned by Western European groups dominate much of the financial sector in central and eastern Europe. However, Banca Transilvania, Romania’s best bank, was the issuer that reopened the international bond markets for central and eastern European financial institutions after the banking crisis in March this year.
Banca Transilvania’s €500 million four-year senior non-preferred issue this April was its first outing in the international bond market. Its recent growth and financial results, coming on the back of its emergence as Romania’s biggest bank in the last decade, suggests it will become a more familiar name among international investors in years to come, particularly if Romania’s good economic performance continues.
The group’s net profit reached L2.5 billion ($548 million) in 2022, an increase of 23% on 2021, translating into a return on equity of 25% and a cost-to-income ratio of 47.5%. It saw an even bigger step-up in profitability in the first quarter of 2023, when it registered a net profit of L838 million.
While the bank is seeing strong organic growth in terms of customer numbers, loans and deposits, longstanding chief executive Omer Tetik and his team are also taking advantage of consolidation opportunities in Romania and, tentatively, abroad.
Alongside the acquisition of the Romanian part of Idea Bank from Poland’s Getin Holding, Banca Transilvania integrated Tiriac Leasing into the group in 2022, boosting its local weight in the auto finance market. Then in late March 2023, its Moldovan bank announced the purchase of the smaller Moldovan subsidiary of BCR, its main rival in Romania, owned by Austria’s Erste Group.
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SERBIA |
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Best Bank: Banca Intesa Beograd |
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Banca Intesa Beograd has had a standout year in Serbia, achieving record results and growth across business segments, while enforcing strict cost discipline and proactive credit portfolio management. Net profit topped €108 million for 2022 and assets grew to €7.3 billion – giving it a 15% market share. Efficient monitoring has seen the bank achieve the lowest non-performing loan ratio in the sector, at 2.87%, almost 20% below the average.
The bank, under the stewardship of chief executive Darko Popovic, increased its loan portfolio by 10.8% in 2022, to reach 17.4% of the market. It has 18% of deposits in the country and 25% of payment card transaction volumes.
The digital banking platform that was introduced in 2021 is bearing fruit, with an expansion of the number of products and services on offer and an improvement in functionality. Banca Intesa recorded over 510,000 digital platform users by the end of the year, with 21 million transactions by individuals on digital channels.
Of note this year was the introduction of functionality on the ConsentIT mobile app in cooperation with the Serbian state office for IT and e-government that will enable customers to generate a qualified electronic signature in the cloud. Banca Intesa Beograd’s contribution to the development of digitalization in the country was recognized by the eCommerce Association of Serbia, which granted it the best mobile banking app award for the year.
On the environmental, social and governance (ESG) front, the bank offers specialized products and services to promote renewable energy and energy efficiency. These include green mortgage loans and energy efficiency lending in cooperation with the European Bank for Reconstruction and Development, as well as ESG farming loans. In 2022, it disbursed roughly €30 million in circular economy lending and is currently focusing on the integration of ESG rules into its credit processes.
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SLOVAKIA |
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Best Bank: Slovenska Sporitelna |
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The central bank of Slovakia notes that while demand for mortgages and corporate loans has been falling and rising costs and interest rates are hitting borrowers, particularly in the commercial real estate sector, the country’s banks remain resilient.
That is thanks in part to their strong capitalization and healthy profitability, boosted by rising interest rates as the European Central Bank strives to contain inflation. The country’s three leading banks are all foreign owned.
Part of the Erste Group, Slovenska Sporitelna, the country’s largest bank, serving two million customers and with leading positions in total assets, household loans, client deposits, numbers of branches and ATMs, wins the award for Slovakia’s best bank.
Its financials are strong. It earned more in absolute profit and delivered a higher return on assets in 2022 than its two largest local rivals. It also maintained a low cost-to-income ratio and a low non-performing loan ratio at just 1.6% – despite the energy crisis, rising rates and inflation – and with a 121% coverage ratio.
It also boasted a higher tier-1 capital ratio for 2022, at 18.7%, than VUB (owned by Intesa Sanpaolo) at 16.7% and Tatra (owned by Raiffeisen Bank International) at 16.6%.
Slovenska Sporitelna has given up a little of its leading market share in retail loans but boosted its share in commercial loans to catch up with its two rivals, passing 20% at the end of 2022. It also became the bank with the highest number of digital clients, as well as the bank with the most mobile app users.
Its customers benefit from access to George, Erste’s digital offering, through which they can now access mutual funds, exchange-traded funds and individual stocks and construct a personal investment plan.
Erste Group’s signing of the net-zero banking alliance required the bank to come up with a plan for its loan portfolio to become climate neutral. As the first step, decarbonization paths for the four most polluting sectors were prepared in 2022. Plans for a further seven sectors are due to be finalized in 2023.
On the financing side, Slovenska Sporitelna was the first bank in Slovakia and in the Erste Group to issue a green covered bond.
Following Russia’s invasion of Ukraine, the bank quickly responded to the arrival of refugees with an aid package including free banking services, an ATM at the border and a banking app in the Ukrainian language.
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SLOVENIA |
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Best Bank: Nova Kreditna Banka Maribor |
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Nova Kreditna Banka Maribor (Nova KBM), the second-largest bank in the country, is Slovenia’s best bank. It was able to grow loans and deposits at a healthy pace in 2022, with higher net interest income that enabled it to boost profits, despite raising provisions for credit exposure as the country’s business and household borrowers felt the impact of the war in Ukraine and the consequent energy crisis.
Banka Slovenije, the country’s central bank, points out that in comparison with most other European countries, the Slovenian banking system is one of the most profitable in terms of return on equity. Nova KBM Group delivered an 11.73% return on average equity in 2022, above the sector average of 10%, while running a high common equity tier-1 capital ratio of 15.8%.
It reported a pre-tax profit of €114 million in 2022, up from €108 million in 2021, a year when reserve releases flattered its results.
This is a small bank that has been growing through acquisition, since buying Abanka, then the third-largest bank in Slovenia, in 2019.
It prides itself on being the most accessible bank in the country with 61 branches of its own, as well as an agreement to provide banking services through another 456 outlets in the country’s post office network. It offers well regarded digital and mobile applications and the use of its digital services grew 10% in 2022.
When Hungary’s OTP Group, which had acquired SKB Banka in Slovenia in 2019, completed the purchase of Nova KBM in February 2023, Sándor Csányi, chairman and chief executive of OTP Bank described it as the group’s most important acquisition to date.
OTP is acquiring a bank not only with a high share of retail customers but one that has maintained its share of the Slovenian project-financing market.
Project finance remains an important element of the corporate banking sector, both in terms of volume of lending and profitability. Nova KBM has continued to improve its range of specialized services to investors and project-finance partners in residential housing, commercial real estate, infrastructure, tourism and trade. In 2022, it financed projects with a total value of more than €420 million.
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TURKEY |
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Best Bank: Akbank |
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Best Investment Bank: Citi |
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Akbank is Turkey’s best bank and continues to produce extraordinary results in a country of high inflation and interest rates. For 2022, it reported the highest return on assets at 6.2% among the country’s leading banks, the highest tier-1 capital ratio at 17.7% and the lowest leverage ratio at 7.5.
Net income rose to TL60 billion ($2.3 billion), a five-fold increase from TL12 billion in 2021.
The bank also set a record for customer acquisition, bringing in 2.3 million new customers in 2022, most of these onboarded digitally. And this continued in the first quarter of 2023, even as the country endured the terrible earthquake that claimed 50,000 lives, left a million people homeless and slowed the economy.
Akbank acquired another 730,000 customers in the first three months of 2023. While the bank’s long-term strategy has been to grow in retail banking, it has been making good headway in serving the country’s small and medium-sized enterprises, adding 200 basis points to its market share in loans during 2022 and another 20bp in the first quarter of 2023.
Akbank is a strong digital bank. Its mobile banking app now allows merchants to use smartphones and tablets as point-of-sale devices for accepting customer payments. It has launched Juzdan, a digital wallet app, on which all credit and debit card holders, even if they are not Akbank customers, can store cards and pay merchants.
This digital focus extends to loan underwriting where the bank believes that its advanced analytics and artificial intelligence-based loan decision systems will keep the probability of default in the retail loan portfolio low even while it grows quickly.
Chief executive Hakan Binbasgil points out that Akbank has been careful to protect its balance sheet, avoiding the potential risk in duration mismatches by keeping a high proportion of funding in Turkish Lira time deposits and limiting long-duration fixed-rate bonds to just 2% of total assets.
Citi is Turkey’s best investment bank.
In March 2023, Koç Holding and Stellantis announced that under a new strategic agreement, their joint venture in Turkey, Tofaş, would acquire 100% of the shares of Stellantis Otomotiv Pazarlama, the Stellantis distribution company in Turkey. As a result, all Stellantis brands available for distribution in Turkey – Alfa Romeo, Fiat, Citroën, DS Automobiles, Jeep, Maserati, Opel and Peugeot – will be distributed by Tofaş. Citi was exclusive adviser to Koç Holding on the €400 million transaction.
During the awards period it also led multi-billion dollar sukuk and conventional bond deals for the Republic of Turkey.
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UKRAINE |
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Best Bank: Raiffeisen Bank |
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Ukraine’s banks have demonstrated remarkable resilience since the invasion. Banking operations have resumed in areas recovered from Russian occupation, data management has shifted to the cloud and liquidity is strong. Banks saw a 9.6% rise in hryvna retail deposits in the first quarter of 2023, according to the central bank.
Non-performing loans are the main weakness, however. While they fell from 55% to 27% of the sector book between 2018 and early 2022, they have since increased to 38%. New lending remains understandably very subdued across the sector.
Raiffeisen Bank is the biggest foreign bank in Ukraine and it consequently plays a leading role in the foreign-currency market. In 2022, it increased cash imports of foreign currency into the country by four times, helping to meet supply and demand imbalances.
Its loan book in the war-torn country actually increased in 2022, with the bank deploying its own funds and playing a key role in public-sector subsidized lending programmes.
It has an especially strong focus on Ukraine’s vital agriculture sector, to which it has lent Hrn9 billion ($243 million) since the start of the war. The bank also reports an increase in its share of customer deposits, jumping to third place behind the two state-owned lenders.
Raiffeisen Bank’s 14% NPL ratio is a core strength, even if its 2022 profits suffered from corporate social responsibility-led actions to remove fees and grant credit holidays. It increased provisions to cover potential credit and operational losses by Hrn9.5 billion in 2022.
Greater commitment to Ukraine is now a moral imperative for Raiffeisen Bank International (RBI). Its ownership of a large bank in Ukraine offers a vital counterweight to the reputational and financial damage RBI has suffered from its bank in Russia.
Clearly, RBI needs to do whatever it can to speed up its exit from that country, yet the National Bank of Ukraine noted recently how Raiffeisen Bank has contributed to Ukraine’s financial stability during the war. It has played a tangible and important role in the development of the Ukrainian banking sector and economy, and in humanitarian projects.
A new €100 million guarantee from the World Bank’s Multilateral Investment Guarantee Agency covering RBI’s equity investment in Ukraine will help RBI protect against the undeniable risks of this investment. It could also be a lucrative opportunity, however, given the huge financing needs of Ukraine’s reconstruction.
“Especially in the first few months of the war, it was a formidable challenge to keep the branches open and to ensure uninterrupted transaction processing,” says chief executive Oleksandr Pysaruk, a former central banker and IMF official. “Payments, transactions, lending and foreign currency were never interrupted at any point in the war. That’s nothing short of remarkable. The security and infrastructure risk due to the bombing and missiles was very high.”
He adds: “We didn’t just keep the lights on. We granted more than Hrn100 billion in new loans since the war started. That’s more than any other bank except the two large state-owned banks.”
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UZBEKISTAN |
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Best Bank: Hamkorbank |
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Uzbekistan’s banking sector has faced challenges as the country struggles to recover from Covid-19 and deal with the impact of the war in Ukraine. In this environment, Hamkorbank stood out as the country’s best bank.
When Russia invaded Ukraine, Hamkorbank undertook comprehensive stress tests and found that about 20% of the bank’s clients had businesses that were linked to one or more of Russia, Ukraine and Belarus. Despite these risks, the bank has seen strong financial results, driven in part by the influx of Russian emigrants into Uzbekistan. This drove a substantial increase in deposits by both corporate and individual clients.
The bank, which had Som16.9 trillion ($1.5 billion) in total assets at the end of 2022, saw a profit before tax of Som934 billion in 2022, up 50% year on year. Its return on assets grew from 3.9% at the end of 2021 to 5.16% at the end of 2022.
Hamkorbank partnered with the International Finance Corporation to launch a number of large-scale projects across the business. These include assessing the bank’s digital maturity, developing the bank’s corporate governance and preparing the bank for an IPO.
In the digital space, the bank implemented an auto payment system for loans to individuals, while in small and medium-sized enterprise and corporate banking it launched a new mobile payment service for businesses.
