Best bank: Privredna banka Zagreb
Croatia’s entry into the euro in January 2023 was a landmark event for the country’s banking sector, which is dominated by banks from elsewhere in the European Union.
This year Privredna banka Zagreb (PBZ), part of Italy’s biggest bank Intesa Sanpaolo, recorded a particularly strong increase in net income, rising by 143% to €472 million. While total revenues increased by 63% to €1.1 billion, the cost-to-income ratio was also exceptionally healthy, falling to just 36%. Return on average equity increased to 16%.
Loans and advances to customers increased by 6.9% despite the high interest-rate environment and partly supported by a new offer for government-subsidised housing loans. Customer deposits rose by 2.6% and its market shares of loans and deposits remained stable at around 20%. The non-performing loan ratio, meanwhile, fell to 3.42%.
Among the most important events at the bank in 2023 was the launch of a new strategic partnership between PBZ Card and the Croatian subsidiary of Italian payments company Nexi that targets growth in the country’s merchant-acquiring market. PBZ continues to manage sales and client relationships as part of the partnership, while Nexi deploys its scale and expertise in payments to develop products and functionalities (including point-of-sale devices) and provide operational support.
Among the firm’s corporate social responsibility activities this year, initiatives for children’s health and wellbeing figure particularly prominently. Its Visa Card with a Heart project has resulted in 80 donations in this area, including paediatric departments and children’s hospitals.
Best investment bank: Zagrebacka Banka
Investment bankers have high hopes for Croatia as an investment-banking market. The pipeline includes a heavily anticipated potential IPO by Rimac, a local electric car manufacturer backed by Goldman Sachs Asset Management and SoftBank.
This year’s award for the best investment bank in the country goes to Croatia’s biggest bank, Zagrebacka banka, part of Italy-based group UniCredit.
In the local market, Zagrebacka banka subsidiary Zaba Capital Markets was joint lead manager on a €305 million domestic sustainability-linked bond, due 2026 and issued by Zagrebacki holding, a multi-utility company fully owned by the City of Zagreb. The deal was the country’s largest ever domestic bond issuance except for the sovereign. It is also the first municipal or municipal-related environmental, social and governance bond in central and eastern Europe, according to UniCredit.
The bank also worked on a €1.85 billion domestic bond issuance that broke ground in terms of its overwhelming orientation towards retail investors (72% of allocation). Zagrebacka banka also played a key role in the country’s first international bond after its accession to the eurozone, in a €1.5 billion issuance in June with no new-issue premium that was almost four-times covered.
Alongside various M&A advisory mandates, the bank’s syndicated loans and project financings included a €1 billion financing for infrastructure company Bina-Istra. Zagrebacka banka was bookrunner, mandated lead arranger, as well as account and hedging bank. It also acted as bookrunner, mandated lead arranger, coordinator and agent in a €2.17 billion club loan facility for Hrvatske autoceste.
Best digital bank: Raiffeisen Bank Austria
Raiffeisen Bank Austria has made significant progress in digital transformation. Following significant investment in its platforms, digital sales have become a key driver of gross income. In 2023, 34% of the bank’s main products were sold digitally.
Raiffeisen’s mobile app also saw significant growth. It registered 249,300 unique users and 4,871 monthly downloads. There is high digital adoption among premium clients, with over 50% using the RaiConnect platform.
To streamline payments, the bank introduced the RaiPOS application for mobile phones. Digital services saw accelerated development due to the integration of public cloud services (AWS, Azure) into the bank’s IT infrastructure.
Best bank for SMEs: OTP Bank
OTP Bank had a good year across its small and medium-sized enterprise banking operations.
It saw a significant expansion in its SME client base, adding 5,083 new clients, a 7.5% increase year on year. Performing loans and deposits grew by over 28% and 18.3% respectively.
There was an increased uptake of the bank’s products and services and a 9.3% annual increase in the number of SME internet banking users. There was also a significant 20.7% increase in mobile banking users in the segment.
The bank’s merchant acquiring business for SMEs grew by 11%, alongside an 18% increase in point-of-sale and eCommerce operations. The number of transactions conducted by SMEs on the bank’s platforms also saw a substantial 22% increase, supported by strong performance in merchant services and support.
Best bank for ESG: Zagrebacka banka
Zagrebacka Banka has focused on sustainable finance, introduced impactful support programmes and demonstrated commitment to gender representation and employee wellbeing.
The bank acted as joint lead manager for a sustainability-linked bond issued by a multi-utility company owned by the City of Zagreb. The deal, valued at €305 million, was the largest non-sovereign bond in the Croatian debt capital markets and was the first environmental, social and governance bond in central and eastern Europe issued by a municipal entity.
The bank also implemented five new support programmes in partnership with development institutions and supranational organizations, namely the Croatian Agency for SMEs, Innovations and Investments, the Croatian Bank for Reconstruction and Development, the European Investment Fund and the European Investment Bank. These included three guarantee programmes and two loan interest subsidy programmes, all based on sustainability criteria.
Internally, Zagrebacka Banka demonstrated impressive gender representation data, with women making up 73.2% of its workforce and holding 60% of managerial positions.
To improve employee wellbeing, the bank implemented its Programme for Mums and Dads initiative, which supports employees through various stages of parenthood, including pregnancy, early parenting and fertility challenges. It also formalized remote working for head office employees, allowing them to work from home two days a week.
Best bank for corporate responsibility: OTP Bank
OTP Bank has demonstrated commitment to social responsibility, significantly increasing its philanthropic efforts and actively engaging employees in various volunteer initiatives.
In 2023, it significantly ramped up its philanthropic activity, increasing donations from €960,000 in 2022 to over €1,370,000 in 2023. This funding benefited three hospitals and nearly 200 associations, initiatives and projects. The bank’s contributions spanned various areas, including social welfare, environmental preservation, healthcare and education.
The bank’s employees also played an active role in its corporate social responsibility efforts. Approximately 220 participated in 15 volunteer campaigns, dedicating a total of 1,084 hours to various causes. These initiatives ranged from the Wings for Life race, which raised funds for spinal cord research, to the Boranka reforestation campaign. Employees also volunteered at animal shelters, contributed to the SOS Children’s Villages initiative and engaged in environmental preservation through natural area clean-ups.
Furthermore, OTP Bank partnered with the Red Cross to organize blood donation drives. In 2023, nine such campaigns were conducted, with 380 workers donating 286 doses of blood.
Best bank for corporates: Zagrebacka banka
Zagrebacka Banka’s corporate banking division had a year of growth and innovation, marked by portfolio expansion, process simplification and the introduction of new services.
Profit after tax reached €194 million in 2023, up 150% on the previous year. Net loans and advances rose by 6% to €5,914 million and customer deposits were up by 10% to €5,606 million.
The lending product development and EU funds department launched five new support programmes for local businesses, including three guarantee programmes and two loan interest subsidy programmes.
The bank has introduced a fast-track process for transaction approvals, a system that reduced response times by over 60% for nearly one-third of transactions and simplified contractual forms for all corporate products.
Simplifications in know-your-customer processes were also implemented along with the introduction of commodity derivatives and interest rate options for large corporates. Corporate card payments can now be made via e-wallets – a market first in Croatia.
