Best bank: Ceskoslovenska obchodni banka
The Czech Republic has long been considered one of the most attractive banking markets in central and eastern Europe in terms of the risk-return dynamic. All the top five banks are foreign-owned, and the sector has been relatively consistent in terms of its earnings. The higher interest-rate environment, so far, has reinforced the sector’s good profitability, despite a new tax on bank profits, not least because asset quality has remained healthy.
Owned by Brussels-based group KBC, Ceskoslovenska obchodni banka (CSOB) is the Czech Republic’s biggest bank by assets. It had a particularly good financial performance in 2023. Net profit increased by 6% to Kc15.4 billion ($670 million) despite banking taxes of Kc1.4 billion and thanks partly to an 11% growth in net fee and commission income. Return on equity rose to 14.4%.
Despite its already large size in the country, the total loan portfolio increased by 5% year on year, while deposits increased by 9%. On the other hand, its non-performing loan ratio fell to 1.4%. The common equity tier-1 ratio ended 2023 at 19.7%.
Importantly, CSOB’s assets under management grew by 19%, thanks primarily to mutual-fund inflows. Chief executive Ales Blazek points out that while the tough macroeconomic environment is taking a toll on purchasing power, the bank’s clients have reacted partly by investing savings more actively and bolstering their pension assets in part via a new pension product launched by CSOB.
Like other banks in the KBC network, CSOB has rolled out its artificial intelligence-powered digital assistant (called Kate). In the Czech Republic it has also piloted electronic signature mortgages, allowing a fully digital mortgage process, and QR-code logins, among other innovations.
Best digital bank: Ceskoslovenska obchodni banka
In 2023, Ceskoslovenska obchodni banka (CSOB) enhanced its existing digital products and introduced several new ones.
The bank’s virtual assistant, Kate, grew in popularity, with more than half of CSOB mobile banking users actively engaged at the end of 2023. Kate provides solutions autonomously in 66% of all queries, and more than 1.2 million retail and corporate users have contacted Kate since its launch.
The bank has also launched the pilot phase of digitally signed mortgage and pledge agreements, a new feature to the Czech mortgage market, which makes the application process fully digital for qualifying customers.
With its in-house broker, Patria, it also launched a tax-efficient long-term investment product as an alternative to traditional pension products.
The bank has been among the first adopters of new digital solutions, including payment by contact, which allows payments to be sent by entering the recipient’s phone number. CSOB launched the option for customers to access its Bank iD system via QR code in October 2023, and it has been used over 750,000 times by clients.
Best bank for SMEs: UniCredit Bank
UniCredit Bank increased its lending to the small and medium-sized enterprise sector in the Czech Republic last year.
In collaboration with the European Investment Fund (EIF), UniCredit supported about 2,500 SME businesses across seven EU countries, including the Czech Republic and Slovakia. Under the agreement, the EIF provided two guarantees of around €370 million to UniCredit to finance approximately €1 billion of investment in SME businesses.
As part of the bank’s green lending strategy, UniCredit also extended loans to housing associations and individuals to promote energy-efficiency investments in residential buildings and to invest in the development of sustainable mobility.
The bank also improved its offering specifically for the micro business segment. By offering attractive interest rates and a simplified application process for loans, the bank managed to grow lending in this segment by 30% year on year.
Best bank for ESG: Ceskoslovenska obchodni banka
Ceskoslovenska obchodni banka (CSOB) saw good growth in its sustainable loan portfolio in 2023. The bank provided Kc29.6 billion ($1.27 billion) in loans supporting the transition to a low-carbon economy in the real estate and renewable energy sectors in 2023. Kc2.1 billion of these were in full compliance with the EU Taxonomy. The bank lent Kc24.3 billion for buildings certified as energy efficient in the highest categories A and B under country’s certification scheme and doubled its financing of clean energy vehicles to Kc1.6 billion.
The bank has several new and existing social initiatives, including its grant programme, CSOB Helps Regions, which in 2023 supported 150 projects with total grants of Kc10.8 million. Through its corporate volunteering programme, 1,990 volunteers worked 14,060 hours for 81 non-profit organizations in 2023.
The bank launched NaDobrouVěc for its retail customers last year, allowing donations to a charitable project by a specific non-profit organization with each card payment. In 2023, 2,500 clients used this service and total contributions that exceeded Kc3.5 million.
Best bank for corporate responsibility: Ceska sporitelna
Ceska sporitelna advanced financial education, housing affordability and energy efficiency last year through several important initiatives.
The bank’s ABC of Money initiative, the largest financial education programme in the Czech Republic, reached 70,000 children across 750 schools and enhanced the digital skills of 1,200 older people. The programme was expanded to include a Ukrainian-language version and offer support for Ukrainian children affected by war.
To address housing affordability, the bank, through its subsidiary Affordable Housing, initiated the construction of over 650 affordable rental apartments. This project, targeting employees in key social professions, represented a significant step in the bank’s strategy to support essential workers.
The lender also introduced the Loan for the Future and Mortgage for the Future services to promote energy efficiency in residential buildings, offering incentives such as waived fees and rate discounts for energy-efficient homes. The bank introduced an energy calculator to allow customers to assess homes’ energy demand as part of its mortgage application process.
Best bank for corporates: Raiffeisen Bank
Raiffeisen Bank saw growth in corporate revenue and penetration for corporate digital services last year.
It introduced new digital client-facing products, including enhancing its mobile app and simplifying corporate online account opening. The digitization of letters of credit applications saw its active user base increase from 50% to 70% by the end of 2023.
Digital enhancements mean that to 90% of drawdowns of credit and 95% of all bank guarantee requests are issued via digital banking.
Total revenues in the corporate segment increased by more than 10% during the year, with the volume of corporate loans up by more than 5% and client deposits up by 2% compared to 2022.
