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The tough route to quality

Weak and unreliable may be their image ­ but the best emerging-market banks are among the most robust in the world. Faced with hyperinflation, political instability and crippling credit crunches, they need to be tough to survive. Along the way they have turned into centres of excellence. Euromoney picked banks from widely differing regions to illustrate this winning streak. They are Brazil's Itau, Poland's Handlowy, Taiwan's Shanghai & Commercial Savings Bank, the UAE's Mashreq, South Africa's Investec and Ghana's Social Security Bank.

Surviving the Asian typhoon

Poland picks a popular private path

Investec's 60-fold leap in value

Mashreq's Gulf War remedy

Ghana's fleet-footed operator


When South American inflation was raging the best bank was the one that pulled in the most deposits and invested them in high-yielding government paper. Efficient processing was the key to getting the money working quickly and to boosting float revenues. In Brazil, the private-sector bank that did this most effectively was Banco Bradesco. With 2,543 branches compared with Itau's 1,873 and Unibanco's 1,195 (the second and third largest players), Bradesco would still be well placed if inflation returned.

But times change and when the Real Plan was introduced in 1994, bringing inflation down to moderate levels, different skills were needed. The bank that most effectively seized the new opportunities was Banco Itau. It was among the first Brazilian banks to introduce service charges to compensate for the loss of float revenue ­ a highly controversial move at the time. Itau has also proved the best at realizing the potential for growth by acquisition; it has been the most astute in growing its lending book; and it is Brazil's second largest private-sector fund-management operation, another useful source of fee income.


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