Commerzbank has seen a remarkable bounce back in its profitability and share price over the past four years, something that was particularly apparent in 2023. The year began with its re-inclusion in the DAX in February, five years after it was ejected from the index of German blue-chip stocks. This was thanks to a dramatic recovery in its share price from the depths it hit during the early Covid-19 period.

It is not normally thought of as one of the banks with a large stronghold on central and eastern Europe. Nevertheless, BNP Paribas still owns relatively large banks in what are, in effect after the 2022 invasion of Ukraine, the region’s two biggest markets in terms of banking: Poland and Turkey.

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.

BNP Paribas Wealth Management operates across 17 countries, serving a client base of entrepreneurs, family offices and high net-worth individuals.

Market doubts, three years ago, about whether Andrea Orcel’s management of UniCredit would be sufficiently orientated to shareholder value have proven to be far from the mark. Orcel might have shied away from a deal with the Italian government to buy Banca Monte dei Paschi di Siena in 2021, but this has not prevented UniCredit from remaining a large and growing part of the European banking story.

Prospects for the Azerbaijani banking sector continue to improve as bank balance sheets strengthen and tighter regulatory oversight is established. Nowhere is this more evident than at Bank ABB – International Bank of Azerbaijan – which has made good progress since the decisive resolution of its legacy risks in 2022.

Romania was the place of perhaps the most important bank M&A deal to be announced in 2023: the merger of the local units of Italian group UniCredit and Greece’s Alpha Bank. The deal promised to allow UniCredit, as the owner of 90% of the merged entity, to supplant Societe Generale-owned BRD as the country’s third-biggest bank.

The awards period marked a triumphant return to performance for Allied Irish Banks (AIB), Ireland’s best bank. Putting behind it its involvement in the years-long industry-wide tracker mortgage scandal in Ireland, for which it was fined €100 million in 2022, the bank posted a very strong recovery in 2023, with record profits that nearly tripled versus the previous year. Revenues rose 62%, driven by net interest income that was up more than 80%.

HSBC wins the award for western Europe’s best bank for transaction services thanks to the delivery of an impressive range of services to corporate treasurers that the bank has developed over years of heavy investment.

Even its rivals in Spain admit to feeling the impact last year as CaixaBank moved on from integrating Bankia to concentrating more exclusively on developing its business organically. This is evident, for example, in the savings market, where its customer funds increased by 3.1% in 2023. In insurance, a vital part of the group’s activities, there was also healthy growth, with a 7% volume growth in general and life risk premiums.

Banking small and medium-sized companies across central and eastern Europe has become intensely competitive for the regional banks. Even amid the anaemic economic growth of last year, competition to grow the SME client base remained high as banks sought to expand their market share and boost assets.

The strategic case for banks to remain in central and eastern Europe remains intact: that is the official line from Scope Ratings at least. The agency found that faster growth and higher interest rates in CEE have, overall, boosted the profitability of western European banks present in the region.

For Danske Bank, Denmark’s best bank, 2023 was a year of rehabilitation after a difficult period that culminated in the settlement in late 2022 of historic money laundering issues. With a strong financial performance that saw profits nearly double even after adjusting for the regulatory charges in 2022, the bank has come roaring back to life.

NLB Banka is Montenegro’s best bank, having demonstrated strong growth and development last year, which in turn contributed to its record bottom line.

For a small economy, Luxembourg boasts many banks: 120 were authorized in 2023. Many of these primarily serve international clients, in particular providing securities services to institutional investors from across Europe and beyond.

For many banks, sustainable finance is about more than just finance, it is about the quality of advice they provide and what they themselves are doing to be more sustainable.

Like in the neighbouring Czech Republic, foreign groups own all five of Slovakia’s top five banks. And like in the Czech Republic and elsewhere, higher interest rates have brought higher profits – and new taxes on banks, in Slovakia’s case following the formation of a new government in October last year.

All banks invest heavily in their digital products and services, but the return on that investment can vary widely.

It has been a great time to be a Greek banker. Rating agencies returned the sovereign to investment grade in 2023 and the country’s lenders, having reduced non-performing loans and cost of risk while rebuilding capital ratios, also delivered improved profits.

In recognition of multiple market-leading developments in its banking business and an impressive financial performance last year, maib is Moldova’s best bank.

It is hardly surprising that an Italian bank should excel at lending to small and medium-sized enterprises, which are the backbone of the industrial strategy of the country. SMEs are at the heart of UniCredit’s UniCredit per l’Italia strategy, which has seen a further €10 billion of support extended to individuals and corporates this year – including a special assistance package for Emilia Romagna in May in response to widespread flooding.

Despite the Estonian economy experiencing a severe recession last year, the country’s banking sector remained robust and continued to generate stellar growth, supported by the resilience of companies and households facing higher interest rates.

Things could not have gone much worse in 2023 for Islandsbanki, the bank that won this award in the past two years. A long-awaited regulatory report into the sale of part of the government’s holding in 2022 found that Islandsbanki itself had committed various violations during the process. Islandsbanki was fined Isk1.2 billion ($8.6 million), a record for Iceland.

Despite a local economic slowdown, Bosnia and Herzegovina’s banking sector remained healthy in 2023 for growth, profits and asset quality. It is a market that UniCredit Bank Mostar and Raiffeisen Bank dominate in terms of market share, and this year UniCredit – led locally by chief executive Amina Mahmutović – retains the award for the country’s best bank.

The fourth-biggest bank in Portugal, which has been fully owned by Spain’s CaixaBank since the end of 2018, saw an exceptional performance in 2023. After record results for the firm across the board, Banco BPI is clear winner of the award for Portugal’s best bank.

Even its rivals in Spain admit to feeling the impact last year as CaixaBank moved on from integrating Bankia to concentrating more exclusively on developing its business organically. This is evident, for example, in the savings market, where its customer funds increased by 3.1% in 2023. In insurance, a vital part of the group’s activities, there was also healthy growth, with a 7% volume growth in general and life risk premiums.

As the equity capital markets remained sluggish across Europe last year, financing activity was all about debt. So, it is perhaps no surprise that western Europe’s best bank for financing this year is the one that dominated the debt capital markets league tables working on 509 deals worth $128 billion equivalent for a 7% market share: BNP Paribas. Even in ECM, the French firm ranked number five behind sector leaders BofA Securities and Goldman Sachs.

Prime minister Donald Tusk’s defeat of the former ruling party PiS in elections last October brought hope for a less strained relationship between Poland and the EU. It also brought hope for more favourable policies towards banks, after the PiS government’s mortgage holidays and bank taxes.

DemirBank is Kyrgyzstan’s best bank in recognition of an impressive performance last year.

Despite the overbearing presence in Hungary of national champion OTP – and the emergence in 2023 of a much larger government-owned lender in the form of MBH Bank – international firms continue to compete in the domestic market. The biggest of these international players is K&H Bank, owned by Brussels-based group KBC.