The best banks in 2014 from western Europe.

Andorra: Andbank

Andorra has faced a number of challenges common to most European countries over the past 18 months, including a more stringent regulatory environment, low interest rates and slow economic growth. Nevertheless, Andbank has successfully navigated a profitable growth path in the country thanks to a prudent development strategy. In particular, the bank’s compound annual growth rate for net profits over the past three years was 16.3%. In 2013 alone, net profits surged by 13.25%, while total assets increased by 9.2% and Tier 1 capital rose by 12.4%. 

By most metrics, Andbank outperformed its local peers. Its compound annual growth rate for assets under management (AUM) has been above 20% since the onset of the global financial crisis, against a market mean of 10.1%. This has translated into a corresponding uptick in market share for AUM, which jumped from 26% in 2008 to 40% by 2014.  

To support its ambitious growth plans, Andbank has also been active on the acquisition trail. “One of our main achievements these past months has been the acquisition of Banco Inversis’ private banking business, which represents a major step towards Andbank’s goal of becoming a leading international player in private banking. This transaction will allow us to use a cutting-edge technological platform and bring us close to 60,000 new clients, closing 2014 with more than €21bn of AUM,” says Jordi Comas Planas, chief executive and director of Andbank. 

Andbank’s provision of tailor-made asset management solutions includes two special purpose vehicles and seven wealth management companies which offer a range of standard and sophisticated products. Moreover, products can be offered across multiple jurisdictions, allowing customers to select investment options offered in any Andbank market. 

“We want to continue looking into the future and maintain our commitment to growth, profitability, AUM diversification, solvency and liquidity,” says Mr Comas Planas. 

Austria: Erste Bank

High exposure to eastern and central Europe by Austria’s lenders has led to a difficult few years. Nevertheless, while some banks’ key performance indicators showed signs of strain, most focused their energy on future growth. In this respect, Austria’s Erste Bank landed the Bank of the Year award off the back of its introduction of innovative new products and services. 

“Apart from regulatory requirements, which are still one of the main challenges facing banks globally, we are encountering significant changes in the industry. Digitalisation is one of them. However, we see these developments as an opportunity, not only to meet different customer needs, but also to strengthen our market position,” says Andreas Treichl, chairman of the management board and chief executive of Erste Group. 

Notably, Erste Bank, and the Erste Group’s associated savings banks, were able to acquire 90,000 new customers in 2013, giving them a total of 3.3 million customers across Austria. This impressive increase was achieved through a number of new initiatives. The October 2013 launch of YouInvest has been a particular success. It allows clients to retrieve clear information on their investments at any time, whether through video, blogs, online chat or a direct conversation with the respective fund manager. 

In August 2014, Erste Bank became the first Austrian lender to enable clients to open accounts online. This eliminates the need to visit a branch or post documentation via the mail as customer identification is executed through an online payment transfer from an existing account with an Austrian bank. Moreover, a new ‘scan and pay’ function introduced to Erste Bank’s netbanking application transfers data from payment slips directly into appropriate money transfer forms with the push of a button. 

These innovative measures, and others, ensured Erste Bank secured this year’s Bank of the Year for Austria. 

Belgium: ING

ING was the standout winner for the Bank of the Year country award for Belgium. For the seventh year in a row, the bank has experienced net year-on-year growth of its client base. By the end of 2013, the bank had accumulated more than 500,000 active clients since 2007. Of this number, 59,000 clients were secured in 2013 alone, pointing to the efficacy of ING’s strategy and the popularity of the bank in the domestic market. 

ING has also led the Belgian market in terms of online and mobile banking, particularly in the context of simple online products for the retail space. Over the past four years, the sales of these products have more than doubled and now account for about 40% of all simple product sales. This growth has come as more customers engage with mobile banking and ING’s dedicated mobile app. Since 2011, downloads of the app have reached 620,000, pointing to the growing use of direct banking, affirmed by the fact that daily mobile transactions tripled year on year in 2013. 

Alongside this commitment to digital innovation, ING is also enhancing its physical presence across Belgium. At the time of writing, 630 out of 741 branches have been refurbished to meet more open and client-friendly design standards. Moreover, most of ING’s branches are equipped with WiFi and iPads to encourage greater customer engagement with online banking tools. 

Nevertheless, greater competition and a more stringent regulatory environment are forcing most Belgian lenders to impose stricter cost controls. To this end, ING expects to make significant savings through a simplification of its organisational structure involving a reduction in its workforce of about 1115 personnel, mainly through natural attrition, by December 2015. 

Denmark: Handelsbanken

Handelsbanken’s prudent growth strategy has served it well in recent years. Scooping this year’s Bank of the Year award for Denmark under difficult regional and domestic economic circumstances, the bank demonstrated the kind of resilience and innovation necessary to prosper in this environment. Crucially, Handelsbanken once again met its key financial goal of having a higher return on equity than its peers, reaching 12.7%, up from 7.3% in 2012.

“The main challenge has been to continue to have profitable growth and the most satisfied customers in a very competitive market, which in turn has been in recession and stagnation over the past six years,” says Lars Moesgaard, Handelsbanken’s chief executive in Denmark.

Meanwhile, the bank also posted impressive gains according to most other indicators. Net profits increased by 87%, while assets and Tier 1 capital grew by 6% and 2.7%, respectively. This performance stems from the bank’s consistent business model, which places a premium on organic growth. Handelsbanken has broadened its range of products as well as its branch network in Denmark, which increased from 53 to 57 during this period, despite a country-wide decrease in overall branch numbers as a result of the financial crisis. 

Between 2008 and 2013, the bank’s average loan losses were 0.37%. This compares favourably with the sector average, which stands at 1.29% for the same period. Moreover, loans to the general public grew by 51% during this time against a sector-wide decrease of 26%. 

“Our business model is consistent, so we put all our effort into getting better every day. I see opportunities in continuing to increase our availability – both in terms of digital self-service solutions and local branches,” says Mr Moesgaard. 

Finland: OP Pohjola Group

As a result of an updated group strategy, Finland’s OP Pohjola Group has been undergoing something of a transformation over the past 15 months. Under the new approach, greater emphasis is being placed on profitability, with an elevated target on return on economic capital of 20%. In particular, the bank is now seeking higher returns in targeted business segments, including non-life insurance and wealth management, as well as specific regions, including the Helsinki metropolitan area.

Net profits were up 43% in 2013, while Tier 1 capital and total assets increased by 10% and 1% respectively. The group’s return on equity also improved, rising to 9.1% from 7%. Encouragingly, its cost-to-income ratio fell from 63% to 61%, pointing to the efficacy of the group’s new plan. 

“The simultaneous improvement in profitability and market position across our bancassurance operations serve as testimony to our unique strategy and its competitive edge,” says Reijo Karhinen, executive chairman of OP Pohjola Group.

Moreover, a greater emphasis on cost and capital efficiency is central to this new strategy. The bank is reallocating resources previously reserved for internal processes to customer-facing activities, while it works to improve the efficiency and quality of its operations. To achieve this, a new ‘Central Co-operative’ was established in 2012 to act as the central institution of the group’s amalgamated co-operative banks.  

In early 2014, the Central Co-operative successfully bought out the minority shareholders of Pohjola Bank, which is the group’s largest subsidiary, and includes the highly profitable non-life insurance operations. At €3.4bn, the buyout represented one of the European continent’s largest financial sector restructurings since the onset of the crisis, and will serve to integrate and streamline the group’s activities.  

France: Confédération Nationale du Crédit Mutuel

Confédération Nationale du Crédit Mutuel has won The Banker’s 2014 award for Bank of the Year in France, having posted a 23.3% jump in net profits to €2.65bn in 2013, with return on equity also up 0.7 percentage points to 6.8%.

Crédit Mutuel, which is part of an association of co-operatives, has actively contributed to financing the French economy, according to Michel Lucas, chairman at Crédit Mutuel, despite the uncertain economic environment. The bank also strengthened its operations, not just in France, but also abroad. Co-operation with Canadian co-operatives, as well as coverage of some countries bordering France and in north Africa, has also continued to contribute to Crédit Mutuel’s success. 

“Our common equity Tier 1 ratio places the Crédit Mutuel Group among the safest banks in Europe and [makes us] the safest bank in France,” says Mr Lucas. 

In 2013, the co-operative association increased its Tier 1 capital by 8.6% to €30.46bn. Trends relating to the lender’s cost-to-income ratio were also favourable, with this figure falling by 6 percentage points, while the non-performing loan ratio remained stable at 3.1%.

“Thanks to the trust shown by our customers and the solid financial fundamentals, the group can focus on growing, adapting and affirming its difference, constantly aiming to better help and serve its members and customers,” says Mr Lucas. 

In a market where retail banking has reached maturity, Crédit Mutuel is looking at new activities to increase its scope. One such example is the car sales initiative launched by the group’s regional bank in Toulouse at the beginning of 2014. Crédit Mutuel Auto includes financing through loans, leasing, maintenance and insurance contracts all included in the loan application file. Through this, customers can also buy a car at the bank, benefiting from a reduced price.

Germany: DZ Bank

Strong 2013 results, driven by a jump in profits and reduction in its cost-to-income ratio, saw The Banker’s judges award DZ Bank 2014’s Bank of the Year title for Germany. Net profits at DZ, which is the central institution for about 900 local co-operative banks – the so-called Volksbanken Raiffeisenbanken – rose by 51.4% year on year to €1.47bn in 2013. 

DZ Bank coordinates the efforts of the co-operative sector’s comprehensive range of specialised services to achieve synergies and increase market potential for the benefit of its local co-operative banks. 

“For DZ Bank Group, 2014 was dominated by the successful implementation of the biggest capital increase – €1.5bn – in the history of DZ Bank,” says Wolfgang Kirsch, chief executive at DZ Bank. “This was supported by a strong operating performance by all group companies and strengthened our market position.”

In its business line of corporate banking, DZ Bank has introduced a new geographical organisational structure with regional corporate customer units that help increase customer focus and which are aimed at enhancing the profile of the co-operative financial network in the corporate banking market. Through this, DZ Bank intends to increase its market share in corporate banking from about 18% to 25% in Germany in the next few years.

“Today, we already finance the success of many small and medium-sized companies. Our task will be to fully tap into this potential and to continue improving the efficiency of our business processes,” says Mr Kirsch. “Moreover, we will master the implications of digitalisation and adapt our group-wide portfolio of products and services.”

DZ Bank has added innovative technology to its offering, such as the mobile payment product iZettle, which allows retail and corporate customers of DZ’s co-operatives to take card payments through a chip-and-pin reader and a smartphone or tablet.

Greece: Alpha Bank

Alpha Bank is The Banker’s Bank of the Year 2014 in Greece. The lender has undergone an impressive recovery with net profits reaching €2.9bn in 2013, compared with 2012’s €1.1bn loss, while assets have also increased by 26.5%.

Alpha Bank acquired and integrated the fully capitalised Emporiki Bank in 2013, which saw 82 branches merged in 2013 and another 24 in the first two months of 2014, as well as €54m of cost synergies, exceeding Alpha Bank’s initial target.

“Following our successful recapitalisation in 2013, and the subsequent capital raising in the first quarter of 2014, Alpha Bank’s capital base was further strengthened, facilitating the full repayment of the Hellenic Republic’s preference shares,” says Demetrios P Mantzounis, CEO at Alpha Bank. 

“Within an improving economic environment, our superior performance on the European Central Bank’s comprehensive assessment clearly positions Alpha Bank as the stand-out Greek bank for our best-in-class capital base and demonstrates our ability to become a key pillar to the revival of the Greek economy.”

In June 2014, Alpha Bank also took over Citibank’s Greek retail banking business, including Diners Club of Greece. The acquired operations comprised Citi’s wealth management unit with about €2.1bn of assets under management, net loans of €400m, as well as a retail network of 20 branches, servicing 480,000 customers. 

“The recent acquisition of Citi’s retail operations enhances Alpha Bank’s status as a leading financial institution in Greece and complements our offering to our affluent customer base,” says Mr Mantzounis.

“Over the next quarters, we will focus on delivering our restructuring plan targets and restoring the group’s profitability, aiming at full privatisation,” says Mr Mantzounis. “Our strategy targets above-average returns for our shareholders.”

Iceland: Íslandsbanki

In an economy still operating under the capital controls introduced after the collapse of the country’s banking sector in 2008, Íslandsbanki has still managed to perform strongly, earning it the title of Bank of the Year 2014 in Iceland. Boasting a strong capital base of Ikr166bn ($1.35bn) – a 13.4% increase on 2012 – Íslandsbanki has improved its capital ratio over the past few years thanks to retained earnings. Íslandsbanki’s common equity Tier 1 ratio, 25.1% at the end of 2013, is high by international standards. 

The bank also showed a strong reduction in its non-performing loan ratio from 7.5% in 2012 to 3.5% as of 2013, while the Iceland-specific loan portfolio, which measures the progress of the restructuring of Íslandsbanki’s predecessor Glitnir, has decreased from 13.7% to 8.3% – a lower level than at Iceland’s other major banks.

“In the past year, our business focus has been on cross sales, cost control and capital efficiency,” says Birna Einarsdottir, CEO at Íslandsbanki. “Our success is borne out by clear strategy, strong earnings, a sound balance sheet, motivated employees and positive customer satisfaction survey results.”

Íslandsbanki has a strong position in the domestic credit card business as the leading MasterCard issuer in Iceland, with about an 85% market share, and as the exclusive issuer of American Express. It is also strongly positioned in the auto loan market, has a 37% market share in servicing large corporate customers in Iceland, and is the market leader in equity and foreign exchange trading. 

“Mergers in 2012 increased the bank’s market share significantly and set the scene for future income generation and synergy effects,” says Ms Einarsdottir. “In total, our customer base increased by about 42% for individuals and 33% for corporates. A new relationship banking model was introduced in January 2014 to further support cross- and up-selling activities to seek further organic growth.”

Italy: UBI Banca

While Italy’s economy faces a series of ongoing, systemic challenges, UBI Banca has emerged from this environment as the winner of the country’s Bank of the Year award. Despite these challenges, UBI Banca has acted swiftly to shore up its balance sheet while minimising its risk profile. Net profits for 2013 were up 203.3% as the bank continued its recovery from a challenging 2011, which saw net profits dip considerably. As of June 2014, its common equity Tier 1 capital ratio stood at 12.7%, meeting both nationally mandated net stable funding ratio and liquidity coverage ratio. 

“The performance of a banking group of our size cannot be fully decoupled from trends in the real economy, and recent years were tough in Europe and particularly in Italy. We have been effective at facing such an environment, remaining committed to quality, and finding a balance between safeguarding the bank’s soundness and continuing to provide support to our clients,” says Victor Massiah, chief executive of UBI Banca.

Crucially, UBI Banca initiated a strong cost control strategy to offset the difficulties inherent in the operating environment. Since 2007, the bank’s total costs have decreased by about 20%, or €500m, through the progressive reduction of staff, conducted on a voluntary basis, as well as the closure of 15% of the bank’s branches. The success of the bank’s strategy was made apparent following the European Central Bank’s recent asset quality review (AQR). 

“The AQR was among the largest and most detailed credit review processes ever carried out in a banking system: [UBI Banca] ranking first among Italian banks in terms of common equity Tier 1 ratio after the AQR was a great achievement,” says Mr Massiah. 

UBI Banca has also been at the forefront of service and product innovation in the Italian banking market. Its range of ‘Enjoy’ cards have been recognised for their versatility and functionality.

Luxembourg: Banque et Caisse d'Épargne de l'État

Banque et Caisee d’Épargne de l’État (BCEE) enjoyed another strong year in 2013, once again scooping the Bank of the Year award for Luxembourg. Tier 1 capital increased by 12% while net profits grew by 5.17%. Though total assets only grew at a marginal rate, of 0.45%, the bank has continued to expand both its products and services in a highly competitive market. Advances in internet banking, in particular, have seen the bank’s efforts recognised by a number of leading international entities in recent years. 

“With regulations becoming more and more strict, it was BCEE's main goal to confirm its financial soundness in the transparency exercises initiated by the European regulators and to achieve an excellent result (core Tier 1 of 15.38% in the base scenario and 12.85% in the adverse scenario) in the asset quality review and stress test by the European Systemic Risk Board,” says Jean-Claude Finck, chief executive of BCEE.

Through the development of its ‘S-net’ internet banking system, BCEE has become the local leader for electronic banking. S-net is available for use with both PCs and smartphones. This has translated to new service options for customers, with traditional branch banking available alongside e-banking services. Moreover, BCEE has opened its first ‘online branch’, enabling 24-hour-a-day banking services.  

“For many years, BCEE's strategy was to combine being customer oriented, low risk and socially responsible. The numerous rewards, as well as the excellent results, ratings and ratios, have confirmed that this is the right strategy. We are convinced that, with our large local network and innovative banking software and products, BCEE will continue to serve even better its faithful customers in the future,” says Mr Finck.

Malta: Bank of Valletta

Bank of Valletta (BOV) was the standout entry from Malta in this year’s awards. Shrugging off the worst of the eurozone’s economic problems, the bank continued along its impressive long-term growth trajectory with its key performance indicators registering positive results. 

In terms of Tier 1 capital, in 2013 BOV saw an 8.56% increase from 2012, while net profits improved by 4.6% and total assets by 3.02% over the same period. Its cost-to-income ratio saw an appreciable decline, to 38.7% from 40.7%, while return on equity reached an impressive 21.1%. 

“In the context of the challenges faced, BOV succeeded in growing its customer deposits and advances by 14% and 5% respectively, while registering an increase of 2% in its core operating profit. The bank performed satisfactorily in the [EU’s] comprehensive assessment, registering a core Tier 1 of 8.9% against a pass mark of 5.5%,” says Charles Borg, chief executive at Bank of Valletta. 

Customer deposits have continued to grow at a significant pace, both from retail and corporate clients. With total deposits now sitting at €6.2bn, BOV saw an increase of 7% in 2013 alone, despite the substantial levels of competition in the market. As the bank relies heavily on residents’ deposits for its funding needs there is virtually no need to access the international money markets. 

Sustained demand for home loans saw BOV’s customer retail segment generate year-on-year growth of 4% in 2013. Meanwhile, BOV has developed a small and medium-sized enterprises (SME) financing engine in its bid to become the bank of choice for SMEs in Malta. Moreover, in partnership with designated EU funds, BOV has facilitated the provision of credit for 530 SMEs over the past three years.

Netherlands: ING

The downturn in the eurozone has had a notable impact on the Dutch banking sector. While growth stories remain elusive, most lenders are now looking to the future by changing their business models to meet new economic and regulatory realities. ING has been at the forefront of this sweeping change, adopting a strategy known as ‘Think forward’, to capitalise on the new opportunities it sees emerging in the post-crisis environment. 

To put this strategy into context, in 2005 branches accounted for about 42% of all customer interactions with ING. Today, that figure sits at 5%. In the Netherlands alone, log-ins on ING’s mobile banking app jumped from 10 million in 2011 to 435 million in 2013. 

In terms of its retail business, ING launched contactless payments in April 2014 following the conclusion of a successful pilot scheme the previous year. This allows customers to pay for transactions no greater than €25 by swiping their card past the payment terminal. To date, ING has issued 4 million of these debit cards to customers in the Netherlands.

Another milestone in the retail space was reached in the third quarter of 2013, when the number of mobile app log-ins exceeded the internet banking log-ins for the first time. Accordingly, mobile traffic grew from more than 25 million visits per month by the end of 2012 to more than 41 million visits per month at the end of 2013. The success of this platform is partly attributable to ING’s ability to quickly respond to customer demand and modify the app to meet these requirements. 

The corporate side of the bank’s activities, ING Mid Corporate and ING Private Banking, established a platform for family-owned businesses to share knowledge and provide benefits to the customer from shared experiences. Moreover, ING Private Banking dispatched more staff to branches to increase its local presence in order to enhance customer centricity. 

Norway: Handelsbanken

Following its impressive results for 2013, Handelsbanken was the clear winner for Norway’s Bank of the Year award. The standout performance indicator was the year-on-year increase to the bank’s return on equity, which grew significantly to 17% from 13.5% in 2012. Similarly, its cost-to-income ratio also improved, falling to 31.2% from 35.5%. These gains were accompanied by a further decline in the bank’s loan loss ratio, which reached 0.08%, an encouraging continuation of a trend that started in 2011. 

Meanwhile, Handelsbanken’s Tier 1 capital increased by 2% and net profits soared by 26% to reach SKr2.64bn ($355.5m). In terms of total assets, the bank recorded a marginal decline from its 2012 numbers, dropping by 5%. The strength of these numbers underscores the bank’s careful approach to long-term growth and expansion. Based on deep customer relationships, Handeslbanken Norway relies on face-to-face relationships and the delivery of personal solutions. Accordingly, it is the only bank in Norway to have expanded its branch network in recent years. In 2013, Handelsbanken established its 50th branch in the country, before opening an additional branch in 2014. 

“Handelsbanken Norway aims for the best customers in the Norwegian market. As a selective challenger, we have many top customers to win. With no advertising, our plan is to increase our market share through winning customers based on other satisfied customers sharing the story about Handelsbanken and the personal service they have experienced,” says Dag Tjernsmo, chief executive of Handelsbanken Norway. 

While this branch relationship remains paramount, Handelsbanken also offers a range of digital and mobile banking platforms. In particular, a Facebook banking service is offered in tandem with more traditional internet services. Moreover, customers can also meet or phone their advisors outside of office hours.

Portugal: Banco Santander Totta

In 2013, Portugal entered its third consecutive year of recession. The economic difficulties facing the country have been profound, yet Banco Santander Totta has successfully charted a stable course to growth, enabling it to once again scoop the Bank of the Year country award for Portugal. Net profits reached €102m in 2013, an impressive achievement that positions the bank as the most profitable in the country. Perhaps more significantly, Banco Santander Totta was also able to consolidate its Tier 1 capital position. 

“Santander was the only bank that, throughout this period of crisis, did not require aid from the state, kept the highest ratings of Portuguese banking, and was the only Portuguese bank that always had profits. Also, we’ve reached a comfortable 15.2% of core capital in 2013,” says António Vieira Monteiro, chief executive of Banco Santander Totta. 

Indicators for 2014 appear to be similarly positive for the bank. Net income in the first half of this year reached €80.2m, an increase of 159.7% from 2013. This success has come as the bank continues to introduce new and innovative customer-oriented products to the market, including its latest debit card, Santander Select. This card allows Portuguese clients of Banco Santander Totta to travel globally and not pay any withdrawal commission when using a Santander ATM.

The bank is also overseeing the expansion and development of its highly successful online operation, known as Net Bank. An array of new services and products, including savings and investment products, are being made available to customers online. 

“We are facing 2015 with strong capital and liquidity ratios, excellent asset quality and efficiency, and increased demand from clients and non-clients, so we see strong opportunities for growth and increased market share, especially in small and medium-sized enterprises and digital channels,” says Mr Vieira Monteiro.

Spain: Banco Santander

Banco Santander was the standout winner for Spain’s Bank of the Year award. A combination of a clear strategy, strong fundamentals, a commitment to innovation and significant organisational restructuring in order to streamline its activities, all contributed to the judges’ decision this year. In particular, the merger of the retail and commercial networks of Santander, Banesto and Banif was one of the more striking features of Banco Santander’s entry. Expected to be completed in 2015, the merger is anticipated to deliver about €436m in synergies to the bank’s operations. 

“I think that the merger of the three banks in Spain was very successful because we did it in record time, clients were barely affected and, furthermore, it was perceived as beneficial. I am also pleased with the process of segmenting customers – companies, private banks, the self-employed and retailers – and branch specialisation, which is helping us improve the quality of our service and our market share,” says Enrique Garcia Candelas, senior executive vice-president and head of Santander Spain. 

In March 2014, the bank launched Santander Advance, a project designed to position small and medium-sized enterprises (SMEs) at the heart of an ambitious growth strategy. Started in Spain, and expected to be rolled out to other major markets globally, the initiative is expected to expand SME lending by 10% in all markets, including Spain, and to provide €30bn in new lending globally. 

Moreover, Banco Santander’s three-pronged multichannel strategy aims to transform the way the bank deals with customers. This includes the capacity to provide self-service options with online, mobile and cashpoint processes, while extending the potential and accessibility of remote products, including mortgages, utilities and insurance policies. 

“Our whole strategy aims to make us the best bank in the Spanish banking system in terms of quality, agility and accessibility in customer service. To this end, we are simplifying our internal processes and modernising our technology,” says Mr Garcia Candelas. 

Sweden: SEB

In 2013, SEB built on the success it has enjoyed in recent years by posting an all-time high in terms of operating profit at SKr18.1bn ($2.44bn). This number was 27% higher than 2012 and was accompanied by a corresponding uptick in the bank’s return on equity, which hit 31.1%, compared with 11.1% in the previous year. This came despite the sizeable global and regional challenges affecting most European lenders.

“The Swedish economy remained robust, but was of course impacted by the more divergent international trends. We continue to live in extraordinary times with ultra-low interest rates, no or low inflation and central bank stimulus and still, real economic growth is not gaining momentum,” says Annika Falkengren, president and chief executive of SEB.

The bank’s focus in 2013 was built on its existing strengths, namely large corporate and institutional businesses in the Nordic countries and small and medium sized enterprises (SMEs) in Sweden. This resulted in 108 new large corporate and institutional customers as well as 16,700 new SME clients plus an additional 40,000 new private customers. Last year also saw the bank introduce its first smartphone app for corporate customers in Sweden, alongside existing branch, telephone, internet and mobile banking services. 

“We have continued to strengthen our large corporate platform in Sweden, the Nordics and Germany. We have had the largest increase in customer satisfaction among banks in the recent Swedish Quality Index survey. Our customers appreciate our holistic and long-term approach in meeting their needs,” says Ms Falkengren.

In 2013, SEB also enhanced its leading position in the arena of green bonds. The bank has underwritten almost twice as many of these bonds as its closest competitors, at $4.6bn. Moreover, SEB enabled the first ever issue of green bonds in the Nordic region for the city of Gothenburg. 

Switzerland: Credit Suisse

Credit Suisse has continued its evolution in Switzerland to meet the realities of an economic environment being shaped by new regulatory trends and depressed economic growth. The innovation and resourcefulness which has come to define the bank’s operations since 2008, coupled with strong performance indicators, landed Credit Suisse the Bank of the Year Award for Switzerland. 

“Our industry is undergoing a significant transformation both for structural and cyclical reasons. Credit Suisse started to implement key measures to address these challenges early on. This places us in a good position relative to our peers – both in our Swiss home market and globally,” says the bank's regional CEO of Switzerland and head of private banking and wealth management, Hans-Ulrich Meister.

To this end, the bank continued to reallocate its resources towards high-growth areas, including businesses in emerging markets and its ultra-high-net-worth client franchise. Moreover, Credit Suisse has looked to optimise its private banking and wealth management franchise to augment productivity in a number of key markets. 

Credit Suisse also focused on improving its cost structure by optimising its use of capital. By the end of 2013, the bank had completed SFr3.1bn ($3.22bn) of annualised run-rate cost savings compared with the first half of 2011. Based on these numbers, the bank anticipates reaching its targeted cost savings in excess of SFr4.5bn by the end of 2015. 

“In Switzerland, we have been able to expand our position across many of our businesses thanks, in particular, to our ability to deliver our entire expertise from across the bank to our clients. We also made significant progress in upgrading our investment process and in product delivery for private and institutional clients. In investment banking, we can look back on a series of high-profile transactions in our Swiss home market and globally,” says Mr Meister.

Turkey: DenizBank

A successful integration of Citibank Turkey’s consumer banking business, combined with a boost in profits and assets and significant technological advances, have made DenizBank The Banker’s Bank of the Year 2014 in Turkey.

DenizBank recorded a 40% jump in net profits to Tl1.01bn ($446m) in 2013, which translated into return on equity (ROE) of 17.2%. This came despite macro-prudential measures introduced by the Turkish authorities in 2010 to curb retail loan growth. The traditionally profitable Turkish banking sector has consequently seen ROE across all banks decline to 11.7% in 2014 from more than 20% in previous years. 

DenizBank also had to cope with sanctions relating to its parent, Russia-based Sberbank, which were later removed by the US-based agency Office of Foreign Assets Control, according to Hakan Ates, president and CEO at DenizBank. 

“Despite all these headwinds, DenizBank has managed to become a market leader in [terms of] loan growth and profitability, increasing its loan book and net profit by 29% and 15.8%, respectively,” he says.

DenizBank’s strategic acquisition of Citi’s business in 2013 significantly improved the bank’s market share in credit cards in terms of quantity and turnover, which also translated into an improvement of the bank’s financial performance.  

“DenizBank has [long] been the market leader in several niche and strategic sectors, such as agriculture, health, education, infrastructure, energy, tourism, sports clubs and municipality finance,” says Mr Ates. “This competitive edge contributed significantly to our high and sustainable growth and profitability during the volatile post-crisis banking environment of the past five years. We will continue to increase our penetration in these segments, while growing our market share in the under-banked small and medium-sized enterprises segment next year.”

UK: Lloyds Banking Group

Lloyds Banking Group’s strong increase in net profits from £415m ($658m) in 2012 to £863m in 2013, as well as its falling cost-to-income and non-performing loans (NPLs), have helped to make it The Banker’s Bank of the Year 2014 in the UK.

NPLs fell 1.3 percentage points to 5%, as of 2013. The group further reduced its non-core assets by 35% in 2013, while impairment charges were lowered by 58% as of the end of June 2014, reflecting improvements in the bank’s overall portfolio quality.

“We’ve made significant progress in becoming a low-cost, low-risk, customer-focused UK retail and commercial bank, [which] has enabled the UK government to sell a further stake… of Lloyds shares [at a profit],” says António Horta-Osório, chief executive at Lloyds Banking Group.

In 2013, Lloyds relaunched the Lloyds Bank brand as well as TSB Bank, of which Lloyds has a stake through TSB Banking Group. TSB listed on the London Stock Exchange in June 2014, and after additional share sales, Lloyds retained a 50% stake in the bank. Lloyds further developed its Halifax brand by extending its geographical reach into Scotland. Lloyds continued to launch innovative products, including Club Lloyds packaged current account, and flexible loans across all of its high street brands.

“It has been a transformational year, which has seen the group become stronger, simpler and more efficient,” says Mr Horta-Osório. “This has enabled us to once again increase our support to the UK economy, including growing our lending in all our main market segments, with a special focus on small and medium-sized enterprises. The resulting increased profitability has also shown the benefits of this customer-focused business model for our shareholders.”

Management has laid out a comprehensive business plan for 2014 to 2017, announcing at its half-year results its aim to resume dividend payments by the end of the year.

PLEASE ENTER YOUR DETAILS TO WATCH THIS VIDEO

All fields are mandatory

The Banker is a service from the Financial Times. The Financial Times Ltd takes your privacy seriously.

Choose how you want us to contact you.

Invites and Offers from The Banker

Receive exclusive personalised event invitations, carefully curated offers and promotions from The Banker



For more information about how we use your data, please refer to our privacy and cookie policies.

Terms and conditions

Join our community

The Banker on Twitter