The best banks in 2016 from western Europe.

Andorra, Crèdit Andorrà

Following concerns over money laundering related to Andorran lender Banca Privada d’Andorra in 2015, other banks in the country sought to prevent a wider crisis in Andorra’s financial system. Within this environment, Crèdit Andorrà, holding the presidency of the Association of Andorran Banks, played a key part in stopping the case from affecting the country’s other banks through a commitment to transparency. This, along with sound financials, makes Crèdit Andorrà The Banker’s Bank of the Year in the country.

Having overcome the issue, Andorran banks are now focusing on a gradual adaptation process to EU standards, including transparency and tax information exchange.

“At Crèdit Andorrà we work with diligence and professionalism to preserve the trust and reputation earned over the years in the eyes of institutions, markets and clients, enabling us to contribute to the progress of the Andorran economy as whole,” says Josep Peralba Duró, chief executive at Crèdit Andorrà. The bank also further implemented the reputation plan Connecting Business and Values, aimed at passing on to the bank’s stakeholders and employees the corporate culture and values.

Despite the difficult environment in 2015, Crèdit Andorrà kept its profits stable at €72m and increased its Tier 1 capital by 4.3% to €593m. The lender also expanded its scope to the Portuguese market by opening a branch of Banque de Patrimoines Privés. This sees Crèdit Andorrà active in Luxembourg, Spain and Portugal alongside Andorra, giving customers the opportunity to locate their investments in different banking centres.

Crèdit Andorrà has relaunched its e-Crèdit home banking service, a responsive website allowing customers to access it from any device. It includes stock market information, transaction operations, new alert services and the ability to categorise and label expenses. A personalised advisory service to assist clients has also been set up. 

Austria, Bawag PSK

Like most banking sectors in Europe, Austria’s challenges are largely connected with the eurozone’s persistently low interest rates and steadily rising regulatory requirements. However, competition is also increasing and the Austrian economy is only growing slowly. 

Bawag PSK, The Banker’s Bank of the Year in Austria, defied the odds, with ambitious growth plans and solid 2015 financials showing strong profit growth of 25.5%. Across-the-board indicators rose, while the bank’s non-performing loans contracted to 2.1% and its cost-to-income ratio fell by 4.9%.

Bawag focused its business model on high process- and cost-efficiency across all businesses, low and predictable risk costs and further strengthening its capital position, says Bawag PSK chief executive Byron Haynes. “We continued to invest in our core businesses providing our customers with simple, transparent and best-in-class products and services across our multi-sales channels,” he says. 

“Our strong increase in profitability was driven by fixing our cost base, by our continuous growth in core revenues and our focus on key lending products, while maintaining a disciplined pricing approach, operating an efficient balance sheet and maintaining a conservative risk profile.” 

Bawag emphasises the need for innovation in digitalisation of internal workflows as well as for customers. It added a new upload functionality to its online banking platform and launched an international bank account number- and payment slip-scanning function as part of its mobile application. It executed selected strategic growth transactions to continue strengthening the bank’s profitable retail business approach, says Mr Haynes. 

In 2015, Bawag bought the leasing business of the former Austrian Volksbanken Group, creating the third largest auto leasing franchise in the country, and expanded its retail business into Western markets by buying a diversified international residential loan portfolio with a low risk profile. 

Belgium, ING Belgium

With market-leading innovation and a solid financial performance despite the eurozone’s low interest rate pressure on profits, ING Belgium is Bank of the Year in Belgium for the fourth time in a row. 

“In a very competitive and mature market, combined with continuous low interest rates, high levies and complex regulatory demands, we needed to be on our best game to safeguard our strong current position and meanwhile establish a healthy growth pad,” says Rik Vandenberghe, CEO at ING Belgium. 

And the bank did – putting special emphasis on its fully aligned multi-channel customer strategy, engaging with customers in an increasingly personal way in its digital environment, while supporting its personal advice with digital services.

The bank’s performance was underlined by its wide-ranging innovation. Since April 2015, ING Belgium has been piloting Payconiq, its new mobile payment solution, which will allow consumers across Europe to make contactless, card-free payments using only a smartphone and an international bank account number from any European bank.

In 2016, ING joined forces with Belgian peer KBC to launch Joyn, an integrated payment and loyalty solution. The application combines two loyalty platforms together with the payment possibilities of ING’s Payconiq application. Joyn will be the biggest loyalty programme in Belgium, connecting 1.4 million users with 4000 merchants.

Other technological advances of 2015 included SmartFin Capital, a €75m vehicle to invest in groundbreaking as well as financial technologies. The partnership allows ING to test innovations from portfolio companies more quickly, and to introduce customer innovations to the market faster.

“Customer behaviour is changing rapidly,” says Mr Vandenberghe, adding that there is a need for more and better advice and more comprehensive, easy and tailor-made digital tools. 

Finland, OP Financial Group

Doing business in an economy that only came out of recession in 2015 and is still only posting sluggish growth is putting pressure on the Finnish banking sector. This, coupled with low interest rates and extensive regulatory initiatives, has limited the sector’s earnings growth. However, The Banker’s Bank of the Year in Finland, OP Financial Group, reported strong growth. OP’s net profits increased by 40% in 2015 to E853m, having also increased Tier 1 capital by 27% and assets by 13%. 

“I am particularly pleased with our success in simultaneously maintaining high profitability, outgrowing the market in most of our core businesses, attracting an increasing number of new customers, improving customer experience, and pushing forward with a comprehensive transformation agenda -preparing us for the digital disruption in financial services,” says Reijo Karhinen, president and group executive chairman at OP Financial Group.

The bank’s fully integrated bancassurance model saw the number of joint banking and insurance customers increasing 4% year on year to 1.67 million in the first half of 2016, thanks to work on improving the customer experience through customer-centric innovation and service design, process simplification, providing a seamless omni-channel experience, and improving accessibility through extended hours and a continuously expanding offering of digital services.

OP further increased its IT development budgets and launched initiatives in digitalisation, such as an automation of lending processes and the modernisation of customer interface channels. This will also involve the creation of fully digital offerings in banking, non-life insurance and wealth management. 

OP is transforming the bank from a financial services group to a diversified services company, according to Mr Karhinen. This will be built around core capabilities in areas such as home, mobility, security, e-commerce and health and wellbeing. 

France, Groupe BPCE

With the eurozone’s low interest rates and increasing regulatory requirements not stopping at the French financial sector, the profitability and solvency of the country’s banks is providing a major challenges. Groupe BPCE, The Banker’s Bank of the Year in France, has shown resilience with 11.6% growth in net profits in 2015, as well as a strategy to meet ongoing challenges.

“Our success in maintaining our revenues and our profitability demonstrated the resilience of our universal banking model, including Natixis’ core businesses and the dynamic commercial activities of the retail banking networks,” says François Perol, chairman of the management board at Groupe BPCE. 

“In 2016, we also continued a selective acquisitions strategy with the purchase of Fidor, a 100% digital bank with an innovative platform, and PJ Solomon, which specialises in mergers and acquisitions, in line with Natixis’ asset-lite model,” he says.

BPCE is working on finding €900m of cost synergies by 2017 and had already reached savings of about €537m as of June 30, 2016. Changes in the group’s organisation account for 68% of the contribution to cost synergies while information systems and processes contributed 23% and 9%, respectively.

Groupe BPCE is also at the forefront of innovation: in 2016 it was the first banking group in the eurozone to offer Apple Pay mobile payment services through its two retail banking networks, Banque Populaire and Caisse d’Epargne. The group expects that its quick movement on that front will attract new customers to its banking network.

“In 2017 we will define Groupe BPCE’s new strategic plan for the coming years,” says Mr Perol. “Our objective will be to seize the opportunities of the digital environment with a dedicated transformation plan, along with an overhaul of our customer relationship system and a strong focus on operating efficiency.”

Germany, HypoVereinsbank

In a highly competitive banking sector with squeezed margins due to regulation and low interest rates, alongside competition in pricing and investments in digitalisation, HypoVereinsbank (HVB) has continued its highly disciplined approach to risk and operating costs, winning it the award for Bank of the Year in Germany. 

The effectiveness of HVB’s risk management is reflected in low non-performing loan exposures – the ratio of bad loans was 2.8% in 2015, an 0.7 percentage point contraction from 2014 – and its risk profile. 

The lender benefits from a customer-centric business model; a high capital base – Tier 1 capital compliant with Basel III stood at E19.6bn in 2015, a 3% increase year-on-year; a solid funding base; and a good market position in its core business areas. 

HVB was the first bank in Germany to provide digital services to its small and medium-sized enterprise (SME) clients – the backbone of the German economy – and more than 125,000 customers are now taking advantage of its Business Easy system. In 2016, HBV continued to invest in this offering to expand its range of digital services to include corporate customers.

Part of Italy’s UniCredit group, HVB is able to leverage its regional strengths in UniCredit’s international network for the benefit of its customers. 

In a drive to provide clients with better services, at the end of 2015 HVB set up a joint venture between its corporate and investment banking business segment and the Unternehmer Bank business unit, which caters for SMEs. 

This allows HVB’s SME clients to benefit more from HVB’s investment banking -services, as the joint venture pools special products across corporate treasury sales, debt capital markets, equity capital markets and corporate finance advisory in an effort to boost cross-selling.

Iceland, Íslandsbanki

As Iceland’s banking sector stabilises following the financial crisis, competition among its three largest banks is strong. Yet, thanks to a dedication to its customers, balanced initiatives to cut costs without losing market share and continued asset quality work, Íslandsbanki is our Bank of the Year in Iceland. 

In 2015, Íslandsbanki further lowered its non-performing loan ratio to 2.2%, the lowest among the top three banks in the country, and a figure that was as high as 7.4% in 2013. The lender further boosted its capitalisation by 7.5% to Ikr198bn ($1.76bn) of Tier 1 capital, reflecting a core equity Tier 1 ratio of 25.1%. Assets increased by 15% to Ikr1046bn assets, the strongest growth metrics within Iceland.

“We are operating in a competitive market environment on all fronts, with increasing regulatory burden,” says Birna Einarsdóttir, chief executive at Íslandsbanki. “This brings profitability challenges that we are meeting with increased focus on digital service and the rationalisation of our branch network.”

Íslandsbanki strives to be the number one bank for customer service in Iceland, and has achieved that despite reducing the number of branches within the country from 18 in 2014 to 15 in 2016 by investing in digital channels. This means that while Íslandsbanki’s branch market share is only 17%, it holds a 30% share in retail banking – while lowering costs by 1.5 percentage points year on year in 2015 to 56.2%.

The lender is also at the forefront of innovation with initiatives such as its mobile payment application Kass, its advanced Online Mortgage Calculator, which allows customers to calculate a number of alternatives within the mortgages portfolio, and its multi-platform communication, for example, through online screen sharing.

Digitalisation will be a focus for banking in general and at Íslandsbanki in particular, Ms Einarsdóttir notes. “We will be adding new functions and different approaches to communicate with customers,” she says.

Italy, Intesa Sanpaolo

The Italian banking sector is making headlines for its high non-performing loan (NPL) ratio, while demand for lending is still depressed by slow economic growth following three years of recession. 

Nevertheless, Intesa Sanpaolo, The Banker’s Bank of the Year in Italy, has made efforts to support economic recovery and reduce its non-performing exposures.

The bank has boosted its capitalisation in the past few years to reach €39.2bn of Tier 1 capital at year-end 2015. Its fully loaded common equity Tier1 ratio stood at 13.1%. In 2015, Intesa reported another significant increase in net profits to €2.74bn – more than double the 2014 figure. While NPLs only fell by 0.3 percentage points to 9.5% in 2015, this is still well below Italy’s 18.1% banking sector average.

Intesa takes pride in the bank’s performance in the July 2015 European Central Bank stress tests, in which it was “the only major listed European bank whose excess capital was above Supervisory Review and Evaluation Process regulators’ requirements, even in the most adverse scenario”, according to Carlo Messina, chief executive at Intesa Sanpaolo. 

The bank is also “at the very top in Europe in terms of profitability”, he adds.

At the beginning of 2016, Intesa Sanpaolo confirmed its €3bn dividend commitment for the year, having paid dividends of €2.4bn in 2015 and €1.2bn in 2014. One of the bank’s focus areas has been supporting the real economy by advancing credit to Italian households and businesses, especially small and medium-sized businesses (SMEs). In 2015, it granted about €34bn of credits to households and €41bn in lending SMEs, a respective increase of 68% and 54%.

Intesa Sanpaolo is moving more towards a wealth management business model, says Mr Messina, a segment that generates about 50% of its pre-tax income. The group is also strengthening these activities outside Italy, specifically in London and China. 

Liechtenstein, LGT Private Banking

Private banking is the largest area of financial services in the 37,000 inhabitant principality of Liechtenstein. And in such a small domestic market, regulatory changes and technological developments play an important role. 

LGT Private Banking, The Banker’s Bank of the Year in Liechtenstein, is adapting to the challenges and is underlining its position through organic and inorganic growth.

“Thanks to our long-term strategy we were able to continue steady growth [in 2015] in spite of difficult market conditions,” says Thomas Piske, chief executive at LGT Private Banking. “We achieved growth in managed assets as well as a regular inflow of net new assets in all regions and business sectors. Complemented by the acquisition of Vestra Wealth in London, we are now present in another important financial centre.” 

In 2015, LGT successfully integrated a portfolio from HSBC’s Suisse Private Bank of more than SFr7.7bn ($7.62bn) in assets under management and about 70 staff, which allowed the bank to expand its market position in high-net-worth and ultra-high-net-worth clients, especially from central and eastern Europe, western Europe and Latin America.

The group further expanded in 2016 through the acquisition of a majority stake in London-based wealth management partnership Vestra Wealth, which holds £5.6bn ($6.98bn) in managed assets, providing a significant foothold in the UK market. 

LGT, owned by the family of the prince of Liechtenstein, differentiates itself from other banks through its strong in-house asset management capabilities focused on private markets, liquid alternatives and specialised long-only and multi-asset class solutions.

“We have a stable and straightforward ownership and management structure, a solid balance sheet and high liquidity, a clearly defined strategy and a strong company culture, excellent staff and strong skills in investment management,” says Mr Piske. 

Luxembourg, Banque Internationale à Luxembourg 

As is the case in other countries in western Europe, Luxembourg’s banks are facing increasing costs and workload thanks to growing regulatory requirements, putting pressure on returns. 

Banque Internationale à Luxembourg (BIL), The Banker’s Bank of the Year in the country, has shown it is adapting to the challenges with the implementation of its new 2020 strategy and geographic expansion of the business – and it showed the results: BIL reported a 10% rise in net profits in 2015.

“We have managed to make the bank future proof,” says Hugues Delcourt, chief executive at Banque Internationale à Luxembourg. “To do so, we have embarked on a large-scale operational and IT transformation project, embracing new and innovative technologies, while adapting our costs where possible. This project involves improving our skills via dedicated training programmes.”

The strategy overhaul, BIL2020, aims to strengthen the bank’s position and increase revenue by providing relevant and adapted value propositions to BIL’s clientele, with a strong emphasis on innovation and technology. The bank’s complete transformation will also come with the introduction of a new architecture for BIL’s core banking system.

BIL has further expanded into the Middle East by opening a branch in Dubai, which can offer all of the international financial and wealth-structuring services required by families, entrepreneurs and expatriates in the region, particularly targeting ultra-high-net-worth individuals. 

It also merged its private banking business in Switzerland with that of KBL in Switzerland, creating a private bank of a significant scale with a sizeable increase in assets under management. “Focus creates success,” says Mr Delcourt. “We will follow our strategic agenda based on a universal bank model in Luxembourg and a niche wealth management for non-resident clients from a limited number of geographies.”

Malta, HSBC Malta

Recognising the changes to the banking industry through stricter capital and regulatory requirements and persistent negative interest rates, HSBC Malta, The Banker’s Bank of the Year in the country, has taken difficult steps to adjust its business to the new operating environment. 

To the detriment of profits and return on equity in 2015, HSBC Malta worked to reach the capital adequacy obligations set under the European Central Bank’s (ECB’s) Supervisory Review and Evaluation Process three years ahead of the deadline, allowing it to focus on growing the balance sheet in future.

“We appointed a new leadership team, signed a landmark three-year agreement with our trade union and increased the pace of strategy implementation, exceeding key regulatory targets significantly ahead of schedule,” says Andrew Beane, chief executive at HSBC Malta, who led the resolution of a three-year long union dispute within his first 100 days in the role and established the new strategy “to be the bank of choice” for customers in Malta. 

HSBC Malta further embarked on a decisive cost-reduction exercise, which also reduced profitability in 2015 but will save the bank €4.5m in ongoing staffing costs. Taking into account all of these measures, the bank’s 2015 reported net profits of €46.8m were significantly below the underlying net profits of €61.4m, which were 17.9% higher than 2014’s profits. Tier 1 capital rose by 7.9% to €329.9m.

To reward shareholders for supporting the capital building and cost-reduction measures, the bank secured ECB support to increase its dividend pay-out ratio to 65%.

“Our strategy will enable us to continue to build sustainable profitability by focusing on our customers and people while operating to the highest regulatory standards,” says Mr Beane, adding that HSBC Malta “will transform customer service, change the market with a new small business proposition, and deliver a paradigm shift of digital innovation”. 

Netherlands, ING Netherlands

The low interest rate environment and the increased regulatory costs are a challenge for banks across Europe, especially those in the eurozone. This, coupled with continuously evolving client needs and the fast-moving financial technology world, raises expectations, something ING Netherlands was able to fulfil.  The Banker’s Bank of the Year in the Netherlands has further shown solid financial results as well as scores of innovative solutions. 

“To be able to deliver on those changing needs, ING Netherlands implemented a new, agile way of working,” says Nick Jue, chief executive at ING Netherlands. He adds that the bank changed its organisational set-up to have squads – small clusters that are run like a start-up – which are grouped into tribes “inspired by the Spotify model”.

“This new way of working and organisational structure are helping us to increase the pace of innovation to serve changing customer needs – one of ING’s strategic priorities,” says Mr Jue.

ING Netherlands has also been demonstrating its agility. In January 2016, for example, it implemented peer-to-peer app Twyp in the Netherlands, after launching it a month before in Spain. Twyp, which stands for ‘the way you pay’, allows consumers to pay small amounts to contacts on their mobile devices in just a few seconds. The bank further introduced contactless smartphone payments and added Kijk Vooruit, a forecasting feature, to its mobile banking application, offering users a better overview of planned and predicted transactions.

For its small and medium-sized enterprise clients, ING launched Direct Lease, an online leasing platform that works across all channels, while new online scenario service Valuefinders enables businesses to benchmark their performance against the market’s top performers, pinpointing exactly how much monetary value is captured in their financial supply chain.

Portugal, Santander Totta

Strong financials and continued growth underlined Santander Totta’s stellar performance in 2015. Organic growth and expansion due to its acquisition of a €10bn portfolio of assets from Banif in December 2015 boosted the bank’s results.

Net profits grew from €193m in 2014 to €291m organically – profits including the acquired portfolio reached €575m. Santander Totta’s significant organic growth was underlined by a 14.9% increase in revenues and cost cuttings of 3.8%, while deposits and loans increased by 7.3% and 6.8%, respectively.

Compared to its Portuguese peers, in 2015 Santander had the largest profit, best capital ratios and ratings, was the most efficient bank and the one that grew the most, according to Antonio Vieira Monteiro, CEO at Santander Totta. 

“All these attributes are also true in 2016 year to date,” he adds, going on to stress that the bank’s role in financing [businesses] and the economy, as well as the fact that the bank grew its client deposits more than its -competitors.

In 2015, Santander Totta continued to implement its multi-channel transformation plan. 

As part of this, the bank installed Wi-Fi in all of its branches and launched a new application that allows customers to access their accounts wherever they are, while also simplifying frequent operations.

Going forward, Santander intends to extract value from the assets and liabilities acquired from Banif and grow organically, gaining market share in corporate and retail banking, says Mr Vieira Monteiro. 

“Also, we are preparing the bank for the future,” he adds, “and we will invest in the multi-channel and digital relationship with our clients, maintaining our sustainable leadership and helping Portuguese companies and families prosper in a way that is simple, personal and fair.”

Spain, CaixaBank

Navigating the eurozone’s ultra-low interest rate environment while dealing with regulation and some legacy issues related to the financial crisis has widely been on the agenda for Spain’s banks in recent years. CaixaBank, this year’s Bank of the Year in the country, has shown dedication to turn around the business, lowering its non-performing loans (NPLs), while focusing on growth and innovation.

In 2015, CaixaBank reported E814m of net profits, 31.4% higher than in 2014, a 2.21% increase in Tier 1 capital to €18.5bn, and a reduction in NPLs by 1.8 percentage points to 7.9%.

“This year we are finally seeing the fruits of our strategy of becoming the bank of choice for households and businesses in Spain,” says Gonzalo Gortázar, chief executive of CaixaBank. “Market share gains are flowing though the income statement as more and more clients trust us to manage their finance and insurance requirements.”

In January 2016, CaixaBank launched imaginBank, Spain’s first mobile-only bank providing financial services through mobile apps and social networks. The approach, especially targeted at young customers, allows users to manage their finances in a fully independent manner. 

CaixaBank, which operates a bancassurance model, has shown interest in growing through targeted mergers and acquisitions. Its integration of Barclays Bank SAU in 2015 increased the lender’s net interest income (by 4.8%), its fee and commission income (10.3%), customer lending (4.7%) and customer funds (9.1%). CaixaBank launched a bid to takeover Portugal’s Banco BPI, of which it already owns 44.81%, in 2016.

“We see opportunities in leveraging our people, capital and technology to do more of the same but at a faster pace as the economic recovery consolidates,” says Mr Gortázar. “We plan to work together with BPI to replicate this success story in Portugal.”

Sweden, Swedbank

In a country where negative deposit rates have been weighing on the banks since July 2014, Swedbank, The Banker’s Bank of the Year in Sweden, has recognised the need for high cost efficiency and a low-risk balance sheet and is adapting its business accordingly.

In 2015, Swedbank further increased its capitalisation by 12.5% to Skr104.6bn ($11.32bn) and reduced its cost-to-income ratio by 2 percentage points to 43%.

“Despite the many challenges the banking sector is facing, such as new regulations and negative interest rates, Swedbank has continued to deliver strong results,” says Birgitte Bonnesen, president and chief executive at Swedbank. “This has been accomplished through a diligent focus on keeping risks and costs low. Income has, to a large extent, been protected through our successful asset repricing efforts to account for increased capital requirements.”

Swedbank has chosen to adapt to the challenges of digitalisation in an incremental manner rather than through one wide-sweeping project, allowing it to be able to react and adjust quickly if initiatives do not work as planned. Among the initiatives implemented in 2016 was the possibility for clients to renew their mortgages with one click through the mobile phone and other digital channels, at a personalised interest rate. Customers can now also apply for a mortgage through digital channels.

Swedbank is speeding up its “transformation to become the modern bank we want to be”, providing customers with “the best tools to obtain an overview of their finances” and giving them the opportunity to do all their daily banking activities through the bank’s digital channels, according to Ms Bonnesen.

“Next year we will thus increase investments into initiatives such as developing our customer data management capabilities, further digitalising the lending process, and strengthening direct sales within the savings area,” she adds.

Switzerland, UBS

Despite the challenges of negative interest rates and increasing regulatory requirements, in 2015 UBS reported its best results in eight years. Net profits increased by 79% to SFr6.2bn ($6.2bn), returning 13.7% on tangible equity – 3.7 percentage points above target.

A key component of UBS’s earnings strength is the high percentage of revenues it generates from recurring income, such as portfolio management, asset-based investment fund fees, financing services and custody, as well as net interest income. 

The bank further boosted its capitalisation by 23.1% to SFr36bn of Tier 1 capital in 2015, reflecting a Swiss systemically relevant bank common equity Tier 1 capital ratio of 14.5%.

“[Also], in the first nine months of [2016] we delivered good results across all businesses, generated record profits and recorded net new business volume growth in Switzerland,” says Sergio P Ermotti, group chief executive at UBS. He adds that the group gathered net new money in its global wealth management businesses while reducing group-wide costs against regulatory headwinds and maintaining a strong capital position.

UBS did not stop innovating while delivering its cost management strategy. In 2015, it launched its One Wealth Management Platform, a global IT platform that will make it easier for clients to access services and help the bank implement new regulations, platform changes and product launches faster and more cost-efficiently. 

Other initiatives included UBS’s new Wealth Management Online feature, which brings UBS’s advisory solutions to its digital banking offering, as well as UBS Paymit, an app that enables clients to send and receive money via smartphone. 

“We aim to be the world’s leading wealth manager and the premier universal bank in Switzerland, enhanced by an asset manager and investment bank that are world class in their chosen areas of focus,” says Mr Ermotti. 

Turkey, Akbank

With violent conflict across its southern border in Syria, terror attacks and a failed military coup, Turkey has had a tough couple of years. For its banks this meant seeking to deliver solid results despite volatility and a slowing economy, while staying on a path towards greater digitalisation.

In a fiercely contested banking sector, Akbank, The Banker’s Bank of the Year in Turkey, followed a sustainable growth strategy, concentrating on profitability and efficiency with a prudent risk management approach. In a year when most banks saw their profitability decline, Akbank’s 2015 net profits fell by just 2%, still returning 12.1% on equity. What is more, the lender bolstered its capitalisation by 7% to Tl28bn ($8.4bn) of Tier 1 capital and increased its assets by 15% to Tl252bn.

“Akbank has maintained strong results thanks to its solid capital base, efficiency management, robust risk management practices, reliable deposit base and high-quality asset composition,” says Hakan Binbasgil, board member and chief executive at Akbank. 

The bank had anticipated an increasing interest rate environment in 2015, which led it to follow a selective growth strategy linked to risk management, which is now bearing fruit in terms of Akbank’s asset quality. 

The lender further sought to increase its deposit taking in relation to its loan writing, decreased its interest rate risk and dependency on short-term foreign exchange borrowing, while increasing the bank’s liquidity and the maturity of its liabilities.

In 2015, Akbank launched Turkey’s first wealth management platform, controlling Tl225bn of assets under management with an 11% market share. “We were happy to see that our focus on technology and dedication to the future of direct banking also paid off,” says Mr Binbasgil. “We are now one of the most efficient banks globally. The bank will transition to a new structure called ‘Next Generation Akbank’ in 2017.”

UK, Lloyds Banking Group

Continued efforts to repay taxpayer assistance, solid financials, as well as its support for the UK economy, makes Lloyds Banking Group Bank of the Year in the UK for a fourth year in a row.

Besides paying an increased dividend to its shareholders of about £2bn ($2.48bn), Lloyds’ 2015 performance also allowed the UK government to reduce its stake in the bank at a profit – from 24.9% to around 9%.

“The past year has seen Lloyds remain focused on delivering on our targets to support people, businesses and communities, as set out in our Helping Britain Prosper plan,” says António Horta-Osório, group chief executive at Lloyds Banking Group. “The group’s strong performance over this period demonstrates that our UK-focused, simple and low-risk business model is the right one for customers and shareholders, even during uncertain and challenging times.”

Having successfully completed its 2011-14 strategy, which saw underling profit increase by 5% to £8.1bn, Lloyds made a solid start into its 2015-17 strategy. This centres on a multi-channel approach for superior customer experience, becoming simpler, more efficient and maintaining a low cost base (a 49.3% cost-to-income ratio in 2015), as well as delivering sustainable growth through Lloyds’ strong retail business while growing in markets where it is under-represented.

In 2015 Lloyds launched Apple Pay as well as its new online mortgage process, Agreement in Principle, offering customers a decision instantly instead of waiting two days – an innovation that has been 100,000 mortgage applications completed since launch. 

In 2015, Lloyds further maintained its position as the largest overall lender to the UK economy, according to Mr Horta-Osório. “Our net lending to small and medium-sized enterprises has grown by 4%, bringing the total growth over the past five years to 28%, when the market contracted by 13%. This is something we are particularly proud of.”

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