Those banks which were able to articulate the strategy that drove their financial performance and how they overcame regulatory, competitive and economic ​hurdles were most like to impress the judges in this year's Bank of the Year awards. This year, we made awards in 149 countries. The global and regional winners are profiled here.

​Global politics may be uncertain and economic growth lacklustre but that does not detract from excellent banking performance. In fact, banks that thrive in difficult circumstances are just the ones our judges are likely to favour in picking awards’ winners. 

As always, The Banker’s Bank of the Year awards attracted high-quality entries from across the world and from countries that are developed, emerging, politically troubled and economically challenged.

The challenge for our judging committee is to weigh up the various factors that impact on bank performance and decide whose track record and strategy comes out on top.  

This year we made awards in 149 countries together with five regional awards, an award for the best bank at financial inclusion and the global bank of the year award.

There are many factors to consider when making an award. Financial performance is important but doesn’t win by itself. To really impress the judges, banks must also score highly in articulating the strategy that drove their financial performance and how they overcame regulatory, competitive and economic ​hurdles.

Then there is digital strategy to be considered as well as use of new technology and, of course, none of this makes any sense unless it delivers benefits for customers.

Those clever banks that made it through the process will be receiving their awards at this year’s black-tie dinner in London in early December. Congratulations to them all.    ​

Global and Western Europe, ING Bank

In the aftermath of the global financial crisis, European banks were, for the most part, the institutions that struggled for the longest, which means that The Banker’s Global Bank of the Year award has not been given to a western Europe-focused bank since 2009. 

But this year things are different: ING Bank, with its established operations across the Benelux states as well as challenger and growth markets, has shown that an emphasis on innovation and technological advances can be a recipe for success in banking, despite pressure on returns due to growing regulatory burdens and prolonged periods of ultra-low interest rates.

“Customer needs are changing more rapidly than ever before,” says Ralph Hamers, chief executive and chairman of the executive board at ING Group. “In order to continue to lead in digital banking, we need to offer a better customer experience that is instant, personal, frictionless and relevant.”

ING’s strong performance in 2015 underlined the success of its strategy. Net profits rose by 69.8% to Ä4.66bn, returning 11.9% on equity. The bank further continued its policy of cutting costs, lowering its cost-to-income ratio by 10.7 percentage points to 54.5%, while the proportion of non-performing loans across the group also decreased to 2.5%.

“This customer-first approach and our overall Think Forward strategy have continued to generate strong commercial growth, which combined with improved scale through digitalisation has improved quarterly net profits throughout 2015 and year-to-date 2016,” says Mr Hamers.

ING is at the forefront of innovation through its partnerships with fintech firms and through investing in fintech businesses such as US firm Kabbage. Together with Kabbage, ING is piloting instant digital lending for small and medium-sized enterprises (SMEs) customers in Spain using advanced credit scoring, a technology that is to be expanded to ING’s businesses in Italy, France and the Netherlands.

Other innovations are in Poland, where customers can access pre-approved consumer loan offers on mobile devices, while Turkish clients can apply for loans via direct channels and can convert conventional credit cards into contactless payment cards through their smartphones.

Since 2015, ING has also been working on exploring blockchain technology, having joined the R3 consortium of banks to exploit its opportunities for banks and clients.

ING plans to invest in its challenger markets – Germany, Spain, Austria, Italy, France and Australia – to “use our strong savings franchises and expand into payments accounts to build primary banking relationships with customers”, says Mr Hamers, who adds that ING seeks to use its direct banking expertise to expand its lending business at low cost in areas such as consumer lending and lending to SMEs. ING’s consumer lending assets increased by €1.3bn in 2015, and German consumer lending through its direct bank ING-DiBa alone grew by €1.5bn in just two years. ING further aims to extend its SME lending from seven markets to 11 by 2017.

In its growth markets – Poland, Turkey, Romania and Asia – the bank seeks “to invest to achieve sustainable share” in retail and commercial banking and focus on “digital leadership by converging to the direct-first model and prioritising innovation”, according to Mr Hamers.

The lender aims to further improve its customer experience by moving ING Netherlands and Belgium to an integrated banking platform, leveraging the combined strengths of both countries. 

“I am convinced that our recently announced investment programme and intention to converge towards a single digital banking platform are necessary steps to enable ING to further improve the customer experience, further expand primary customers and lending, and increase efficiency,” says Mr Hamers. “We strive to keep getting better every day.”

Central and eastern Europe, Raiffeisen Bank International

Central and eastern Europe (CEE) is not the easiest territory for banking. Having largely seen slow or negative growth following the global financial crisis, most CEE economies have now recovered from recession. But bank levies and forced conversions of foreign exchange-denominated loans in several jurisdictions have caused additional headaches for the region’s banks.

Despite all these difficulties, Austria’s Raiffeisen Zentralbank (RZB) and its subsidiary Raiffeisen Bank International (RBI) performed solidly. Many of the 14 markets covered by its subsidiary banks in the CEE region showed improvements, turnarounds or continued strong performance, and five of them are award winners: in Belarus, Bosnia-Herzegovina, Bulgaria, Romania and Slovakia.

This adds up to a return to net profit for RZB in 2015 of €465m, compared with 2014’s €556m loss, returning 7.6% on equity.

“RBI aims at being the best bank for its customers in central and eastern Europe as well as Austria. This is a driving force to constantly optimise services and products as well as processes and efficiency throughout the whole group,” says Karl Sevelda, chief executive at RBI. “RBI has successfully implemented a transformation programme towards a less complex, more efficient and better capitalised bank. It is well on track.”

RBI operates on the basis of long-term customer relationships in all customer segments: retail, small and medium-sized enterprises, corporate banking, financial institutions and sovereigns. 

Synergy among the bank’s structures and a further improvement in the use of sales tools have positively contributed to the bank’s performance. Portfolio quality is a priority for RBI, which closely monitors the performance of its creditors and focuses on ‘in time’ reactions, proposing alternative solutions to customers who have faced slowdown in their business operations. For the entire bank, this means the proportion of non-performing loans rose only slightly in 2015, by 0.3 percentage points to 11.1%.

In 2016, the boards of RBI and RZB passed resolutions in principle to merge RBI with its parent, which will bring an improvement to the group’s “overall capitalisation”, as well as an increase in transparency and enhanced governance “without adapting the proven business model for our clients”, according to Mr Sevelda.

Asia-Pacific, DBS

Singapore’s DBS has won the Asia-Pacific Bank of the Year award in recognition of its approach to expansion in the region, which includes both traditional paths to growth as well as innovative digital banking strategies.

These results are even more impressive considering the challenges DBS faces. “[A main challenged faced by the bank] would be the increasingly challenging macroeconomic environment. The global economy has been marked by more pronounced economic uncertainty and volatility,” says DBS CEO Piyush Gupta. “Despite the challenging environment, the bank’s first-half net profit reached a record high, a testament to the strength and resilience of the franchise.”

Nonetheless, DBS still pursued strong regional development. Today it has more than 280 branches in 18 markets, 14 of which are in Asia. In China, it is the fifth largest foreign bank, while in Taiwan it is the fourth largest. In Indonesia, DBS is in the top five banks for wealth management. 

In India, DBS has the largest network among Singaporean banks operating in the country and it has launched a new digital banking offering, Digibank. 

“Digital innovation pervades every part of the bank, from our corporate and consumer business to our 22,000 employees,” says Mr Gupta. “One example of a digital transformation was the launch of Digibank in India, the country’s first mobile-only bank that is completely paperless, signatureless and branchless. Digibank brings together an entire suite of groundbreaking technology, from biometrics to artificial intelligence, enabling customers to enjoy a whole new way of banking. We will continue to leverage technologies such as cloud storage and data analytics to make the bank more efficient.”

Digibank simplifies account opening in that customers can open an account at any of the 500 coffee outlets DBS is partnering with. Customers can also interact with an artificial intelligence virtual assistant for any queries. DBS is also looking to launch Digibank in other Asian markets, such as Indonesia and China. 

DBS’s acquisition of ANZ’s wealth management and retail banking business in five markets is set to boost its regional expansion further. “With the acquisition of ANZ’s retail and wealth business, we will be able to scale up our business in Singapore, Hong Kong, China, Taiwan and Indonesia,” says Mr Gupta. 

Americas, Santander

From Chile to Mexico, from Brazil to Peru, Santander is an established and committed presence stretching across the whole of Latin America and beyond. In Latin America, as countries’ economic fate swung from the hopeful years of the commodities supercycle to today’s sluggish growth and low interest rates, Santander’s performance has been impressive. 

Its Brazilian business, the group’s largest in the region, is a case in point. Before the economy started sliding into what became Brazil’s worst recession in a generation, Santander had presciently rebalanced its loan book towards better quality credit. The operation kept growing despite the downturn, with higher profitability, improving efficiency and a diminished loan delinquency, which resulted in improved ratios for 2015 and proved the market’s importance to the Spanish group’s international presence.

Santander performed well given market conditions elsewhere in the region. In Mexico, its overall product portfolio grew six times faster than the country’s gross domestic product. In Argentina, Santander’s exceptional results are an encouraging base on which to build a long-term growth strategy as the country turns towards orthodoxy and market-friendly measures and away from heavy-handed governmental management of its economy. Santander showed its digital skills too with the launch and upgrades of products and systems across the region. In Brazil alone this resulted in a digital customer base of 4.4 million people and in three-quarters of all transactions being carried out via alternative channels. A wider digital presence now complements Santander’s formidable operations in the region.

“I would like to thank The Banker for recognising Santander as the best bank in the Americas,” says Santander Group chief executive officer José Antonio Álvarez. 

“Our long-term presence in the Americas is a strong competitive advantage that contributes to our geographical diversification and helps balance our profits between mature and developing markets. We currently generate more than 40% of our profits from the region, where we have been active for more than 60 years. We continue to invest in infrastructure and digitalisation in the Americas to improve our retail customer franchise and increase our market share in the retail, small and medium-sized enterprises and corporate segments.” 

Middle East, Ahli United Bank Group

The Middle East is currently facing a surfeit of challenges. Regional conflict, lower oil prices and the desperate need for structural reform are denting the growth prospects of oil-importing and oil-exporting markets alike. As such, banks in the Middle East now are squaring up to a more challenging liquidity environment, in which a greater cost of funds goes hand in hand with growing pressure on asset quality. 

For banks such as Ahli United Bank (AUB) Group, with a footprint across the wider region, this environment is not an easy one to navigate. But as the winner of this year’s Middle East regional award, AUB has bucked the trend. Net profits were up 11.3% in 2015, while return on equity was at a comfortable 16%. 

“Despite the slowdown in key regional economies and the higher cost of funding arising from tighter liquidity across the regional banking system, AUB sustained its positive core earnings trend across its business segments through effective balance sheet management as reflected in the 2015 financial year and for the first nine months of 2016,” says Adel El-Labban, group chief executive officer and managing director at Ahli United Bank. 

In recent years, AUB has played to its key strengths as a regional lender by expanding into new markets and increasing its cross-border financing business. Indeed, the latter now accounts for about 21% of AUB’s total loan portfolio, underlining its success in harnessing trade and investment flows across the region. 

Meanwhile, in March 2016, AUB Group began banking operations in the Dubai International Financial Centre through Ahli United Bank Limited (AUBL), a 100%-owned subsidiary of the group. This will enable AUB to offer corporate banking, private banking, wealth management, trade finance, treasury and cross-border financial products and services to clients based in the United Arab Emirates and across the region. AUBL is the first bank in the region to receive a Category 1 licence, which permits all banking activities except retail banking, as well as dealing in Emirati dirhams.  

“AUB’s sustained earnings growth in the current difficult operating environment are a testament to its well-managed business model based on diversification and cross-border flows, proactive risk management and intelligent cost spend,” says Mr El-Labban.  

Africa, Standard Bank Group

Economic growth across sub-Saharan Africa reached just 3.4% in 2015, the region’s worst performance since 2009, as collapsing commodity prices and a cooling global economy hit the continent’s resource-based economies hard. In this environment, many of Africa’s traditional powerhouses, including Nigeria, South Africa and Angola, are on the ropes, but growth stories are beginning to emerge elsewhere. 

For the continent’s banks, navigating this shifting economic landscape has not been easy, but South Africa’s Standard Bank Group, Africa’s largest lender, has maintained an impressive growth trajectory. It has done so while executing an ambitious digitisation drive, including the rollout of a new core banking system, while diligently maintaining its commitment to customer service. 

“This was a period of heightened political uncertainty in our home market of South Africa and globally,” says Sim Tshabalala, chief executive of Standard Bank. “The prices of the main African export commodities, including oil, improved slightly over the period, but remain well below the ruling prices in the first half of this decade.” 

In 2015, Standard Bank Group’s headline earnings grew by 27% to R22bn ($1.55bn), driving its return on equity to 15.3%, compared with 12.9% in 2014. Notably, the return on equity for the bank’s operations in the rest of Africa was 20.9%. Meanwhile, the bank’s Tier 1 capital ratio was 13.3% and its cost-to-income ratio was 56.7%. 

As part of its digitisation drive, Standard Bank is in the process of upgrading its core banking systems. By the end of 2015, 73% of the bank’s ‘rest of Africa’ customers were on the new core banking system. In South Africa, 570 million transactions were processed under the home market’s new system, an increase of 27% on 2014. Continuing the upgrade of the group’s entire network will be a priority.

“We have two immediate strategic priorities,” says Mr Tshabalala. “First, we want to finish our major IT investment in the core banking transformation. We will have gone a long way towards completing the whole programme by [the end of 2017]. We’re already seeing substantial benefits as measured by our ability to provide cutting-edge digital financial services. Second, we’re determined to keep our return on equity rising through our 15% to 18% target range.”

Financial inclusion, Bank of Palestine

The commitment shown by Bank of Palestine to its gender inclusion programme is both impressive and effective. The lender not only rolled out initiatives that help women in the financial system in a conservative, male-dominated society, it embraced the values of gender equality to the point of re-evaluating its own conduct towards employees. This marks the difference between a valuable but potentially isolated venture, and one that has the power to change society.

With a population of 4.6 million, Palestine has traditionally seen exceptionally low participation of women in the workforce: a mere 17% of the total, which corresponds to a 40% female unemployment rate. Bank of Palestine realised this situation was unrelated to women’s level of education; in fact, more young women continue to be enrolled in education than men, where female students generally outperform their male counterparts.

To address this imbalance, the bank looked into its own hiring practices and concluded that change in the market had to start from within. As a result, it increased the percentage of female employees from 16% to 32% between 2007 and 2016, with the goal of reaching an even split by 2020. It committed to equal pay at recruitment level and introduced child allowances and family healthcare benefits that were previously only extended to male employees. Before launching the programme, it made sure staff received appropriate gender sensitivity training to understand the needs of female customers as it attempted to provide them with more than the simple savings accounts women had typically used the bank for in the past. 

Finally, once launched, the initiative focused on raising the level of financial education and business skills of women, and included sponsoring a mini-MBA in association with the World Bank’s International Finance Corporation which led to business growth and lines of credit by the bank. The course started with 40 participants in charge of small companies employing 224 people, mostly women, and most of whom have now become customers of Bank of Palestine. 

Furthermore, the lender has launched an awareness campaign to educate women about their labour law rights. Bank of Palestine is also able to offer a practical example of what women can aspire to: in 2014 it appointed a woman, Lana Abu Hijleh, to its board of directors. 

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