The Banker Global Awards salute outstanding performances by commercial banks in not only 143 countries but also in all the world’s regions.

GLOBAL BANK OF THE YEAR: ROYAL BANK OF SCOTLAND

RBS is set to be the biggest beneficiary from the €71bn acquisition of ABN AMRO, the largest ever acquisition in the banking sector. It will be propelled into the top rank of European banks and will also strengthen its presence in Asia. The 70% premium for the Dutch bank was bold, and its forecast benefits of the transaction will not be easy to achieve, but RBS has an exceptionally good track record for integrating its acquisitions, most notably in the case of NatWest. Despite the sale to Bank of America of La Salle, an important US business which RBS had previously hoped to acquire, it believes the projected earnings enhancement for the group will be largely unaffected. RBS will still be boosted by the global wholesale and international retail businesses of ABN AMRO, and it will acquire a sizeable cash pile.

The bank not only showed skill in clinching the acquisition with a consortium that it orchestrated, it also launched a highly successful securities issue to help fund its 38% share of the consideration. In the largest ever Tier 1 capital financing package, the bank raised €6bn through five simultaneous issues of Tier 1 securities in a number of different formats, currencies and markets.

Meanwhile, the RBS group as a whole has looked in good shape. Beating City forecasts for the first half of the year, profits were up 11% to £5.1bn (€7.1bn). Average customer deposits grew 10% and lending by 9%, while overall income in Asia doubled.

WESTERN EUROPE: FORTISEvery year the banking community seems to have a celebrity mergers and acquisitions (M&A) battle, and this year the spotlight was on the takeover of ABN AMRO by Fortis and its bid partners.Fiercely fought, the deal was complex and charged with significant business and regulatory implications. There were historic aspects too, as the takeover signals the break up of a Dutch institution whose roots go back to the 19th century.The acquisition of ABN AMRO will not only propel Fortis’s growth in the Netherlands by merging retail and commercial banking operations, it will also create a leading force in private banking and asset management in the rest of Europe. In mature private banking markets, the combination of the businesses will expand the geographical coverage in Germany and France while it will strengthen Fortis’ position in its home market of Belgium. In growth markets, the deal will fortify the bank’s ranking in Spain, the UK, Poland and Turkey.“Fortis is delighted to be named Bank of the Year in western Europe for the first time,” says chief executive Jean-Paul Votron. “This award is particularly pleasing coming in the same year that Fortis has succeeded in its transformational acquisition of ABN AMRO. Credit for this award is due to our 60,000 employees around the world, who have for the past three years consistently delivered an exceptional performance across both banking and insurance, achieving our key financial and strategic targets.“Our strong customer focus and our decision to grow our business in Europe and selectively in Asia and North America have proven successful. Together with ABN AMRO we will become de facto the number five bank in the eurozone, the number three private bank in western Europe and a top-tier European asset manager.”

CENTRAL & EASTERN EUROPE: UNICREDIT GROUPItaly’s UniCredit Group continues to play a leading role in central and eastern Europe (CEE), where 6.9% real gross domestic product (GDP) growth in the region helped UniCredit’s massive network of 65,224 employees across 18 countries in the area produce record profits and exceptional growth in 2006.Split into two divisions, the CEE Division (16 countries) and Poland’s Markets Division (covering group operations in both Poland and Ukraine), UniCredit had an outstanding year in 2006 with pre-tax profits in the CEE Division up 31.9% to €1.06bn and Poland’s Markets Division up 27.4% to €999m, providing an aggregate total pre-tax profit of €2.06bn.The CEE Division, which services 24 million retail, corporate and institutional customers in more than 3000 outlets, covers Azerbaijan, Bosnia & Herzegovina, Bulgaria, Czech Republic, Croatia, Estonia, Hungary, Kazakhstan, Latvia, Lithuania, Romania, Russia, Serbia, Slovakia, Slovenia and Turkey and almost all operations there have showed very strong expansion. This year, UniCredit subsidiaries UniCredit Bulbank and Yapi Kredi Bank were ‘Bank of the Year’ in Bulgaria and Turkey respectively on the back of good growth performances.In 2007, Austrian subsidiary Bank Austria Creditanstalt (BA-CA) continued to increase its earnings power substantially in the first half, increasing net profits by 76% with the CEE Division (managed out of BA-CA in Vienna) growing very strongly.In its Poland Markets Division, which includes Poland’s second and third largest banks, Bank Pekao and Bank BPH, UniCredit has a combined market share of 20% in Poland, making it the dominant franchise with a nationwide network of 1300 branches and leader in terms of total assets and loans. And with a 1% market share in Ukraine, this entire division looks set for further expansion.

ASIA: HSBCHSBC has long been in the top league of banks in Asia, but it has gone up yet another level in recent months. The figures speak for themselves: profits before tax in Asia were up 30% to $5.6bn in the first half of 2007. The bank’s strong position in Hong Kong, and expansion into China both through organic growth and its 18.6% stake in the Bank of Communications, mean it is well placed to generate further profits from China’s economic growth.The bank also has an increasingly important franchise in India, especially in the retail market. Its personal financial services division alone now has 2.8 million customers and it has many more through its recently launched consumer finance unit, HSBC Pragati. It has also become one of the leading players in the Islamic finance market across a number of countries, including Indonesia and Malaysia, through HSBC Amanah.Sandy Flockhart, chief executive of the Hong Kong and Shanghai Banking Corporation in Asia, says: “Our strategy in Asia is clear: we will focus on the region’s emerging mass affluent as well as the booming consumer segments, while exploiting fast-growing trade within Asia’s thriving economies and between Asia and the rest of the world. We will use a multi-layered approach to implement our strategy. For example, as we grow our branch networks where regulations allow, we will also strengthen alternative channels and internet banking to extend our reach. Where our scope to grow organically is constrained, we will forge strategic partnerships to broaden our scope and presence. HSBC Asia Pacific is already the largest international bank in Asia by assets and by profit before tax, but the prospects in Asia remain plentiful – and our competitive advantage of joining up our unique global footprint will help us capture these opportunities.”

LATIN AMERICA: BBVA Spanish bank BBVA wins The Banker’s award for Bank of the Year for Latin America on the back of its outstanding performance in a number of countries in the region. Not least of these is Mexico, where BBVA Bancomer is the largest bank in loans, deposits and mutual funds and has been growing strongly in consumer finance, cards, mortgages and corporates, as well as remittances and associated products.In Latin America, BBVA saw net attributable profit for the banking business grow 47% and its pensions and insurances business 10%.The bank’s operations in Paraguay and Venezuela – in both of which it has won the Bank of the Year awards – underline its strict approach to risk management, especially because of the challenging scenarios in the two countries, with government interference in the banking system in Venezuela becoming ever more intrusive. In Colombia, where it also won Bank of the Year, its efficient and fast integration of Banco Granahorrar is worthy of note. It also has operations in Peru, where it has a 26% market share, Argentina, where it is the largest bank by deposits, and Chile, where it is the fourth placed bank, among other countries.Emerging markets are never straightforward and yet BBVA as a whole has profited from being the second largest bank in Latin America with 23 million customers to deliver, at 36%, the best return on equity of the top 25 global banks and, further evidence of good management, the best cost/income ratio at 44%. What is also impressive is that the bank has among the lowest non-performing loans to total assets ratio, at 0.86%, of the top 25 banks – its credit and risk management in countries where data on customers and credit histories are far from the norm deserves top marks.

MIDDLE EAST: NATIONAL BANK OF KUWAIT National Bank of Kuwait, the largest bank in Kuwait, has not only produced record profits in 2006 and for the first nine months of 2007 but has continued its ambitious regional expansion strategy and now operates in 17 countries on three continents. Recently, NBK won the bid for Egypt’s Al-Watany Bank, completing a 94% acquisition of the bank at the end of October, after acquiring 40% of Istanbul-based Turkish Bank in August.“Entering the Egyptian market is another significant and strategic step to achieve NBK’s vision,” noted NBK chief executive Ibrahim Dabdoub. “We are counting on the significant market prospects that Egypt offers and will endeavour to develop and promote the bank and make it a significant player in the market.”In recent years, NBK has made large regional strides, entering Iraq, Jordan, Qatar and Saudi Arabia (opening a branch in Jeddah in early 2006). In 2007, NBK received a licence to operate in the UAE, which gives it a strong presence in all the main Gulf markets. As part of its strategy, the bank’s investment banking arm NBK Capital is currently building the largest dedicated team in the Middle East with more than 40 bankers and is acting in key deals in the region. In 2006, NBK Capital acted as financial adviser to the leading regional telecoms company MTC on its $4bn revolving credit facility.With growing operations in Qatar, Bahrain and Saudi Arabia and the acquisitions in Turkey and Egypt, NBK is significantly strengthening its worldwide network and building on not only its domestic strength but also its extensive international presence, which includes offices in London, Paris, New York and Singapore.

AFRICA: STANDARD CHARTEREDStandard Chartered has always been a pioneer and innovator in Africa. Rapid economic growth across the continent has brought immediate rewards for the bank as well as opportunities to introduce more sophisticated and high-margin products.In Sierra Leone, for instance, it has started a wholesale banking team and has been involved in sizeable project finance deals. The bank’s Tier 1 capital in the country grew 91% last year. In Tanzania it has grown its revenue base, despite an impairment loss on a major account, by 16% by introducing a variety of value-added products, especially in its structured agriculture and trade finance business.Meanwhile its commitment to the retail market has been underlined by its introduction of Botswana’s first chip-based credit card, as well as its first women’s account, and of a customer service centre in Sierra Leone. In Tanzania, it introduced a new savings account with the highest rate of interest on offer in the country, and new trade accounts for small and medium-sized enterprises (SMEs), which were also rolled out across a number of African countries, including Nigeria.Fostering SMEs has been a strong theme at Standard Chartered over the past year: it has recently launched the ‘China-Africa trade corridor’, a new capital management and financing service intended to help SMEs grow internationally.David Cutting, chief executive of Standard Chartered Botswana, says: “Africa remains a core part of Standard Chartered’s global strategy. The international nature of Standard Chartered means that our customers benefit, not only from the bank’s local knowledge, but also our international experience and expertise. We have a unique franchise and as a result, our business in Africa is performing well. It is also noteworthy that the bank has won the Bank of the Year Award for Africa for the fourth time in the past seven years.”

EMERGING MARKETS: STANDARD BANKThe Banker’s award for Bank of the Year from the emerging markets goes to South Africa’s Standard Bank Group for another very strong performance in 2006 and into 2007, plus a landmark deal with China’s largest bank, Industrial & Commercial Bank of China (ICBC), which creates a strategic partnership of untold worth to the group, South Africa and to sub-Saharan Africa overall.Standard, whose operations span 18 African countries and 21 countries outside of Africa with an emerging markets focus, produced a 27.6% growth in net profits in 2006 to reach $2.6bn and a normalised return on equity of 25.2% on the back of a 28.2% growth in assets across the globe. In 2007, robust growth continued at the bank as economic growth in developing countries continued to outpace that of the developed world. In the first half of this year, the group’s non-interest income grew by 31%, with fee revenue up 25% and trading revenue up by 62%.The key move, however, is the groundbreaking ICBC link in October, where the Chinese giant, the winner in this category last year, paid $5.5bn for a 20% stake in Standard Bank. Given China’s focus on Africa and Standard’s presence across the continent, the deal represents a strong vote of confidence in the future relationship between the two regions and establishes a significant financial services gateway between China and Africa.Standard chief executive Jacko Maree says: “The transaction is a most significant event presenting major opportunities for Africa and South Africa in particular, including substantial foreign direct investment. Standard stands to benefit from a substantial increase in its Tier 1 capital base, strong support for its international growth strategy and the potential for significant business co-operation between two complementary banks.”CASH MANAGEMENT: CITI The cash management segment of Citi’s Global Transaction Services (GTS) business continued its strong performance with September year-to-date revenues for cash management reaching $3.2bn, a 24% increase in revenues over the same period for 2006.This year has seen a number of landmark movements by Citi's cash management group, through leveraging existing corporate partnerships with strategic alliances, including the acquisition of Ecount, Inc, the provider of prepaid card solutions, to the partnership with Vodafone to launch a mobile-based international money transfer service targeting global remittances.“Increasingly our clients are looking to streamline and maximise the overall efficiency of their operations. This includes moving from paper-based processes to electronic ones, which not only cuts costs, but also provides them with richer sources of information on their day-to-day operations,” says Paul Galant, Citi’s CEO of Global Transaction Services, who believes that Citi benefits most from the research and development of vendors creating open architecture technologies which Citi can then apply to the world’s largest financial network for the overall benefit of their clients.“We have a truly terrific synergy,” he says. “The business development side of the cash management organisation and nearly all our business heads have one thing in common – they are all people that have the courage to experiment with new technologies, they are driven by innovation, and do not keep to the status quo.”The power of technology innovation has been harnessed to facilitate increased functionality around cash, liquidity and risk management products in the Cash Management business, and Citi's passion for embracing technology has allowed Citi to successfully roll out new and existing products globally.SECURITIES SERVICES: CITIInnovation has been at the heart of the strategy undertaken by Citi’s Securities and Fund Services business this year as it continued to evolve its solutions and product lines to better anticipate and meet its clients’ evolving needs.For investors, middle-office solutions such as SMA, trade flow and Middle Office Automation have been introduced and enhanced, while the bank has also advanced its information delivery and Treasury Analytics capabilities. For intermediaries, exchange-traded services are now provided, enabling brokers to leverage Citi’s infrastructure and act as local brokers in emerging markets without having to spend time or money in building their own infrastructure. Issuers have also benefited from Citi’s focus and can devise and implement complex capital markets deals with increased protection around rights of ownership, while controlling and managing cash positions.“Our approach has been to anticipate the next wave of change engulfing the industry and creating solutions that enable our clients to manage the coming change,” explains Neeraj Sahai, global head of Securities and Fund Services, Citi.As an example, Mr Sahai explains that substantial changes have been made to Citi’s Treasury Analytics product in the areas of equities reporting, impairment reporting and money market fund reporting – allowing Citi to deliver accurate and timely risk, compliance, accounting and performance analytics for the corporate treasury. “These enhancements complement our broader electronic transaction and information product suite [CitiDirect for Securities (CDS)] which provides the common front-end and common feel that clients need as they access different products and solutions across multiple geographies from Citi.”Citi has developed a flexible and innovative product suite that gives its client segments (issuers, investors and intermediaries) maximum choice, together with a broad range of solutions that spans the entire spectrum of the value chain. With these combined capabilities, clients are able to pick and choose the components of the services that are ideal for them and also expand on that flexibility as needed.CHIEF INVESTMENT OFFICER OF THE YEAR: JOSÉ MARÍA FUSTER, GLOBAL CIO, GRUPO SANTANDERSantander’s exciting year has culminated in the purchase of a 98% share in ABN AMRO along with Fortis and RBS. Coupled with this, the bank reported a 33% increase in attributable profit to €6.57bn in the first nine months of 2007.

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In line with this growth and change, José María Fuster, Grupo Santander’s global chief information officer, has been responsible for improving the base technologies that underpin the bank. “We can summarise these under the label of web-services,” he says, “and our focus is very much in changing the methodology in how to build these types of applications. The concept is no longer around applications that are being run in a single place but over the network instead.”

The bank is also allowing its applications to shift towards a more client-oriented content by embracing Web 2.0 while also focusing on security topics to enhance its customer experience. “You have to apply new concepts to create that space where the user can easily use an application without all security issues that come with that, so a lot of work has to be done to solve these issues,” says Mr Fuster.He adds that for Santander this is not just a technological issue but also a social one, and explains that banks should create a trusted space over the net in order to make people use web-based applications without having to suffer the inconvenience of security breaches and fraud. “These are very important issues and we are very much involved in them,” he says.ENVIRONMENTAL, SOCIAL AND GOVERNANCE: CRÉDIT AGRICOLEOne bank that stands out because of its success in meeting the challenge of incorporating environmental, social and governance (ESG) due diligence in all its businesses is Crédit Agricole, which wins the award this year. While all global banks have some strategy for assessing a new generation of risks such as climate change, geopolitical instability and increasing stakeholder scrutiny – all of which are having a material impact on the credit quality and value of the companies that banks finance – few have successfully integrated it into their commitment process. Crédit Agricole has a thorough and comprehensive strategy for incorporating ESG due diligence into all lending, investment and capital markets decisions. The group executive board sets ESG strategy and is supported by a group-level team and a network of operating division employees, and importantly they are supported by the group risk team. As a result, ESG due diligence is a core component of the commitment process across divisions.More significantly, this ESG risk management structure has produced outstanding results. Innovest conducted a benchmarking study which compared banks based on the ESG performance of the companies they have financed. After comparing all syndicated loans, non-broker-dealer equity positions and all debt and equity underwriting, Crédit Agricole ranked in the top quartile of the global banking sector.In sum, while most banks are still finding their feet in a new risk landscape, Crédit Agricole stands out as an established expert of ESG risk management.ENVIRONMENTAL, SOCIAL AND GOVERNANCE/ EMERGING MARKETS: UNIBANCOUnibanco wins the title of Environmental Social Governance Emerging Market Bank of the Year. More than other emerging market banks, Brazil’s Unibanco has integrated social and environmental factors into its core business strategy.Brazil is generally a leader in renewable energy, particularly biofuels, and Unibanco leads Brazil’s banks in capitalising on this opportunity. The bank’s participation in renewable energy stretches across divisions, including commercial lending and loan syndication as well as its insurance joint venture with a global leader in climate change, AIG. Unibanco’s projects have included methane capture at landfill and livestock farms, and Unibanco AIG was the first insurer in Brazil to offer environmental liability cover. The bank’s asset management division also offers investors the opportunity to reap the benefits of responsible development through a dedicated sustainability fund.Unibanco has furthermore established a joint venture with the International Finance Corporation to provide lending to micro-entrepreneurs through more than 200 locations. The microlending portfolio stood at BRL7m ($3.9m) at the end of 2006. What is perhaps more important is that the bank has maintained conservative credit underwriting standards in its broader non-corporate portfolio, at a time when lower interest rates have encouraged fast credit growth around Brazil.Unibanco’s diligence in social and environmental issues is a natural fit into its larger strategy of not sacrificing credit quality in order to remain competitive in the long term.The ESG awards were judged by Innovest Strategic Value Advisors, a research firm specialising in analysing companies' performance on environmental, social, and strategic governance issues, in association with The Banker.

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