The best banks of the past 12 months from central and eastern Europe.

 
 

Albania, Banka Kombetare Tregtare 

With a 23.9% increase in net profits and growing equity, Tier 1 capital and assets, Banka Kombetare Tregtare (BKT) is The Banker’s Bank of the Year in Albania. BKT excelled across all indicators, and thanks to growth in lending in 2015, the bank was the largest in Albania by all metrics. 

Indeed, BKT’s net profit of Lk6.27bn ($49.86m) was the bank’s all-time record, with return on equity of 19.03% also eclipsing figures from the past two years, despite the drag of falling interest rates and low margins in Albania’s banking sector.

BKT continued to lend cautiously to selected firms, sought to hold onto its corporate and commercial banking customers by meeting their needs in ways that were compatible with the bank’s lending policies and risk awareness, and also explored ways to attract new customers, paying particular attention to supplying finance to business lines with strong growth potential such as projects in agriculture and energy.

BKT works with national and international organisations to provide customers with the best services. Together with USAid, BKT extends credit to farmers under a loan guarantee programme, and also offers loans for small and medium-sized enterprises supported by the Italian-Albanian SME Development Programme and through the European Fund for South-eastern Europe.

“We plan to use state-of-the-art technology more in everything we do,” says Seyhan Pencablıgil, chief executive and board member at BKT. “We will also educate our clients to use alternative channels rather than branches. This will bring savings, which should make up for the reduced margins.”

BKT lowered its cost-to-income ratio by 7.2 percentage points to 41.8% in 2015. The bank further aims to increase branch efficiency by automation of the majority of processes and redesigning its multi-channel architecture, customer relationship management and process management systems. 

Armenia, Ameriabank

Despite an uncertain outlook for the Armenian economy, a devaluation in the local currency and instability in the broader region of the Caucasus and Middle East, Ameriabank, The Banker’s Bank of the Year in Armenia, maintained its leading position in the market. While net profits fell, Ameriabank increased assets by 29.1% and Tier 1 capital by 36.9% and still managed to lower its cost-to-income ratio by 4.1 percentage points to 42.3%.

Reacting to Armenia’s economic woes in 2015 – gross domestic product only grew by 3% compared with historically high single-digit growth – Ameriabank offered small and medium-sized enterprises (SMEs) with robust credit history the option to refinance loans over a longer payment period and decreased monthly payments. This initiative not only helped SMEs but benefited Ameriabank’s loan portfolio.

“The strategy of Ameriabank envisages market leadership in Armenia through -utilising the potential of existing and new customers,” says Artak Hanesyan, chairman of the management board and general director at Ameriabank. 

To serve its customers better, Ameriabank signed an agreement with innovative self--service and remote banking solutions software company CR2 in 2015. Together with CR2, Ameriabank is working on the adoption of its so-called BankWorld omni-channel banking platform, which will offer 24/7 banking services, unifying all Ameriabank’s remote banking channels in a single platform.

In the coming years, Ameriabank is further planning to work with selected international best practice vendors to ensure implementation of banking solutions that will support further growth of the business.

The bank will remain “opportunistic on mergers and acquisitions” as long as acquisitions help reach long-term goals as set out by its strategy, according to Mr Hanesyan. An initial public offering for Ameriabank is also still targeted.

Azerbaijan, AccessBank 

The sharp drop in oil prices and currency devaluations in Azerbaijan’s neighbouring countries triggered two major devaluations in the Azerbaijani manat and weighed on the economy in 2105. Azerbaijan’s economy expanded by 1.1% during the year, but the International Monetary Fund forecasts a 2.4% contraction for 2016. Despite all this, AccessBank remained profitable in 2015 and kept its capitalisation stable.

“AccessBank was able to absorb the impact of the devaluation by successfully deleveraging the loan portfolio and applying stringent cost-reduction measures and prudent foreign exchange management,” says Michael Hoffmann, chief executive at AccessBank. “The traditionally close relationship of the bank with its clients has proven to be critical for the bank’s success in this challenging environment.” 

AccessBank survived the currency devaluation without incurring any foreign exchange-related losses. During 2015 and the first quarter of 2016 it was taking active measures to support the sustainability of its business and mitigate the impact of the devaluation through the bank’s favourable currency position, a reduction of its loan exposure by more than 20% in 2015 and increasing its loan loss provisions by almost 35m manat ($21m) by the end of 2015.

AccessBank’s successful crisis management is reflected in its BB+ credit rating, the highest in the Azerbaijani banking sector and on the same level as the sovereign rating.

In 2015, AccessBank launched myAccess, an internet banking service which underlines the bank’s commitment to investing in modern banking solutions. 

In the light of the difficult market environment, AccessBank remains “very risk-conscious in its lending activities and expansion”, according to Mr Hoffmann. “The major focus is investing in digitalisation and e-services to further improve customer services and overall efficiency,” he adds.

Belarus, Priorbank

With strong profits and sound financials as well as innovative projects, Priorbank is The Banker’s Bank of the Year in Belarus. 

The subsidiary of Raiffeisenbank reported Rbs2166bn ($114m) in net profits in 2015, compared with Rbs769bn in the previous year, returning 39% on equity while increasing its Tier 1 capital base by 37% and assets by 31%. Loans to private individuals increased by 11%, while deposits grew by Rbs3300bn, or 54%.

“The past year was successful for Priorbank in terms of business efficiency and profitability as a consequence of the focused improvement of existing banking technologies, the introduction of new innovative products and services and a strict operational cost-cutting policy,” says Sergey Kostyuchenko, chief executive at Priorbank.

In 2015, Priorbank developed and launched Prior ClickPay, an application designed for faster payment through smartphones, tablets or the Apple Watch. It further launched voice biometrics to identify clients calling the bank, and is the first bank in Belarus to have done so. In 2016, it launched Prior-Bonus, the first distant loan for legal entities launched in Belarus. The bank also simplified the lending procedure to medium-sized clients with Business-Line Light. This product’s share in the total working capital financing loan portfolio of medium-sized clients accounted for 30%.

Priorbank has also expanded the functionalities of its internet bank for legal entities, which has seen the share of electronic documents transmitted to the bank exceed 98%. 

Priorbank focuses on non-lending products including payroll projects and the development of products that are unique and innovative in the local market, such as factoring. The bank also acts in co-operation with international financial organisations to -support its financing activities for micro, small and medium-sized enterprises as well as corporate clients. 

Bosnia-Herzegovina, Raiffeisen Bank dd Bosna i Hercegovina

As economic growth returned to levels above 3% in 2015, the banking sector in Bosnia-Herzegovina enjoyed an improved operating environment with a rise in profitability across the largest institutions. Among those, Raiffeisen Bank dd Bosna i Hercegovina stood out with solid financials and the highest returns in the market.

In 2015, Raiffeisen reported Km67m ($38m) of net profits (a 24.5% increase), returning 13.51% on its equity and 1.8% on its capital. Assets remained stable at about Km3.7bn, but Raiffeisen further reduced its cost-to-income ratio by 1.3 percentage points to 56.6% and its non-performing loan ratio by 2.5 percentage points to 8.11%.

“Our main success was understanding and fulfilling our customers’ expectations, striving to justify the trust they placed in us,” says Karlheinz Dobnigg, chief executive at Raiffeisen Bank dd Bosna i Hercegovina. “We ended the previous year with the highest bottom-line result in the bank’s history. We improved our loan portfolio, marking a strong and stable market position and upgraded the personal online banking services.”

Responding to market requirements, Raiffeisen introduced several credit initiatives in 2015 including loan products with a fixed interest rate and cashback for retail customers, as well as loans offering favourable conditions for small and medium-sized enterprise clients. For its corporate clients, Raiffeisen optimised the credit process and established a mid-market processing centre.

Raiffeisen’s market share in terms of total assets amounts to 15.8%, and to 15.6% in terms of total capital.

Raiffeisen aims to work on “deploying a strong digital capability and increasing familiarity with the new way of doing business with the bank”, according to Mr Dobnigg. “Our target is to build greater consideration of our brand and continue to be a fair partner and encourage the relations with our clients.”

Bulgaria, Raiffeisenbank (Bulgaria) EAD

Following weak economic performance since the financial crisis, 2015 was the first year since 2008 in which Bulgaria recorded growth of more than 2%. However, Raiffeisenbank (Bulgaria) EAD, a lender hit during the financial crisis, has shown sustained positive financial results for two years in a row. 

Raiffeisenbank’s turnaround story is -underlined by a 32.3% net profit increase to Lv61.6m ($34.6m) in 2015, compared with Lv46.6m in 2014 and losses of Lv43.8m in 2013, and a significant reduction in its -non-performing loan (NPL) portfolio to 10.98% (from 15.01% in 2014 and 19.77% in 2013), which is below the Bulgarian market average of 14.51%.

“After reducing our NPL ratio significantly and investing a lot in making the bank more productive and profitable in the past years, in 2015 and 2016 we reported excellent results,” says Oliver Rögl, chief executive at Raiffeisenbank (Bulgaria) EAD. “The outcome of the asset quality review and the stress tests of the Bulgarian banks also verified our sustainable business model.”

Raiffeisenbank recorded a steady increase in its share of electronic payments and reached 84% at the end of 2015. It commenced the rollout of cards with contactless technology, a process it expects to finish before 2018.

In 2015, Raiffeisenbank organised conferences for small and medium-sized enterprises (SMEs) and microbusinesses and introduced 12 microbusiness centres across the country’s biggest cities.  

Raiffeisenbank signed a risk-sharing agreement with the Bulgarian National Guarantee Fund in 2015 aimed at supporting SMEs’ access to finance, and has access to other multi-lateral guarantee lines.

Raiffeisenbank also offers a range of capital markets products such as foreign exchange spot, swaps and forwards as well as interest rate swaps, and acts as a primary dealer both on the primary and secondary market for sovereign debt.

Croatia, Société Générale Splitska banka

Banks in Croatia faced an exceptionally difficult operating environment in 2015. While the economy returned to growth (1.65%) for the first time since 2008, lenders were forced to convert retail loans provided in Swiss francs to euros at the historical exchange rate of when the loans were granted. Banks had to bear the full conversion costs totalling in some Hrk8bn ($1.18bn), which saw many of them report a loss in 2015.

The Banker’s Croatian Bank of the Year, Société Générale Splitska banka, however, still remained profitable (Hrk121m net) and even lowered its cost-to-income ratio to 52.9%.

“The professional management [of] our risks has enabled us to weather the storm,” says Yves Lallemand, chief executive and chairman of the management board at Société Générale Splitska banka. “At the same time we have engaged in a profound transformation of our processes and we have improved our service level, for instance by launching a brand new mobile offer.”

In 2015, SG Splitska banka implemented and introduced a new internet and mobile banking offering with a new business and technical platform to enable clients seamless 24/7 banking across the full spectrum of services – a big step towards transforming the business model to multichannel banking.

Within this, SG Splitska’s so-called ‘Branch 2.0’ is an alternative channel to classic branch, internet or mobile banking, seeking to establish a direct banking clientele focused exclusively on clients approaching the bank remotely. 

And going forward, the bank intends to “capitalise on the much-improved outlook of the Croatian economy”, according to Mr Lallemand, which the International Monetary Fund forecasts to grow by 1.9% in 2016 and more than 2% thereafter, while “striving to further improve our client journey by making [banking] easier and quicker”.

Czech Republic, Ceská sporitelna

Although the Czech Republic is not a member of the eurozone, banks in the country are still weighed down by ultra-low interest rates, and have been for some time. The Czech National Bank first lowered the base rate below 1% in May 2010, and has kept it at 0.05% since November 2012.

In this difficult market for bank profitability, The Banker’s Bank of the Year in the country, Ceská sporitelna, has shown resilience and intelligent positioning to grow within the market.

“We have reinforced our top position in the market in a difficult environment, even exceeding it with many other products,” says Tomas Salomon, chairman of the bank’s board. “We are number one in share fund sales and we have achieved record-breaking numbers in providing mortgages and consumer loans.”

The lender is seeking to understand -customers’ needs better than its peers and has developed several projects with this in mind. Ceská sporitelna’s My Healthy Finance venture is principally targeted at its mass-market retail clients, helping them to manage their personal finances. The project was piloted and the plan is to roll it out across the entire branch network.

The project includes changes to the layouts of its branches, new technologies, as well as ‘hall managers’ for every branch, helping walk-in clients find what they need.

“These days, availability to our clients means not only a conventional branch, but a presence in the digital world,” says Mr Salomon. “We will therefore continue developing digital technologies over the year and we will introduce new types of branches to better meet the current needs of our clients.” 

The lender further introduced new applications such as Friends 24, which allows customers to send money through different channels including Facebook and Twitter, as well as Melinda, which enables clients to donate money to charity.

Estonia, SEB Pank

As a member of the eurozone, Estonia’s banking sector and economy are reliant on the region’s ultra-low interest rates and comparably low economic growth rates. And with gross domestic product increasing by only 1.07% in 2015 in Estonia, profit generation remained challenged. 

Despite the difficulties, SEB Pank, The Banker’s Bank of the Year in Estonia, reported 2015 net profits broadly in line with 2014 and increased lending to both households and companies. SEB also saw new sales of home loans rise by 25.2% in 2015, aided by a rise in wages. “Our assessment of the changing environment helped SEB to adapt to the new situation and cope well with the challenges,” says Allan Parik, chairman of the management board at SEB Pank Estonia.

The lender is strategically pursuing growth in the core areas of large corporations and financial institutions, small and medium-sized enterprises, and savings offerings to private individuals and corporate clients.

SEB has adopted a long-term strategy reflecting changing customer behaviours, technological development, regulatory impact and competition. The bank’s emphasis on long-term relationships with customers is targeted at showing the customer that SEB acts proactively in their best interest.

“We have observed that both corporations and private individuals value SEB’s advice in their financial planning and we put strong emphasis on this area,” says Mr Parik. “We have also welcomed a number of new clients who trust SEB as their new home bank.”

Among others, SEB has developed services helping its customers save more, such as the so-called ‘Digital Coin Jar’. Since its launch, SEB customers have saved a total of Ä18m through the service.

Going forward, SEB aims to introduce further “innovative and digital solutions that will make [clients’] life easier” including tools for “convenient advisory and expertise sharing”, according to Mr Parik.

Georgia, TBC Bank

Although still an underbanked market, especially in rural areas, competition in the Georgian banking sector is increasing. The Banker’s Bank of the Year in Georgia, TBC Bank, is addressing this head on – through organic and inorganic growth.

In 2015, TBC Bank registered a 38% increase in net profits to La218m ($89.7m), returning 20.1% on its equity. Assets grew by 27.9% to La6.94bn and the lender outperformed the market in lending growth. TBC Bank completed its full merger with Bank Constanta, significantly expanding its presence in the rural regions of Georgia. The lender also started offering a full selection of its products and services through the newly rebranded TBC Bank Constanta branches.

TBC Bank has also fully integrated customer relationship management capabilities across all of its business lines, including through remote banking channels, enabling the bank to better customise its product offering to its customers. On top of this it has redesigned its branch concept and introduced a new payment solution: a mobile payment terminal working with the support of the bank’s strategic partners, Visa International and GoSwiff.

TBC Bank had listed on the London Stock Exchange in 2014 and in 2016 it moved to a premium listing. For that reason, and thanks to the successful additional acquisition of the country’s third largest lender, Bank Republic, the bank’s chief executive Vakhtang Butskhrikidze believes that “2016 is proving to be a very significant year for our bank”. 

TBC Bank sees the premium listing as a logical development based on its track record. “We continue differentiating our business, delivering superior customer experience and the best multi-channel capabilities on the market,” says Mr Butskhrikidze. “With all these factors considered, I am confident that we are in a strong position to deliver superior returns as we go forward.”

Hungary, K&H Bank

After a difficult year for the banking sector in Hungary in 2014, when lenders’ profits were hit by a bank levy as well as compensation and conversion arrangements for holders of Swiss franc-denominated mortgages, results in 2015 picked up. In a competitive banking industry, K&H Bank is The Banker’s Bank of the Year thanks to its strong fundamentals, growth strategy and innovation.

K&H, owned by the Belgian KBC Bank, returned to profit in 2015 with a net Ft37.9bn ($136m) result and a 21% increase in Tier 1 capital to Ft186m. The bank has a smart growth strategy, with the objective of continuously improving client acquisition and creating long-term relationships by deepening the bond with existing clients to be able to provide them with the right products, services or advisory at the right time.

In 2015, K&H began setting up a mortgage bank in response to regulatory changes within the country, building on and further strengthening the success of its mortgage lending business. 

The lender further introduced a new mobile banking application to make the access to banking services more convenient. It also serves as a mobile token authentication tool for its internet banking offering to provide more security.

The bank launched product calculators on its website, allowing clients to find the best credit solutions for themselves and immediately start the credit application process, significantly increasing the bank’s share both in housing and cash loan products.

“K&H continued its strong growth in retail and small and medium-sized enterprise (SME) lending,” says Hendrik Scheerlinck, chief executive at K&H Bank. “We are the first bank to offer the Cosme EU guarantee programme of the European Investment Fund to our SME customers. On the corporate banking side we expanded our strategic advice with strong attention to agricultural and family-owned businesses.”

Kosovo, TEB 

Kosovo’s economy has shown significant progress in maintaining macroeconomic stability. In 2015, the economy grew by nearly 4%, with similar levels forecast for 2016, according to the International Monetary Fund. 

TEB’s sound financial performance, with an 87.2% growth in net profits, a 47.2% increase in Tier 1 capital and an 11.2% rise in assets, as well as its approach to innovation and its focus on supporting economic growth through tailored banking products and services across customers, makes it The Banker’s Bank of the Year for Kosovo.

“TEB has provided the commercial banking support that is a key driver in the roadmap to future economic growth in Kosovo,” says Ayhan Albeyoglu, managing director at TEB. “We have also reinforced our strong focus on supporting TEB’s many small and medium-sized enterprise [SME] customers as they play an increasingly important role in the economic development process.” 

He adds that the bank is a crucial player in the creation of an entrepreneurial spirit in business in Kosovo through its financial and non-financial services.

TEB, which is 50% owned by France’s BNP Paribas, engages with several international investments and guarantee funds to support lending to micro and SME clients in Kosovo, while also promoting and supporting the development of female entrepreneurs.

The bank launched its Business Academy concept, offering training and consultation for clients on a regular basis. The events are focused on growth strategies, best practices and management insights. The lender has also focused on innovation by launching TebMobile, which delivers an enhanced customer experience through easier access to basic services and interfaces as well as offering enhanced efficiency of TEB’s services.

TEB was also the first bank in Kosovo to implement the option for clients to pay back their credit card debts through cash deposits at ATMs.

Latvia, SEB Latvia

With challenges of low interest rates and low corporate activity, Latvian banks have needed to go the extra mile to woo customers in the past year. In this environment, SEB Latvia performed well thanks to the introduction of new innovations and efforts to strengthen customer relations, and is The Banker’s Bank of the Year in Latvia.

Net profits increased by 51% in 2015 to €35.05m, returning nearly 8% on equity and lowering the cost-to-income ratio by 5.44 percentage points to 48.17%.

“We have acted proactively, not only advising clients on a daily basis and providing the necessary financial services, but we have also improved our processes, developed a number of digital solutions and implemented new services [for] our customers, for instance, online chat for housing and consumer loans, and digital application and signing for student and consumer loans,” says Ieva Tetere, CEO of SEB in Latvia.

To strengthen its relations with customers, SEB encourages clients to innovate at its Innovation Lab event for small and medium-sized enterprises, aiming to inspire them to look for a new approach to their businesses, while the Baltic Business Summit for corporate customers sought to focus on the digital industrial revolution and how it is pushing companies to change their business models.

Across clients, SEB further launched InfoHub in 2015, a portal delivering finance-related news to clients in an easy-to-understand manner. 

SEB Latvia has also embarked on a mission to introduce a back-office IT system, which it plans to launch in the first half of 2017. The so-called Core system contains a modern software platform which comes with new features, while providing significant improvements in terms of cost efficiency, the bank’s flexibility to tailor its services according to client needs, and the development of new products.

Lithuania, iauliu Bankas

Having joined the eurozone in January 2015, for the first year Lithuania’s banks were faced with the same low interest rate struggles as lenders in the remainder of the currency union. But despite the difficult operating environment, iauliu Bankas, The Banker’s Bank of the Year in Lithuania, doubled its profitability. Net profits increased by €12m to €23.8m in 2015, boosting return on equity to 18.95%, while Tier 1 capital and assets at iauliu also rose by 29% and 3%, respectively.

iauliu’s good results were due to its strengthened position in the financing market for small and medium-sized enterprises (SMEs) and active lending to this client base, as well as a focus on efficiency and customer service quality. The bank actively participates in the multi-apartment housing renovation programme in Lithuania, involving SMEs as project administrators and construction contractors in the regions. 

iauliu introduced Business Expresso, a set of meetings with its corporate clients. During these, entrepreneurs are given the opportunity to share their business insights and receive free professional advice from the bank’s specialists across various fields. 

In 2015 the lender focused on improvements to the user interface of its online banking system, SB Linija. It enhanced its investment service offering in 2016 through a newly launched platform accessible through SB Linija, which allows convenient trading in securities in the Baltic markets.

iauliu acquired both the bank and brokerage firm Finasta AB in 2015, allowing the lender to diversifying its income base and creating additional value for the bank’s clients. The acquisition significantly enhances iauliu’s potential and competitiveness as it deepens its offering in investment, securities trading and brokerage services.

Within five months of the acquisition, iauliu took over Finasta AB’s assets, rights and liabilities and successfully completed the reorganisation.

Macedonia, Ohridska Banka Société Générale

Ohridska Banka Société Générale (OBSG) posted strong financial results across the board in 2015 and introduced innovative products such as improved online banking capabilities for both retail and corporate customers, making it The Banker’s Bank of the Year in Macedonia. OBSG boosted its net profits by 72% in 2015 to reach 16.5% return on equity, while also raising Tier 1 capital (29.8%) and assets (3.7%).

“2015 was a year of contrasts, a challenging and sometimes difficult year, but one that was the most successful for [OBSG],” says Branka Pavlovic, president of the bank’s management board. “We can be proud of a year that demonstrated a solid commercial dynamic across virtually all of our businesses and the successful launch of new projects.”

The bank’s positive results were based on the growth of commercial activities in all business segments and organisational aspects, showing that OBSG is on track to implement its 2015-18 goals and fulfil its growth potential. OBSG is also the first licensed banc-assurer on the Macedonian market, offering clients a range of insurance products – a profitable commission-based business.

The bank has also further improved its online banking platform with a new interface, including enhanced security and an innovative personalised finance management tool. On top of this, the lender is one of the first in Macedonia to offer enterprise resource planning integration with the bank’s internet banking, which saves clients time and money through the option of automatically uploading orders and booking received payments.

The bank remains focused on client needs, according to Ms Pavlovic, by providing them with “innovative and favourable products and services”. “Our future is driven by digital transformation as the new technologies, new client behaviours and new entrants open new chapters in establishing the bank of tomorrow,” she says.

Montenegro, Erste Bank AD Podgorica 

While Montenegro’s gross domestic product rose by more than 3% in 2015, the country’s banks were still operating in an environment of rising public debt levels. Despite this, Erste Bank AD Podgorica posted strong financial results, including a 9.3% in net profit to €6.53m.

Erste Bank also boosted its capitalisation to €41m, an 18.5% increase on the previous year, and lowered its non-performing loans to 7.27%.

“Although we are predominantly focused on the retail business, last year we significantly strengthened the partnership support we provide to the broader Montenegrin economy and recorded significant growth in the overall volume of loans,” says the bank’s chief executive, Aleksa Lukic. 

“Our performance indicators stood very strong.”

Erste Bank has also launched its internet banking service NetBanking, which includes unique features such as higher security and the possibility to conduct international transactions, and was the first bank in the country to introduce online account applications for retail customers.

The lender also introduced short- and medium-term loans with lower interest rates and maturities than its competitors.

Erste Bank prioritises services for small and medium-sized enterprises (SME) and holds one-quarter of the Montenegrin market share. It has dedicated SME advisers, who focus on establishing long-term ties with clients through adequate support, advisory and pricing policy. Erste further seeks to help create synergy between its clients where possible.

This strong market position allows Erste to have a good understanding of the market, and it aims to focus further on strengthening relationships with clients in the private and corporate sector, expanding the availability of credit products and applying innovative solutions.

Poland, PKO Bank Polski

Poland’s banks have faced serious challenges over the past couple of years. The industry has had to not only adjust to the low interest rates and regulatory pressures which most European banks are facing, but in 2015 lenders also bore the costs of Poland’s first banking sector bankruptcy in 15 years. Despite all that, PKO Bank Polski performed well through its market-leading innovation, sound financials and a willingness to adapt to global challenges to be The Banker’s Bank of the Year in Poland. 

“The bank has been deeply involved in strengthening the Polish economy and supporting the international presence of local companies as well as digital transformation,” says Zbigniew Jagieo, chief executive at PKO Bank Polski. “Our activities have comprised opening international corporate branches as well as building stronger relationships with partner banks in markets far away.”

In 2015, PKO successfully finished the integration of Nordea Bank Polska into its group, reaping cost synergies of 153m zlotys ($39m) in 2015, largely from an integration of IT areas and support functions. Synergies for 2016 are estimated at 220m zlotys.

PKO launched PKO Bank Hipoteczny, allowing it to enter the covered bond market in 2015. The bank ran a pilot issue of covered bonds worth 30m zlotys (five-year maturity) at the end of 2015 and sold its first benchmark issue in April 2016.

As customers change their habits in using banking services, banks have to adjust their strategic approaches to create value for customers “that goes beyond simple product delivery”, according to Mr Jagieo. 

PKO has created the Polish payment standard BLIK, which has since been shared across some of Poland’s largest banks, -reaching more than 1.6 million customers, while the lender has also introduced contactless payments and is working on biometric technologies.

Romania, Raiffeisen Bank 

In a country with historically high levels of Swiss franc-denominated lending, the appreciation of the Swiss currency was felt widely across Romania. Throughout 2015 and 2016, the public debate on long-term lending to private individuals polarised Romanian society, and legislators initiated several draft laws aimed at reducing the customers’ burden, while having a significant impact on the banking system.

In this environment, Raiffeisen Bank intensified its Swiss franc loan restructuring measures to support its customers’ reimbursement ability and reported another set of sound financial results. “In 2015, Raiffeisen Bank granted E2bn in new loans to corporate and private individuals, thus continuing to finance the economy,” says Steven van Groningen, chief executive at Raiffeisen Bank in Romania. “Simultaneously, in a low interest rate environment, the bank continued to improve its commercial offer to encourage medium- and long-term savings.”

Through its targeted long-term savings push, the bank’s saving accounts balance grew by more than 25% in 2015.

Raiffeisen Bank focused on its digital banking strategy by enhancing the capabilities of its electronic channels. It also started work on mobile applications such as host card emulation, QR codes and mobile tokens, which will be available in the near future.

Raiffeisen Bank customers have been able to obtain a loan for personal needs almost immediately without the need to provide a payslip since 2015, thanks to an agreement with the National Agency of Fiscal Administration. Due to this arrangement, and with the customer’s permission, the bank can check the fiscal authority’s records online.

“Raiffeisen Bank will continue to invest in technology and in better serving its -customers via electronic channels,” says Mr van Groningen. 

“Digitisation and adjusting legislation to technological advancement will remain the focus for the following years.”

Russia, Sberbank

Following the largest contraction in the Russian economy since 2009 in 2015 (-3.73%), gross domestic product is still expected to be negative at -0.76% in 2016, according to the International Monetary Fund (IMF), continuing to put pressure on bank profitability. This, coupled with tightened regulatory requirements and a higher level of credit risk, required lenders to be resilient and disciplined with regards to expense management, something Sberbank showed.

“It was a positive year for Sberbank,” says Herman Gref, the bank’s chief executive. “We successfully overcame all challenges and brought our credit quality under control. Other key accomplishments included maintaining profitability throughout the cycle – not a single negative month was recorded – and keeping costs at an optimal level despite the hike in inflation.” 

While profits contracted in 2015, Sberbank still returned 10.2% on equity on net profits of Rbs222.9bn ($3.5bn) while keeping its cost-to-income ratio stable at 43.6%, despite Russia’s high inflation level (an -average of 15.5% in 2015 according to the IMF), by keeping the growth of expenses significantly lower than the average annual -inflation rate.

In 2015, Sberbank decreased its reliance on state funding from 16% of its liabilities to 1% by repaying almost Rbs3bn of funds to the Central Bank of Russia and the federal treasury. Sberbank also introduced the so-called My Team for small and medium-sized enterprises, of which it holds a 53% market share, offering an integrated package of services including those of a business assistant, a lawyer and an accountant along with unlimited settlement and cash services for the client.

“We see good opportunities in offering non-banking financial services such as insurance and asset management,” says Mr Gref. “We plan to continue controlling costs for existing operations and push forward with digitalisation.”

Serbia, UniCredit Bank Serbia 

In 2015, Serbia’s banking sector continued to suffer from the aftershocks of 2014’s 1.8% contraction in the national economy. While the economy picked up by 0.7% over the year, demand for credit in the corporate sector was still sluggish and credit quality became a key issue.

Despite the difficult environment, UniCredit Bank Serbia further cemented its position among the top three banks in the market and recorded one of its most successful financial years, making it The Banker’s Bank of the Year in Serbia.

According to Csilla Ihasz, chief executive and president of the management board of UniCredit Bank Serbia, one of the biggest challenges in the past year was “coping with the rising level of non-performing loans (NPLs) in Serbia”. 

“Nevertheless, due to our strong risk management and broad set of internal measures, followed by rising quality of services and increase in customer satisfaction, we managed not only to achieve excellent results, but also to keep our NPL level under control and below market average,” she says.

UniCredit increased net profits and assets by 16% each, and boosted Tier 1 capital by 14% in 2015, while NPLs edged 2.9 percentage points higher to 16%. 

“Our key success factors were growth in commercial business, an increase in processes efficiency and customer satisfaction, sound risk management and a focus on customer acquisition,” says Ms Ihasz.

The lender’s client base increased by 15% in 2015, driven by new customers across both the corporate and retail segments. UniCredit was further granted the exclusive right to process student loans and scholarships by the government. 

UniCredit puts an emphasis on small and medium-sized enterprises, offering favourable loans supported by government initiatives as well as the European Investment Fund’s risk-sharing programme.

Slovakia, Tatra banka

With an ambitious growth strategy, innovation and solid financials, Tatra banka is The Banker’s Bank of the Year in Slovakia. 

The subsidiary of Austria’s Raiffeisenbank increased net profits by 11.2% to E115.8m in 2015, while assets also rose by 13.8%. Loans provided to clients, which increased by 13.1% to E8.14bn, made a significant contribution to this growth. Client deposits increased in all segments served by Tatra banka to a total of E8.72bn (up 18.8%).

To further boost growth, Tatra banka adopted Strategy 2020, which aims to elevate the lender to be among the top two banks in every customer segment it serves within Slovakia. During 2015, it was already able to leverage its 22% market share in corporate banking and private banking, where funds exceeded E2bn.

Within its private banking operations, Tatra banka focused on innovations concerning risk monitoring and new investment tools for clients in 2015. It introduced portfolio stress testing for its clients, to protect them from increased volatility.

In 2015, Tatra banka further developed its relationship management capabilities through remote personal bankers. As of 2016, 53 relationship managers have been at the bank’s contact centre – Dialog Live – to provide a full service to Tatra banka’s premium clients.

With a view to expanding the bank in the long term, Tatra banka has started to focus on acquiring student clients, the success of which can already be seen in the more than 16,000 student accounts that have been opened with the lender.

In the future, Tatra banka is seeking to reinforce its position among affluent clients, according to Michal Liday, chief executive at Tatra banka. “At the same time, in line with our brand promise to be the leader in innovation in 2017, we aim to introduce a number of useful new products designed to make clients’ lives easier,” he adds.

Slovenia, SKB banka, dd, Ljubljana

Despite an improving economic environment with gradually falling unemployment, banks in Slovenia, as in other parts of the eurozone, have been faced with ultra-low interest rates. On top of this they have suffered from a decrease in outstanding loans due to a decline in demand from corporate clients and early repayments, putting pressure on banks’ margins. Against the backdrop of a 5.5% contraction in the loan market across the country in 2015, The Banker’s Bank of the Year in Slovenia, SKB Bank, dd, Ljubljana, managed to increase its market share in loans by 50 basis points.

“SKB Bank has continued to attract new clients and to increase its market shares, making it possible to stabilise the net banking income almost at the level of the previous year while the industry faced a significant drop in its turnover,” says François Turcot, chief executive officer at SKB Bank.

SKB, a subsidiary of France’s Société Générale, broadly reported stable net profits of E34.3m and Tier 1 capital of E281.9m in 2015, and lowered its non-performing loan portfolio by 3.9 percentage points to 15.1%.

To encourage legal entities’ credit appetite, the bank offered financing options in co-operation with the Slovenian Enterprise Fund, as well as the European Investment Bank, while loans to individuals received a boost thanks to SKB’s offerings such as favourable seasonal and housing loans, including some with fixed interest.

SKB not only increased its loan book, it also saw its market share in deposits rise by 40 basis points to 8%. 

In the coming year, SKB is working on introducing further digital advances, including a new mobile banking solution and upgraded e-banking capacities, according to Mr Turcot. “Digital banking is an opportunity that cannot be ignored, even if getting there – integrating and connecting digital and physical channels within new operating models – is not easy,” he says. 

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