The best banks in 2017 from western Europe.

                                         

Andorra, Crèdit Andorrà

In a country where banking is heavily skewed to wealth management and private banking, Andorra is being affected by moves to increase international transparency. 

The country, which has long been popular as a private banking destination, has opened up and committed itself to the automatic exchange of financial account information in tax matters with the EU – steps that have an impact upon banks’ profitability.

Still, the country’s largest bank by capitalisation, Crèdit Andorrà, kept its returns high in 2016, with a return on equity of 11.12% and net profits of €65.04m. 

“The private banking industry worldwide – and specifically in Andorra – is undergoing deep changes, mainly regarding European standardisation and increasing transparency,” says Josep Peralba, chief executive at Crèdit Andorrà. 

“Crèdit Andorrà anticipated and pre-empted this new situation and has been able to minimise the impact and stabilise its volumes and net profits [by] boosting [our operations] in Europe and the US, together with a strong emphasis on local private banking in Andorra during a particularly complicated time.”

Crèdit Andorrà, like most of its peers, has expanded into new jurisdictions – Mexico, Panama, Peru, Spain and Portugal, among others – but has kept a balanced approach towards international expansion and remains the largest lender to the local Andorran economy.

According to Mr Peralba, Crèdit Andorrà works to provide its clients with the best wealth management solutions, both personalised and through digital innovations. 

“Our key pillars are good governance and responsibility, focusing our management on continuously improving the quality of our services and, through this, contributing to the dynamism of Andorra’s economy,” he says.

Austria, Bawag Group

Continued strong financial results as well as a drive to simplify processes and increase efficiency across the group make Bawag Group the Bank of the Year in Austria. Bawag Group reported an increase in profitability of more than 22% in 2016 and return on equity of 15.9%, despite operating in the eurozone’s ultra-low-interest-rate environment.  

The lender’s 2016 finances performed well across the board, with double-digit increases in both capitalisation and assets, as well as further reductions in costs and non-performing loan ratios (to healthy levels of 44.4% and 2%, respectively).

“In the past year, we continued to maintain our low-risk strategy focused on the Dach region [Germany, Austria and Switzerland] with Austria as our foundation, while providing our customers with simple, transparent and best-in-class products and services,” says Anas Abuzaakouk, chief executive of Bawag Group. 

Within the Dach region, the lender is considering both organic and inorganic growth options. In December 2016, Bawag Group closed the acquisitions of Start:bausparkasse and Immo-Bank, additions that should grow the bank’s domestic retail footprint and extend its expertise in building society savings and loans. It is hoped that the acquisitions will also result in a significant increase in the bank’s financing volume, with regards to real estate companies and social housing associations. In Germany, Bawag Group has also announced the takeover of Stuttgart-headquartered Südwestbank, offering a foundation for growth in the German market.

“Over the coming quarters we will continue to enhance our overall services, advisory quality and customer experience by continuously focusing on simplification and digitalisation,” says Mr Abuzaakouk. 

In October 2017, Bawag Group listed on the Vienna Stock Exchange, with a valuation of €4.8bn. 

Belgium, BNP Paribas Fortis

A solid financial performance despite low interest rates and a drive to invest in further digitalisation make BNP Paribas Fortis our Bank of the Year in Belgium. BNP’s net profits increased by 9.7% in 2016, with capitalisation and assets also on the rise.

In December 2016, BNP Paribas Fortis acquired auto leasing and vehicle fleet management business Arval. With operations in 28 countries, Arval has growth potential in both mature and developing markets, enabling BNP to diversify its risk profile and boost its profitability by financing some of Arval’s 1 million leased vehicles.

The bank further entered into a co-operation agreement with SIX Payment Services, offering merchants of all sizes in Belgium high-quality services and payment terminals, independent from their current provider.

BNP Paribas also put an emphasis on investing in digital innovations. In March 2017, BNP Paribas became the first Belgian bank to offer clients Android Pay contactless payments through Visa and MasterCard. The payment services are available to BNP Paribas Fortis’s Hello bank! and to Fintro clients.

Overall, customers have increased their usage of digital channels such as BNP Paribas Fortis’s Easy Banking app and website by 25%, while active users of its mobile banking services increased by 36% – the number of sessions per month increased by 57%.

“Digitisation is clearly an opportunity. We will further invest to adapt our product and service offering and bring it in line with what our clients want,” says Max Jadot, chief executive at BNP Paribas Fortis. “We also want to streamline our way of working into an integrated and pragmatic approach based on four development themes – circular economy, decarbonisation, smart cities and human capital – in order to reach the sustainable development goals we have set for ourselves.”

Denmark, Nordea Bank

A strengthening in Denmark’s economic growth in the past few years has continued in 2016 and 2017, with International Monetary Fund forecasts 1.7% and 1.9% growth, respectively. Still, the Danish National Bank has kept interest rates low, and increasing regulatory requirements in the country have added some pressure. But despite that, Nordea Bank Denmark recorded another increase in profitability in 2016. 

Nordea’s net profits were up 3.1% to €3.8bn, with return on equity of 12.3%. Its Tier 1 capital in Denmark was also higher at €27.6bn.

Digitisation is one of the main drivers for change in banking and Nordea is at the forefront of providing customers with digital innovations. In 2016, Nordea started its 2016-2018 transformational change agenda to generate a truly digital bank. Transition activities include a shift from physical to digital distribution and the establishment of e-branches, which means that many traditionally branch-based services are now available 24/7 through Nordea’s mobile banking services, while advisory meetings are also increasingly being held remotely.

Nordea is increasingly working with start-ups and in October 2016 joined a partnership to offer MobilePay in Denmark, giving customers access to a user-friendly mobile payment solution, while other innovations include the launch of the Nordea Trade Portal, which helps give practical advice to all customers planning to expand to new markets.

The largest lender in the Nordics changed its operating model in 2017, which saw all assets and liabilities of its Danish, Finnish and Norwegian businesses merged and transferred into the Swedish group in January 2017, in an effort to simplify the group structure, its funding and liquidity management and to reduce complexity across the group. The banking group has since announced it is moving its headquarters to Finland.

Finland, OP Financial Group

Finnish banks have been facing similar challenges to other eurozone countries, namely low interest rates, increasing regulatory requirements and changing customer behaviour. In this environment, OP Financial Group has reported solid financials for the second year in a row. Net profits increased by 7% in 2016 to €915m, while assets and Tier 1 capital were also higher. In this period, the performances at some of its peers worsened. 

“In a relatively modest business environment we have achieved nearly all-time high profits and solid growth,” says Reijo Karhinen, president and chief executive at OP Financial Group. “Moreover, in line with our strategy of introducing new customer-centric business models with financial services at the core, we have launched numerous innovative services in the areas of mobility, merchant and e-commerce services, and health and wellbeing.”

To fully achieve the new business model, OP is looking to invest €2bn over a five-year period. 

Despite the investments, OP aims to keep its costs stable: expenses in 2019 should be below those of 2015 (OP’s cost-to-income ratio was 53% in 2015 and 52% in 2016). To reach these targets, the bank plans annual cost savings of €300m by 2019.

OP has a strong position among consumer mobile apps and in the past 15 months has added additional features such as phone number-linked peer-to-peer money transfers to its Pivo mobile wallet app.

Mr Karhinen notes that OP will continue to expand its customer-centric business model, introduce fully digital propositions in banking, wealth management and insurance, simplify processes, embrace open banking and invest in artificial intelligence. “Underpinning all of this will be a unique and comprehensive initiative for aligning our employees’ skills and competencies with our vision and managing the business transformation responsibly,” he says.

France, BNP Paribas

Solid financial results despite the challenge of low interest rates and further regulatory costs make BNP Paribas our Bank of the Year in France. The largest French bank by assets reported a 15% increase in net profits in 2016 to €7.7bn, resulting in a one percentage point pick-up in return on equity to 9.3%.

Non-performing loans, excluding repos, have also further decreased to 3.8% in 2016 from 4% a year earlier, while the coverage ratio remains near 90%. 

Despite challenges in the French retail market, BNP Paribas saw an increase in net interest income, driven by a 7% increase in loan volumes on the year. The lender grew its loan portfolio faster than the market, having regained market share after previously reducing its mortgage lending in France, when fixed rates started to fall.

Among lending to French companies, BNP Paribas reached a market share of about 20%, having granted nearly €50bn in loans.

Within its asset management division, BNP Paribas’s mutual funds recorded an uptick in assets under management in 2016 and solid growth in its life insurance business, outpacing peers – all supporting profitability.

BNP Paribas also offers digital innovations for its French customers, such as the ‘BuyMyHome’ app, which enables customers to take out a mortgage online. 

In 2016, BNP Paribas merged its mobile payments app ‘Wa!’ with Fivory, Crédit Mutuel’s mobile payment solution. 

The merger creates a joint e-wallet app, which allows consumers to pay for purchases at major retail chains such as Carrefour, Auchan and Total, and benefit from retailers’ loyalty programmes, coupons and discounts. 

Going forward, the bank is focusing on its 2017 to 2020 growth plan on corporate social responsibility and digital innovation.

Germany, HypoVereinsbank

Germany is a notoriously difficult market for the banking sector, due to the high number of financial institutions and low eurozone interest rates. But a recovering economy with growth of 1.86% in 2016 and a forecast rate of 2.05% for 2017, according to the International Monetary Fund, bodes well for HypoVereinsbank (HVB).

“We took the challenging conditions for the banking sector as an opportunity to further increase our focus on our customers’ needs and strengthen our market position,” says Dr Theodor Weimer, country chairman for Germany at UniCredit Group, of which HVB is a subsidiary. “We focus on growth and customer retention and are perfectly positioned to increase our market share.”

HVB is working through the ‘Transform 2019’ strategic programme, which will give HVB’s teams more client-facing time and will allow for better services for customers and cost reduction.

HVB saw a reduction in non-performing loans from 4.07% in 2015 to 3.25% in 2016, according to The Banker Database, and results for the first six months of 2017 indicate broader improvement. HVB’s pre-tax profits for the first half of 2017 were €933m, compared with €568m in the same period in 2016.

HVB is a leading bank for corporate clients, offering tailored digital solutions such as the UC eBanking global app. This enables entrepreneurs to perform their payments and cash management via mobile devices, while also still offering personal advisory on-site.

To help service underbanked segments of society, HVB offers products and services such as Braille-embossed debit cards for visually impaired customers and a cash home delivery service for those unable to come to a branch. In 2016, HVB introduced a bank account for immigrants, with the aim of helping to integrate them into society.

Iceland, Íslandsbanki

A strong drive to develop innovative products and services and continuing high market shares in the domestic retail market make Íslandsbanki our Bank of the Year in Iceland.

“With increasing competition from market participants, especially domestic funds, our response has been to simplify, in terms of both our own operational efficiency and streamlining our customers’ experience through digitisation,” says Íslandsbanki’s chief executive, Birna Einarsdóttir. Íslandsbanki puts a strong emphasis on digital innovation, recognising that by streamlining and modernising the IT infrastructure, development and operational costs will be reduced in the long run. 

In December 2016, the lender moved to its new headquarters, consolidating all operations under one roof and reducing its space requirements by more than 40%.

Among Íslandsbanki’s customers, digital channels have become the preferred service medium, allowing the lender to reduce its branches from 17 to 14. Íslandsbanki now only operates about 17% of all bank branches in the country but nevertheless holds domestic market shares in lending and deposit taking of about 30%.

Growing its digital footprint, Íslandsbanki launched its mobile payment platform, Kass, in early 2016, allowing users, irrespective of their primary bank, to send, request and accept payments through a phone number or username. A new feature allows users to create events allowing for mobile crowdfunding.

Through co-operation with start-ups and fintech companies, Íslandsbanki has further been able to implement new product developments faster, such as the screen-sharing app by CrankWheel.

Íslandsbanki has a stable liquidity position, high capital ratios and has continuously been improving its asset quality, and has repaid the bank’s legacy funding in relation to Glitnir in 2016. 

Italy, Intesa Sanpaolo

The Italian economy is slowly recovering, but Intesa Sanpaolo again reported strong financial results in 2016. Net profits increased by 13.6% to €3.1bn, resulting in return on equity of 6.4%. 

Much of Intesa’s financial success is due to the bank’s focus on growth in the areas of asset management, private banking and insurance. More than 50% of its gross profit is generated by the wealth management business.

“We reached the end of our four-year business plan in 2017, meeting or exceeding all of our targets,” says chief executive Carlo Messina. “Prime among these was the goal of paying €10bn in cash dividends.”

Still, Intesa continued support Italy’s real economy and provided some Ä48bn of medium- and long-term credits to Italian households and businesses in 2016 (up 16% compared with 2015).

In its retail banking segment, Intesa Sanpaolo’s ‘Banca 5’ business model, which was introduced in about 70% of branches, offers a range of products for smaller retail clients, which increased Intesa’s revenue per client from €70 in 2013 to €119 in 2016.

With weak credit quality being one of the largest challenges within the Italian banking sector, non-performing loans (NPLs) at Intesa further reduced by more than one percentage point to 8.2%. Nevertheless, Intesa continued to provision in a very conservative way.

In 2017, Intesa took over the good assets and liabilities of ailing regional banks Banca Popolare di Vicenza and Veneto Banca, further reducing Intesa’s NPL ratio. 

“The Italian banking system faced great uncertainty this year,” says Mr Messina, adding that Intesa played “a leading role in stabilising the system”. Intesa will present its new business plan in February and aims to keep a focus on “rewarding shareholders and capital strength” going forward.

Liechtenstein, LGT Group

LGT Group is Bank of the Year in Liechtenstein after another year of good financial results and strong growth.

At the end of 2016, LGT had some SFr152bn ($153.9bn) of assets under management, compared with SFr129bn at year-end 2015 and SFr181bn as of the end of June 2017. Total assets, which increased by 4% to SFr35.8bn in 2016, again increased within the first half of 2017, to SFr40.4bn.

In the past 12 months, LGT has succeeded in substantially expanding its business, strengthening its market position and increasing profitability, according to Thomas Piske, chief executive for private banking at LGT Group. “At the same time, we have broadened our range of products and services for private and institutional clients, systematically implemented the regulatory requirements and increased the group’s focus on sustainability,” he says.

LGT has over 3000 employees in more than 20 locations in Europe, Asia, the US and the Middle East. To further extend its international footprint, in 2016 LGT grew organically and through several acquisitions. 

The bank took over a majority stake in Vestra Wealth, a London-based wealth manager with £5.6bn ($7.38bn) in managed assets. With this transaction, LGT gained a significant foothold in the British market. At the end of 2016, LGT acquired ABN Amro’s private banking business in Asia and the Middle East (Hong Kong, Singapore and Dubai), increasing its assets under management in Asia to about $50bn as of the end of April 2017.

To enhance its internal system, LGT has developed Eden, a new process and technology platform, to seamlessly integrate its core banking system in light of increasing regulatory complexity. 

While the average age of LGT’s customers is about 50 years old or older, LGT is taking major steps to enhance the digital client experience without compromising on personal advice. 

Luxembourg, Banque Internationale à Luxembourg 

With innovative customer offerings and digital solutions. Banque Internationale à Luxembourg (BIL) is Bank of the Year in Luxembourg. Despite increasing competition from new lenders and continued low interest rates, the oldest private banking group in Luxembourg kept its return on equity high at 13.8% in 2016.

“As part of our global market approach, we modernised our business structure and enhanced our innovative, digital solutions to make our services more efficient and improve BIL’s overall competitiveness,” says chief executive Hugues Delcourt. “In Luxembourg, we reviewed our value proposition to ensure maximum convenience for clients and to offer them more tailored services.”

To best service its clients, BIL is partnering with fintechs such as Nexvia, with which BIL launched myHome in 2016. The website helps customers make decisions when considering buying or renting property, including tools to give customers a clearer understanding of the most suitable property for them. BIL is also looking at working with fintechs to improving the client on-boarding journey. 

BIL is streamlining its international presence by focusing on key markets, and selling its small franchise in Belgium while closing its operations in Singapore. It is, however, increasing its presence in Switzerland (through the acquisition of KBL Switzerland in late 2015 and Avaloq solution IT business in February 2016) as well as in Dubai and the Nordic countries.

In 2017, BIL reviewed its 2020 strategy first launched in 2015, aiming to increase efficiency, strengthen BIL’s commercial position and increase revenue by providing relevant and adapted value propositions to its clientele, with a strong emphasis on innovation and technology.

“We aim to make BIL future-proof from an IT perspective with a new core banking system and a clear digital strategy to support our commercial strategy,” says Mr Delcourt.

Malta, HSBC Bank Malta 

Thanks to its solid financials and commitment to business and service improvements, HSBC Bank Malta is the country’s Bank of the Year. Malta’s second largest bank reported a strong 36.4% increase in net profits to Ä40.2m in 2016, with a return on equity 8.5%. 

The bank’s revenue growth followed HSBC Bank Malta’s efforts to improve customer propositions to win market share in key areas. For example, following customer feedback, HSBC Bank Malta re-launched its With Profits insurance proposition, delivering €10m in premiums in five months.

Cost management is another key area of progress, with €1.1m of cost savings in 2016 and further reduction expected in 2017. Total costs were reduced on a cash basis year on year by 4%.

In 2016, HSBC Bank Malta launched a new strategy to ‘Become the Bank of Choice’, aiming to drive growth, improve operational efficiency and raise compliance standards. 

The bank further launched the internal programme ‘Fix it Now’ to drive improvement in the culture and efficiency of the bank. This helped the bank free up capacity from its back office to increase front-office capacity to support its customers. The programme to empower a culture of bottom-up change enabled more than 80 changes within the business in the first 12 months alone, releasing some 42,000 hours of previously lost productivity. 

HSBC Bank Malta’s approach to social media demonstrates the bank’s commitment to openness and customer service with a team providing rapid responses to questions and concerns. Within six months of launching HSBC Bank Malta’s Facebook and YouTube channels, the bank’s Facebook page became the most ‘liked’ among financial institutions in Malta. HSBC uses Facebook in a variety of ways, for example to post job adverts.

The Netherlands, ING Bank

ING Bank has again underlined its market leading position in the Netherlands with innovative digital solutions and business transformations improving efficiency.

In 2016, ING announced an acceleration of its Think Forward strategy, aimed at responding to changing customer needs. One of the key areas is the building of services for increasingly digital and self-directed customers. To fulfil this promise, in 2016 ING announced the investment of €800m in continued digital transformation. One of the areas of focus is the launching of customer-friendly technologies and tools that make financial planning and decision making easier. In the Netherlands, the ‘Kijk Vooruit’ financial planning tool is a case in point.

Globally, ING partners with more than 90 start-up fintech companies dedicated to creating innovative solutions for banking needs, through its Innovation Studio in the Netherlands among other hubs. In 2017, ING announced additional plans for a €300m fund to invest in start-ups and companies that have already gained some market traction.

ING is also further along in the process of building one combined banking platform for its Dutch and Belgian operations, which will enable the bank to use advantages of scale while being able to make cost savings. Once implemented, the unique banking ecosystem will be open to third-party apps.

The bank’s results for the first nine months of 2017 showed that especially “in the Netherlands, cost savings from earlier transformation efforts are coming through”, according to Ralph Hamers, the chief executive of ING Group. 

Retail banking profits in the first nine months of 2017 increased by 43.6% on the same period in 2016 to €1.7bn, and wholesale banking by 42.3% to €555m, making the total underlying result before tax 43.3% higher at €2.28bn. ING also managed to reduce its cost-to-income ratio by more than nine percentage points to 48.3%.

Norway, Nordea Bank

At a challenging time for the Norwegian economy due to the persistently low oil price, Nordea Bank has proven its reliability with a solid financial performance and the introduction of innovative services. 

The largest banking group in the Nordics has been at the forefront of handling the effects of the lower oil price, “helping customers turn their business around”, according to Snorre Storset, country senior executive, Norway, at Nordea. “Nordea has delivered strong profits in a period of low interest rates, while keeping its focus on digitalisation and building great services for customers.” 

The lender reported an increase across capitalisation, assets and net profits in 2016 and lowered its cost-to-income ratio by eight percentage points to 34%.

Nordea has continued to improve its access-ibility for personal banking customers with initiatives such as online onboarding, which provides new consumers with a straightforward, smooth and compliant process of becoming a new customer of Nordea. 

“Banking is transforming, and our ambition is to be available for our customers anywhere and at any time, offering relevant and competent advice,” says Mr Storset. “We aim to be innovative and offer the best digital solutions available in the market to our customers.”

Nordea has introduced innovative services such as its chat robot Nova, which can answer customers’ questions. The bank further scaled up the co-operation with start-ups through its accelerator programme, through which it is helping start-ups grow and benefits from being able to offer its customers new and innovative services. 

To help prepare Norway’s youth for their future jobs and careers, Nordea co-operates with Ungt Entreprenørskap, part of the worldwide Junior Achievement non-profit organisation. Nordea aims to educate young people in personal finances and offers advice in areas such as budgeting, making financial decisions and saving.

Portugal, Banco Santander Totta

A successful financial year with strong net profit growth and a reduction in non-performing loans sees Banco Santander Totta take Bank of the Year in Portugal. The lender was further able to successfully integrate the assets and liabilities of troubled Banif, which it took over in December 2015, in only nine months.

Santander Totta’s main successes in 2016 were financial ones, according to the bank’s chief executive Antonio Vieira Monteiro, such as being “the most profitable bank in Portugal” and “growing organically in resources, deposits and customers”. 

“We have increased our profitability by 36% to €395.5m, through organic growth that led to an increase in our financial margin, commissions and customers, and a reduction in costs,” he says.

Primarily through organic growth and a focus on increasing deposits, mortgage loans and loans to small and medium-sized enterprises, Santander Totta grew its net interest income, commissions and commercial revenue in 2016.

Santander Totta continued its digital improvements in 2016, which included the introduction of new features to its retail banking app, reducing the need for customers to visit branches. Overall, digital customers grew by 32%.

In 2017, Santander Totta has increased lending to households and corporates, which has contributed to a gradual recovery of the credit book, as well as to higher fee income. 

In June, Santander Totta acquired Banco Popular’s Portuguese assets, giving the combined group market shares of more than 15% in both lending and deposit taking in the country.

“For the coming years we are focusing on the organic growth of the bank, [which will accompany] the growth of the Portuguese economy,” says Mr Vieira Monteiro, who adds that until 2020 the main challenge for Santander Totta will be the integration of Banco Popular Portugal.

Spain, Banco Santander Spain

Having enjoyed solid growth rates more than 3% since 2015, Spain’s economic recovery is supporting banking sector development. However, as is the case in other eurozone countries, Spain’s banks are still having to contend with low interest rates and digitalisation challenges. Despite that, Banco Santander Spain reported solid 2016 financials and further invested in digital innovation.

Santander’s net profits in Spain increased by 4.6% to €1.02bn in 2016, while return on equity reached 7.74%. Non-performing loans decreased by more than one percentage point to 5.41%.

The lender’s flagship 123 loyalty strategy supported the growth of customer acquisition, while improving loyalty rates. More than 50% of the bank’s new clients in 2016 and early 2017 joined as 123 customers.

Santander is transforming its distribution network and has renovated its ATMs to be fitted with contactless functionalities such as money withdrawal via smartphone or cash deposits, while it continued launching new specialised mobile apps. These included Bansacar for the bank’s car leasing business and My Commerce App to support the self-employed and small and medium-sized enterprises.

On top of this, in December 2016, Santander was the first bank in Spain to launch Apple Pay.

While Santander’s financials for 2017 are expected to be slightly dented by the costs of integrating Banco Popular, the ailing lender Santander took over in June, Rami Aboukhair, chief executive of Santander Spain, notes that “the execution of the acquisition of Popular was a clear success”. 

“We were able to quickly recover stability, reassure millions of clients and thousands of employees, and we are recovering its commercial momentum,” he says. “We want the integration of Popular to be exemplary, making the affected individuals our priority and without losing a single client.” 

Sweden, SEB

After entering negative territory in 2015, since early 2016 interest rates have reached a new record low of -0.5% in Sweden. And while economic growth of just over 3% is supportive, government plans to increase resolution fund contributions from 2018 and the aim to introduce a bank tax are making the country’s operating environment increasingly complex. Despite that, SEB has proven its ability to keep customer focus and adapt to new circumstances, while pushing ahead with digital innovation.

“In the 2016 Prospera survey, SEB ranked number one in overall customer satisfaction among Nordic Tier 1 large corporations… confirming SEB’s position as the leading corporate bank in the region,” says Johan Torgeby, president and chief executive of SEB. 

During 2016, SEB promoted new projects to make the bank more accessible to customers. One example is Aida, a virtual customer service member who – unlike a chatbot – can learn to conduct a dialogue through artificial intelligence and perform tasks just like a human. SEB further invested in Tink, a fintech business whose app helps users get a better overview of their income and expenses, and is integrating the functionalities into SEB’s mobile app. 

“Our ambition is to capture the full potential that digitalisation and usage of data provide, both in terms of added customer value and increased internal efficiency,” says Mr Torgeby.

One of the pioneers of the green bond market, SEB sees sustainability as an essential part of its business strategy. The lender promotes climate-friendly and resource-efficient solutions, supports environmentally friendly entrepreneurship and strives to reduce the bank’s own direct environmental impact. 

A “strong sign” that the bank’s “strategy to integrate sustainability is paying off” was SEB’s inclusion in the Dow Jones Sustainability Index, as the only Nordic bank, in 2016, according to Mr Torgeby.

Switzerland, UBS

A wide range of innovative solutions across the bank’s diverse client groups makes UBS the Bank of the Year in Switzerland for the second year running.

In Switzerland, UBS has launched innovative solutions such as remote video advisory, a mortgage platform connecting professional borrowers with investors (which allows borrowers to receive alternative offers from institutional investors), as well as electronic signatures for personal banking and wealth management clients, making apps for credit cards and other products swifter and more convenient.

To better service its small-and medium-sized enterprise (SME) clients and corporates, in 2017 UBS started offering a financial planning tool for SMEs, supporting their liquidity management, and trade finance contracts based on blockchain technology for its corporate clients, enabling a faster and more secure processing of transactions.

In its wealth management division, UBS started implementing one global platform to consolidate the vast majority of its global assets. This enables the group to better deliver the best digital, advisory and support tools to the majority of its clients and advisers. 

Institutional and ultra-high-net-worth individual clients further enjoy strengthened reporting functionalities, allowing clients to aggregate their multi-bank portfolio data in one tool and run sophisticated performance analyses. UBS also offers an enhanced online real estate evaluation tool, through which clients can directly schedule a meeting with an adviser.

Going forward, UBS aims to better serve its female clients through a five-year plan, which includes measures to improve women’s financial confidence and better serve their needs through UBS Unique. The bank also has ambitions to make UBS’s own workforce more diverse and progress towards increasing the ratio of women in management roles from one-quarter to one-third.

Turkey, Garanti Bank

In a challenging period for the Turkish economy, with gross domestic product growth dipping to 3.2% in 2016 compared to 6.1% in 2015, and volatility increasing due to a failed coup attempt, Garanti Bank still managed to report strong results and push on with its innovations.

Net profits increased by 42% to Tl5.15bn ($1.31bn) in 2016, returning 15.4% on equity – more than 2.5 percentage points higher than in 2015. Net income in the first nine months of 2017 further increased to Tl5.06bn (compared with Tl4.16bn in the same period in 2016). Assets and capitalisation also increased in 2016, despite volatility globally and domestically, which was related to the failed coup attempt. 

According to Fuat Erbil, Garanti’s president and chief executive: “Garanti’s customer focus, capital generative growth and efficiency improvement led to sustained strength in fundamentals and an outstanding performance”, despite the challenging environment.

Garanti Bank, which is majority owned by Spain’s BBVA, has tripled its branch network since 2002 to serve the still sizeable unbanked population in Turkey, and now covers 100% of the country. It also offers door-to-door banking services for people living in rural and isolated areas.

At the same time, Garanti invested in technological innovations and is heavily focused on digital channels. The lender re-designed its Garanti Mobile Application and included innovative services such as log-ins via eye recognition, online appointments and money withdrawal through QR codes. 

“The new digital era offers many opportunities and in order to benefit we have been transforming ourselves for the past two decades,” says Mr Erbil. “We recently launched our new branch service model, Garanti Plus, aiming for increased digital penetration [with regards to] customers as well as processes, thus further enhancing customer experience and loyalty.”

UK, Lloyds Banking Group

Strong profit generation and successful efforts to create a simpler and more efficient bank make Lloyds Banking Group our Bank of the Year in the UK. In 2016, Lloyds more than doubled its pre-tax profits to £2.5bn ($3.3bn), posting a 13.2% return on equity.

One of the bank’s strategic priorities is managing its costs and its cost-to-income ratio of 48.7% at the end of 2016 was significantly below the UK average. In 2016, Lloyds announced an acceleration of its cost-cutting initiatives and an increase in targeted savings as a response to the lower interest rate environment and, as of the third quarter 2017, the ratio has further fallen to 45.9%.

Through acquiring UK credit card company MBNA, Lloyds enhanced its future earnings capability. Lloyds fully covered the capital impact of the acquisition through strong capital generation, while at the same time increasing dividends to a total of £2.2bn in 2016.

The strong financial performance of the group allowed the UK government to complete the sale of its holding in Lloyds in May 2017. Lloyds in total returned £21.2bn to the taxpayer and is now back in private ownership.

While the group still operates the UK’s largest branch network across its brands, it has committed to invest £1bn in digital transformation from 2015 to 2017. More than 60% of the group’s simple customer needs are now met online and most new loans and credit cards are now applied for through digital channels. 

For small business customers, Lloyds has reduced the digital application process for onboarding customers from 15 days to one day. In the past 12 months, Lloyds has increased net lending to small and medium-sized enterprises by 3%, underpinned by its SME Charter, seeking to help 1000 companies mature into established businesses worth £1m in three years.

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