The Banker Awards 2009 - Global Winners

The Global and Regional Awards winners

Global Bank of the Year - Banco Santander

Western Europe - Banco Santander

Central & Eastern Europe - UniCredit

Asia - Standard Chartered Bank

Americas - Itaú Unibanco

Middle East - Blom Bank

Africa - Standard Bank Group

Cash Management - Citi

Securities Services - Citi

Financial inclusion - International Commercial Bank, Albania

Emilio Botín, chairman, Santander

Global Winner & Western Europe

Banco Santander

The international bank which has come through the crisis the best - and taken advantage of the opportunities that have arisen from it - is Santander. The bank has managed to come up with a winning formula that combines an aggressive sales strategy with solid risk management and tight cost control. In essence, it is a very basic approach to banking but, as has been shown from the crisis, many banks have been unable to emulate it.

The bank's chairman, Emilio Botín, says: "This year was a challenging year in international banking, but Santander was able to continue to generate profits and value for its customers and shareholders. We owe our strength to a business model that focuses on commercial and retail banking, with geographical diversification in 10 key markets, based on closeness to the customer through the largest branch network of any international bank. Moreover, our prudence in managing risk and maintaining a strong capital position has made us one of the most solvent and efficient banks in the world. Integrating the units we have acquired in Brazil, the UK, Germany and the US will enable us to continue building on that model, reinforcing our growth potential during the down phase of the cycle."

In the UK via its Abbey franchise, Santander was able to acquire two banks that got into difficulties - Alliance & Leicester and Bradford & Bingley - on very attractive terms, and in the US it acquired the 75% of Sovereign Bancorp it did not already own, for $1.9bn. In Brazil, the bank has also consolidated its position with a successful $8bn rights issue to fund further expansion of its operation built on the prior purchases of Banespa and Banco Real.

The bank's home market in Spain still accounts for 27% of group profits and Santander has shown its mettle there by maintaining its performance in tough times. CEO Alfredo Sáenz says: "In a difficult year for Spain's economy and banks, Grupo Santander's two main units in the country - the Santander branch network and Banesto - succeeded in generating significant, highly recurrent profits, closely managing their non-performing loans to keep them well below the sector's average. With strong balance sheets and strict management of costs and risks, Santander and Banesto are well positioned to gain market share in segments of interest to the group."

Federico Ghizzoni, head of CEE banking operations, UniCredit Group

Central & Eastern Europe

UniCredit

UniCredit's performance as a group in central and eastern Europe (CEE) speaks for itself in The Banker's 2009 Bank of the Year awards - its member banks are winners in five individual countries, including major markets such as Poland and Turkey. Its sheer consistency of performance across the region is striking. In the first three quarters of 2009, when recession hit hard in the majority of CEE economies, UniCredit stayed in profit in almost every market, including some of the worst affected, such as Hungary and Ukraine.

Federico Ghizzoni, UniCredit Group's head of CEE banking operations, puts the success down to several factors. First, the group has always approached the region as a long-term investment modelled for the sustainability of its business, shying away from aggressive year-by-year targets.

"This means in periods when the economy is growing faster, you might lose a little in potential revenue generation, but when the economy slows down, having managed the bank with a prudent risk profile, this strategy pays back," says Mr Ghizzoni.

The bank also tries to strike a suitable balance between a central strategy and local expertise and experience - it has almost always bought existing banks rather than making greenfield investments. Local managers are responsible for their own profits and losses and customer coverage, with business lines, governance and risk monitoring conducted centrally.

The combination was certainly effective in encouraging the bank to engage with customers actively from mid-2008, before the downturn began to bite in the CEE region. "We started a deep due diligence on our banks' portfolio quality, not to start deleveraging immediately, but to approach all corporate customers where our exposure was over a certain limit, even if they were fully performing, and to see in a stress-test which ones would have a problem, and we would present an active liability management proposal to them," says Mr Ghizzoni.

The resulting health preservation of portfolios means that the bank is ready to move back to revenue generation and customer acquisition in 2010. Mr Ghizzoni is keen that UniCredit should do so ahead of competitors, because economic growth in the region could remain subdued for another two or three years, reducing the pool of potential revenues for which the players are competing.

He is anticipating corporate business to recover more quickly than retail, as businesses make early decisions to resume expansion. But the CEE region's underbanked retail customers remain the great long-term potential for UniCredit.

"Customer satisfaction was not a well-developed concept in the CEE region, and we have made it a key driver for staff incentive schemes. For a sustainable business, we need quality of service, expanding our share of wallet and revenues per customer, not aggressive acquisition of new customers," says Mr Ghizzoni.

Jaspal Bindra, CEO, Standard Chartered Asia

Asia

Standard Chartered Bank

Besides scooping up the country awards in Hong Kong, Brunei, Nepal and South Korea this year, Standard Chartered Bank put in another exceptional performance for financial year 2008, with income rising 26% to $13.97bn and operating profit before tax (OPBT) up 13% to $4.57bn, in what was a challenging operating environment, particularly in the second half of the year.

In Asia, a few key economies put in particularly excellent performances, with Singapore OPBT rising a staggering 67%, India by 37%, and South Korea by 10%. This strong financial showing was followed by a record performance for the first half of 2009, with income rising 14% to $7.96bn and OPBT by 10% to reach $2.84bn.

Standard Chartered's pre-eminence in the Asia region has been reinforced throughout the year, with the bank making several key acquisitions in Asia, including the 100% purchase of Cazenove Asia Limited, a leading Asian institutional brokerage business, from JPMorgan Cazenove.

In Taiwan, the bank was named as the preferred bidder to acquire the 'good bank' portion of Asia Trust and Investment Corporation's Taiwan arm, in a deal that will further increase the bank's island-wide presence from 88 to 95 branches, and in particular strengthen its presence in Greater Taipei.

Meanwhile, Standard Chartered has expanded its existing bancassurance relationship with Prudential into new Asian markets, including Japan and Thailand. The bank is also poised for rapid expansion in Vietnam, having been granted a licence by the State Bank of Vietnam in September 2008 to set up shop in the rapidly growing economy. To this end, Standard Chartered also expanded its stake in Vietnam's Asia Commercial Bank in May 2008.

"We are extremely pleased to receive The Banker's award for best bank in Asia," says Jaspal Bindra, CEO of Standard Chartered Asia. "Standard Chartered has been conducting business in Asia for more than 150 years. The key for us has been to remain focused on our strategy: we do business in markets we know, deal in products we understand and engage with clients with whom we have deep relationships. Our strategy has enabled us to emerge strongly from the crisis, and Standard Chartered is well positioned for growth given our presence and expertise in Asia."

Roberto Setubal, chief executive, Itaú Unibanco

Americas

Itaú Unibanco

One of the most talked about deals in the Americas, the merger between Itaú and Unibanco, has created a bank with $357bn in assets and a total deposits base of 222.64bn reais ($111bn), according to the Brazilian central bank.

The new group is not only the new leading Latin American bank, it boasts the highest ranking for a Latin American bank in recent years, in 33rd place in The Banker's Top 1000 World Banks listing.

The deal has greatly improved the group's funding costs and the combined strength of the two banks means its penetration in Brazil is unparalleled, with a presence in 1100 Brazilian municipalities, a total of 57 million customers, and branches in 12 foreign markets.

Perhaps most importantly, the merger is significant because it strengthened the bank's ability to compete with larger international players and has given the country, and the region, even higher expansion potential.

"Brazil managed to quickly overcome the effects of the global crisis thanks to the strength of its economy and financial sector," says Itaú Unibanco chief executive Roberto Setubal. "Itaú Unibanco believes it has played a role in this process and is confident that in the coming years we will continue to grow in a sustainable manner both locally and overseas. This growth will continue on a consistently stronger basis reinforced with the gain in synergy obtained through the integration of Itaú and Unibanco.">

Saad Azhari, CEO, Blom Bank

Middle East>

Blom Bank

In the midst of global financial upheaval, Lebanon's Blom Bank managed not only to significantly increase its profits and improve its profitability, it also broadened its regional footprint with a number of key acquisitions and product launches.

Although not the biggest bank in the Middle East, Blom has demonstrated its ability to produce impressive financial performances in both 2008 and into 2009 while expanding its operations in the Gulf, the Levant and Egypt.

Two insurance acquisitions in Egypt, a bank purchase in Jordan, a new brokerage in Syria and new operations in Saudi Arabia and Qatar along with the launch of new funds reflects both the breadth and depth of Blom's commitment to the region. And its 20% growth in assets under management shows its attractiveness not only in Lebanon but also in the Gulf and throughout the Lebanese diaspora worldwide.

"It is a great pleasure to us at Blom Bank to be awarded The Banker's Bank of the Year in the Middle East and Lebanon for 2009," says Blom Bank CEO Saad Azhari. "It is important as a recognition of the soundness of the bank's model of organic but steady growth in Lebanon and the Middle East region, and its measured strategy of providing safe and rewarding universal banking services. Being the first double award of its kind given to a Lebanese bank, perhaps most of all it sets a precedence of excellence for us to meet our customers' utmost satisfaction and our shareholders' best value."

Jacko Maree, chief executive, Standard Bank

Africa

Standard Bank Group

Standard Bank Group has once again scooped the award for the best regional bank in Africa. It was a close contest this year with Ecobank Group of Togo once again impressing the judges for its dogged performance during the financial crisis and its broad distribution throughout the continent. Standard Bank Group, however, proved beyond doubt that it is a bank on the move, both within Africa and across the developing world.

Standard Bank's recent purchase of 33% of Russian investment bank Troika Dialog was yet another sign, not only of its ambition beyond South Africa's borders, but also of its robustness in the face of the global economic recession. Much of this can of course be put down to the $5.24bn capital injection by Chinese bank ICBC in 2007, but it is also testament to sound management and prudential risk management.

As many of the rest of the world's developed markets banks were taking large punts on risky investments, Standard Bank focused on sustainable growth.

In terms of financial indicators, Standard Bank once again impressed The Banker's awards judges. In the face of the first recession in South Africa for 17 years, the bank managed to increase its net profits by a healthy 8% in 2008, boost its assets by 20% and beef-up Tier 1 capital by 40%.

Standard Bank's ability not only to weather the recent financial storm, but also to thrive, has led to the bank once again winning the Bank of the Year Award for Africa. The 150-year-old institution continued to develop in 2008 into a global diversified financial services player. It made a series of sound investments, both at home and abroad, and has undertaken a sustainable growth policy.

"The past year has been filled with varied challenges in our operating environments demanding constant attention. Despite this, given our strong balance sheet, we continued to drive organic growth and to look for acquisitions," says Jacko Maree, chief executive of Standard Bank. "Our focus has remained on our strong position in our home market and using this experience to continue building operations in chosen African markets and other emerging markets, particularly those with African links." Standard Bank truly is an African bank with global ambitions.

Cash management

Citi

Citi is once again a deserved winner of The Banker's Cash Management House of the Year Award. It has continued not only to remain profitable, but also to keep up its investment in technology and to innovate.

Despite one of the most challenging operating environments for a generation, Citi has consistently increased its revenues in its treasury and trade solutions (TTS) business, and hit its target of investing $1bn into the business annually. The bank recorded its highest ever quarterly revenues for TTS in the third quarter of 2009, which represented 10% year-on-year growth. Net income for the business grew 27% in Q3 2009, year on year.

The bank's dedication to transaction services, often seen as the rather unglamorous plumbing of banking, has paid off. It now provides more cash management services to more clients in more countries than any of its competitors.

Two of the bank's more significant wins for its TTS business in 2008 were its contract with the Hong Kong government to provide purchasing cards to more than 3000 employees, and its deal to provide cash management services to Sri Lanka's fastest growing mobile telephone provider, Mobitel.

In terms of innovation, Citi has not stood still. The bank recently launched a comprehensive e-banking platform, called CitiDirect Banking Evolution, that aims to integrate electronically all facets of clients' account openings, signatory management and account maintenance across multiple legal entities. This is one of a number of innovations the bank has worked on of late, including a treasury diagnostics service that helps clients benchmark their treasury departments and better identify priorities and opportunities.

The Banker's awards panel was once again impressed by the sheer scale of Citi's cash management operations, its consistent revenue growth and the dedication with which the bank plies its trade across myriad global markets.

Securities services

Citi

The breadth and originality of Citi's securities services solutions are fully deserving of The Banker's award in this category. The bank is not new to such plaudits when it comes to its securities services capabilities, but the manner in which the bank turned the challenges of the past year into opportunities is especially worthy of praise. Its timely and effective new solutions spanned across all client segments, from wealth management services to clearing and settlement to alternative investments.

In particular, as the origination of loans is changing amid the turmoil in the markets, new players have been entering the loan field and looking for a provider with scale and local capabilities across emerging markets. Citi not only provided solutions and geographical reach, it also devised a loan custody and reporting service for investors adding distressed loans and debt as asset classes to their portfolios. Hedge fund clients also enjoyed new types of products, with a new middle office service that includes post-trade and pre-settlement services.

An example of the wealth management offering is Citi's multi-product wealth management platform, which provides automated household portfolio and tax optimisation for investors serviced through wealth management distributors and sponsors, helping them to manage client assets in one environment.

On the securities lending side, Citi has quickly responded to reduced volumes and increased focus on counterparty risk with a series of measures. The advanced pooling of lendable assets is indicative of this. As asset managers bring together assets of investors with different tax, accounting and regulatory profiles in single pools to increase investment flexibility, the bank has developed capabilities to lend securities on behalf of each unique investor type in a tax transparent vehicle. As one of Citi's asset management clients says: "This [solution] will enable us to execute our European growth strategy. We are very excited by this launch and the opportunities that this offers."

Financial Inclusion

International Commercial Bank, Albania

One of the key challenges facing all countries is to ensure that the poorest members in the community are included in the financial system. Done properly, this can be both a profit-making activity for a bank, as well as performing a social function and enhancing reputation. But it takes innovative methods to move beyond the traditional banking business model and offer services to the most neglected customers.

From its inception, the International Commercial Banking Group (ICB) has demonstrated that kind of unconventional thinking. Founded by former Malaysian finance minister Tun Daim Zainuddin with a licence in Hungary in 1994, it was listed on London's AIM market in 2007, but retains a remarkable focus on frontier markets - currently 14 of them in eastern Europe, Africa and Asia - that are often neglected by the mainstream international banking groups.

Its Albania subsidiary is a case in point, founded in 1997, just before the pyramid investing scheme scandal shattered the country's economy. The bank managed to stay afloat amid heavy losses, and has matured into a highly respected and significant actor in the local economy.

In keeping with that role, its entry for The Banker's inaugural financial inclusion award demonstrated exactly the kind of initiative that the judges were seeking to celebrate. In 2009, the bank suggested to a number of internationally funded non-governmental organisations (NGOs) working with Albanian orphan children to rethink their use of funds. Previously, the NGOs had deposited funds purely on their own account, but ICB proposed putting half the money into named accounts for each orphan helped by the NGOs.

These accounts run without fees, and the bank will match each dollar invested by the NGOs with four dollars of its own contribution until the children reach legal adulthood. In the meantime, they will receive training to prepare for setting up their own micro-enterprises, using the funds saved for them to buy the core asset for the business, such as a small shop or farm animal.

With 1500 such accounts anticipated by the end of 2010, this simple but effective idea caught our judging panel's eye. It will help bring one of the most excluded social groups into the economy at the earliest possible stage, providing both the savings and the training for financial independence in adulthood.

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