The best banks in 2020 from western Europe.

Andorra

Andbank

In a competitive country category, Andbank emerged as Andorra’s Bank of the Year 2020. The private bank’s strong financial performance over the review period, its commitment to technological innovation, as well as its ongoing international growth, impressed the judging panel. After a difficult couple of years, Andbank’s net profits increased by 2.47% in 2019 while its total assets rose by 2.96%. Most notably, the bank’s Tier 1 capital position grew by 15.3% over the same period. This was accompanied by a marginal expansion of its return on equity increased from 5.38% in 2018 to 5.4% in 2019. Encouragingly, the private bank’s ratio of non-performing loans dropped to 2.93% over the same period, while its cost-to-income ratio came in at 83.79%.  

Andbank’s technological transformation plan, which is known as New Technology and Operations (Newton), aims to position the institution as the benchmark for private banking in the 21st century by introducing new services and offerings that enhance the customer experience. Notable among these is Andbank’s Advanced Market Platform which permits, among other benefits, straight-through processed stock trading in all markets where the bank can trade with its brokers, trading in investment grade high yield bonds, spot foreign exchange trading, as well as options and futures trading. 

Meanwhile, the bank’s mobile application acts as an online broker for customers by facilitating trading in equity markets, exchange-traded funds and, in the near future, fixed income instruments and currency markets. Beyond technology, Andbank has also bolstered its international operations by signing an agreement with Capital Investimentos of Brazil in 2019, which will open new investment opportunities for its clients. This complements pre-existing arrangements in the country with other independent agents. 

Austria

Bawag Group

The Bawag Group has gone from strength to strength in recent years. In 2019, its net profits expanded by 5.2%, while its total assets increased by 2.2%. More encouragingly, its return on equity climbed to 13.5%, up from 12.7%, while its cost-to-income ratio fell to 42.7% from 44.2% in the previous year. 

Bawag Group’s commitment to customer service, particularly through innovation and digitalisation, underpins much of its recent success. The introduction of a fully digital loan geared towards small and medium-sized enterprises (SMEs) in 2019 is a case in point. Through this offering, SME clients can secure a loan of between €5000 to €50,000, using a completely digital application process. 

Meanwhile, in 2019, the Bawag Group successfully implemented its own, distinct network of 88 bank branches across Austria, following a separation agreement with Austrian Post, in which both parties agreed to end their co-operation. The old partnership consisted of 74 Bawag branches and 350 branches of Austrian Post. The lender’s newly designed branch network now consists of modern spaces which enable individualised customer care. Moreover, the bank’s branches have been developed with sustainability in mind: the ‘paperless branch’ concept saved more than 10 tonnes of paper in 2019, while each branch is supplied with green energy. 

“During the first nine months of 2020, we completed important steps in the simplification of our operations, by consolidating our Austrian banking channels and brands under one organisation,” says Anas Abuzaakouk, chief executive of Bawag Group. “In Germany, we continued executing on our growth and profitability initiatives by building a strong front-end sales organisation across key products and channels, while driving synergies across the group.” 

Belgium

BNP Paribas Fortis 

BNP Paribas Fortis has once again secured the country award for Belgium. That the lender has emerged as a repeat winner is no surprise: in recent years its net profits and total assets have both increased, while its cost-to-income and non-performing loan ratio have both fallen. This has been accompanied by an expansion of the bank’s return on equity, which reached 9.8% at the end of 2019, up from 8.6% in 2017. 

Beyond these impressive numbers, however, BNP Paribas Fortis has played an outsized role in supporting Belgium’s economy through the Covid-19 pandemic. This includes measures to support retail and business clients, as well as fulfilling its vital function as a primary dealer of government debt. The introduction of payment deferrals and moratoriums for its customers, coupled with the lender’s role in placing an unexpected $8bn government debt issuance – with other dealers – in just a few days are testament to the bank’s ongoing support during this unprecedented crisis. 

“We’ve remained fully operational with our branches open by appointment, our call centres functioning 100% and a large proportion of our staff working from home. We were able to get all this up and running in just a matter of days thanks to our flexible IT systems and available IT capacity. As a result, we’ve been able to continue playing our part as a bank – supporting our customers and the wider economy as we’ve done for the past 200 years, including through previous crises,” says Max Jadot, chief executive of BNP Paribas Fortis. 

In addition, in 2019 the lender launched PaxFamilia, Belgium’s first all-in digital dashboard for wealth management planning. Through the application, which aggregates a customer’s documents and information, client-s can easily monitor their wealth. 

Finland

OP Financial Group

Finland’s OP Financial Group has, once again, demonstrated the kind of innovation and customer-centric product and service development to ensure that it secured the country award. The judging panel were particularly impressed with the bank’s commitment to information, communication and technology (ICT) development, where impressive strides have been made to adapt both front and back office functions to a swiftly changing market. 

By the end of 2020, about two million of the bank’s customers were using online services. At the heart of this success story is OP Financial Group’s mobile-first drive, which represents the cornerstone of its ICT strategy. The OP-mobile app has more than 1,100,000 unique monthly active users, with more than 90% of them logging in at least once every three days. Most of the bank’s key services are integrated into OP-mobile, from making payments to trading stocks and shares. 

“Banking is becoming more and more digital and we must constantly improve the digital customer experience we provide,” says Timo Ritakallio, president and group chief executive of OP Financial Group. “The number of users of our mobile banking app has increased by 34% this year and we see growth in nearly all age groups. Due to the tightening regulation on the financial industry, we are focusing on our core strengths and on cost efficiency.” 

Meanwhile, OP Financial Group has offered invaluable support to its clients, and the wider economy, during the Covid-19 pandemic. This includes repayment holidays for its private customers, generating Ä280m in additional purchasing power through cash not allocated to loan repayments, along with a raft of other measures to help small and medium-sized businesses through financial advisory services. In addition, most of OP Financial Group’s 12,000 employees switched to remote working. 

Germany

Commerzbank

Commerzbank’s long run of success in the Bank of the Year Awards owes much to its ability to continuously evolve its product and service offerings to meet its customers’ needs. The 2020 awards are no exception. The German lender has once again demonstrated its commitment to cutting edge customer-centric innovation. 

In June 2020, in partnership with Turkey’s Isbank, Commerzbank executed a distributed ledger international trade finance transaction on the Marco Polo network, while in October 2019 the lender ran a pilot import-export financing project on the same network with Russia’s Alfa-Bank and other corporate participants. The object of the pilot project was to build a digital end to end trade and supply chain finance solution on a blockchain platform. 

Meanwhile, Commerzbank has provided far-reaching support for its client base in response to the Covid-19 pandemic. Since March 2020, the bank has provided Ä1bn in coronavirus-linked financing to its corporate customers. On a case by case basis, the lender has also offered extensions of credit lines, near-term liquidity solutions, repayment holidays and temporary suspensions of loan covenants. At the height of the pandemic in Germany, about 80% of the bank’s staff were working remotely. 

“Despite the pandemic, business with our customers is holding up well. The German economy has proved resilient and is backed by a number of powerful government support programmes. Most loan deferrals ended as scheduled and precautionary drawings of credit lines from corporates have been reduced. Our strong capital ratio and benchmark non-performing exposure ratio of 0.9 % provide us with headroom for any future impact arising from the coronavirus crisis and places us in a good position to help our customers with full strength,” says Bettina Orlopp, chief financial officer at Commerzbank. 

Iceland

Landsbankinn 

Iceland’s competitive banking market is characterised by a high degree of innovation and a strong tradition of customer service. The winner of the 2020 country award, Landsbankinn, impressed the judges in both of these domains, as well as its relatively strong set of financial results. 

By the end of 2019 its return on equity was 7.5%, while its cost-to-income ratio and ratio of non-performing loans sat at 42.6% and 2.8% respectively. Landsbankinn’s total assets expanded by 7.6% over the period, while its Tier 1 capital position grew by 3.3%. 

Much of the bank’s recent success can be attributed to its strength in Iceland’s home loan market. Thanks to a combination of the lender’s competitive lending rates, coupled with its generous support for first time buyers, the bank has enjoyed significant growth in this product segment over the past 18 months. In January 2020, the bank had granted about 700 housing loans but by June of the same year this number had doubled. In addition, around 2000 credit ratings were performed on the bank’s website in June 2020 against a typical figure of between 700 to 900. 

To accommodate this increased demand, Landsbankinn has reconfigured its lending process to ensure that staff in any branch are equipped to handle housing loan applications irrespective of the property’s location. In addition, a higher number of summer staff were recruited to handle the demand and keep waiting times low.

Beyond home loans, Landsbankinn has introduced a successful and fully automated process for consumer lending. This involves two data engines that analyse applicants, approves them and then authorises the loan. This permits the bank to issue a variety of loans through its online banking service and mobile application. 

Italy

Intesa Sanpaolo 

Intesa Sanpaolo has prospered in recent times. In 2019, the bank registered a net profit increase of 3.3%, while total assets and Tier 1 capital expanded by 3.6% and 8.4%, respectively. This was accompanied by a return on equity of 8.8% and a cost-to-income ratio of 51.4%, while the lender’s ratio of non-performing loans was just 3.6% over the same period. 

This performance was accompanied by the successful bid for compatriot lender UBI Banca in 2020, a deal which sees the creation of an Italian banking champion able to successfully compete at a regional level. At home, the deal will strengthen Intesa Sanpaolo’s leading position across a number of key business segments, while boosting its share of branches in Italy from 15% to 19%. 

Beyond this deal, the bank is taking the lead in the development of Italy’s green economy. This includes the provision of €2bn in loans geared towards small and medium-sized enterprises to finance sustainable projects, as part of a larger sum of €50bn which has been pledged to the green economy. 

Meanwhile, Intesa Sanpaolo has played a vital role in supporting the Italian economy through the Covid-19 pandemic. “The pandemic hit Italy hard and fast,” says CEO Carlo Messina. “We immediately doubled-down on our commitment to supporting society and the real economy. We donated Ä100m to strengthen Italy’s National Health System, with the group’s top management personally adding Ä6m and clients donating another Ä3.5m. We also provided tens of millions to community social initiatives. 

“Within days, Intesa Sanpaolo offered clients mortgage and loan suspensions. Businesses quickly received Ä50bn in emergency liquidity,” he adds.

Liechtenstein

LGT Bank 

Liechtenstein’s LGT Bank has combined a steady growth trajectory with ambitious expansion plans to secure the 2020 country award. Over the review period, the lender substantially increased its international operations, by opening a wealth management office in Bangkok in 2019, complementing its existing hubs in Singapore and Hong Kong. From its new base in Thailand, LGT Bank will offer services to the country’s high net worth individuals and corporates. In addition, in June 2019 the bank acquired a controlling stake in Validus Wealth, an Indian wealth manager with a footprint across nine cities in the south Asian country. 

The bank has also used its international growth to expand its capabilities in the impact investing space. This includes the acquisition of a majority stake in Aspada, an Indian impact investing firm, from which it has forged LGT Lightstone Aspada, a specialist impact investing unit. Over time, the ambition is to grow this unit into a global multi-billion dollar direct investment platform focused on scalable businesses. 

“The awareness for a more careful use of resources has increased considerably in recent years and with it the demand for sustainable investments and private markets solutions. LGT Bank responded to this trend early on. With our long-standing expertise in the field of alternative and sustainable investment, we are able to meet our clients’ needs in the best possible way,” says Roland Schubert, chief executive of LGT Bank. 

Meanwhile, LGT Bank’s performance in 2019 was commendable with total assets and Tier 1 capital increasing by 14% and 15%, respectively, while its return on equity came in at 6.7%. Its non-performing loan ratio, meanwhile, reduced by a marginal amount to 0.27% from 0.29%. 

Luxembourg

Spuerkeess (Banque et Caisse d’Épargne de l’État) 

The winner of the Luxembourg country award, Spuerkeess, enjoyed a commendable period of growth over the 2019 review period. For one, the bank’s return on equity climbed to 5.3% from 4.2%, backed by an increase in net profits 29.8%. This was accompanied by an expansion of its total assets to the tune of 4.2%, as Tier 1 capital grew by 1.6%. Perhaps most impressively, the lender was able to reduce its cost-to-income ratio from 67.8% in 2018 to 61.3% in 2019. Similarly, the ratio of non-performing loans also moved in a positive direction, falling to 1.02% from 1.20% over the same period. 

Spuerkeess has emerged as a leader on environmental, social and governance issues in Luxembourg and beyond. This includes the fact that it was the first bank in the country to sign up to the UN Environment Programme Finance Initiative – Principles for Responsible Banking in October 2019. In addition, the bank has developed its “roadmap to sustainable finance” throughout 2020, in order to support Luxembourg’s transition to a sustainable economy with a focus on the national government’s priorities in domains such as energy and climate. 

In line with developments in the open banking arena, Spuerkeess has developed a modern application programming interface architecture to facilitate compliance with the EU’s Payment Services Directive 2. In doing so, the bank is also helping to foster increased collaboration with fintechs, while promoting the development of new product and service offerings for its customers. Spuerkeess, along with three other Luxembourgish banks, created LuxHub in 2018, a mutualised solution which offers third-party access to banks and is designed to accelerate the transition to open banking.  

Malta

BNF Bank

BNF Bank has presided over an impressive development trajectory in recent years, characterised by strong profitability and improving performance metrics. By the end of 2019 its return on equity was 6.3%, up from 2.4% in 2017. This was accompanied by decreases to the lender’s cost-to-income and non-performing loan ratio, which hit 68% and 3.9%, respectively.

The lender’s approach to innovation and, in particular, the development of digital and electronic banking services for its customers has been a key ingredient of this recent success. This includes the development of BNF E-customer service, an artificial intelligence chatbot, that is capable of dealing with customer queries as well as converting new leads into business opportunities. 

“Our strategy is to become the bank of choice in Malta through a localised and community-based approach,” says Michael Collis, CEO and managing director of BNF Bank. “Aligned with this has been a strong growth in demand locally for digital banking services. The bank has instigated a substantial technology investment programme to ensure our customers’ needs are met in this respect. Additionally, the bank continues to strengthen its core product suite to ensure clients are well served throughout life’s journey.”

Meanwhile, BNF Bank is looking to upgrade its core banking system as part of its transition to becoming a digitally-oriented bank that is better able to serve its customers in a changing world. In line with this ambition, the lender has also signed an agreement with the Microsoft Innovation Centre in Malta. “The bank has significant expansion plans both locally and internationally. We will continue to invest in our human resources, infrastructure and products to ensure we are the bank of choice for our customers,” says Mr Collis.  

Portugal

Banco BPI

Portugal’s Banco BPI has endured a number of challenging market headwinds in recent times. But the lender’s sound asset quality and strong capitalisation levels have ensured that it is well positioned to endure the challenges associated with the economic fallout from the Covid-19 pandemic. By the end of 2019 the bank’s ratio of non-performing loans was just 2.5%, which compares favourably with domestic and regional peers, while its Tier 1 capital position expanded by 1.2%. 

“The low interest rate environment is having a strong impact [on the market] – which will be prolonged due to the pandemic crisis. Despite this, BPI was able to maintain net interest income with a 1.4% increase year-on-year (September 2019 - September 2020) to €330.8m, supported by loan portfolio growth. We continue looking at ways to contain cost growth while, at the same time, launch new products and introduce new revenue streams,” says João Pedro Oliveira e Costa, chief executive of Banco BPI. 

Meanwhile, the bank has also taken a number of notable steps to support its clients through the difficulties of 2020. This includes an increase to the number and amount of pre-approved personal loans, a substantial growth in pre-approved credit lines for small and medium-sized enterprises, and an exemption for all fees on automatic payment terminals to facilitate low value payments. 

“Our capital position and credit risk indicators allow us to be at the forefront of relief measures. BPI provided over €4.5bn in loans and conceded more than 100,000 moratoria – 98% of which are still well-performing. We aim to drive recovery of the Portuguese economy, standing by our customers, employees and society, having set aside €100m in net credit provisions because of the Covid-19 crisis,” says Mr Oliveira e Costa.

Spain

Santander Spain

 

Santander Spain emerged victorious in one of Europe’s most competitive country categories. In a market which has endured a number of headwinds over the past 18 months, the bank was able to increase its net profits 2% in 2019, while its return on equity remained relatively stable at 10.5%. This was accompanied by a notable improvement in its cost-to-income ratio which fell from 57% in 2018 to 53.6% in 2019. 

The bank’s lower operating costs are being helped by its progress in digital banking, a trend which has been accelerated by the Covid-19 pandemic. In 2020, Santander Spain has seen a 20% increase in the onboarding of senior customers, while it now boasts more than 5.1 million digital customers, representing 65% of its total customer base. 

“The virus has fast-forwarded – [by about] three to five years – the digital revolution. The use of digital services has continued to accelerate,” says Rami Aboukhair, chief executive of Santander Spain. “The bank has more than five million digital customers in Spain. Nearly half the sales registered in the first nine months of the year were on digital channels, 8 percentage points more than in 2019.” 

Meanwhile, the bank has made strong progress in lowering its gender pay gap to 2% in 2019, while the number of women in senior management positions has also increased. This work has gone hand-in-hand with other efforts to promote diversity and inclusion across  Santander Spain’s workforce. 

“Santander will continue to play a key role in providing the necessary financing for businesses to mitigate the impact of the economic crisis and promote economic recovery. Commercially, we remain committed to improving service to our customers through all channels, while enhancing efficiency and giving customers reasons to come, stay and recommend us,” says Mr Aboukhair.  

Switzerland

Credit Suisse - Swiss Universal Bank 

Credit Suisse’s Swiss Universal Bank Division, which serves 1.6 million private, corporate and institutional customers, mostly in Switzerland, has enjoyed considerable success in recent years. Total assets expanded by 20% in 2019, coupled with an 8% expansion in net profits. In addition, the bank’s return on equity over the same period was 17.6%, while its cost-to-income ratio came in at 57.2%. 

Yet, beyond these numbers, the bank’s response to the Covid-19 pandemic and the degree to which it has supported both its staff and customers captured the judges’ attention. 

“Internally, up to 90% of our employees worked from home – a major operational change that happened very smoothly,” says André Helfenstein, CEO Swiss Universal Bank at Credit Suisse. “On the client side, one of the main focus were our corporate clients, in particular those hard hit by the pandemic and their need for advice and liquidity. As a bank for entrepreneurs, we provided over 16,000 companies with liquidity through the Covid bridging loan programme that we set up together with the Swiss government and other banks.” 

Meanwhile, as the bank looks to a digital future, the creation of an in-house User Experience Lab is helping to test new products and services with existing customers on Swiss soil. The focus of the lab is on user-intuitive digitalisation, the automation of processes and smart data analytics as key drivers of a customer-centric growth model. 

“As a universal bank, we are committed to our Swiss home market and to all our clients in Switzerland. Private, corporate and institutional clients will continue to have a trusted partner in us. Digitalisation will continue to drive further optimisation of our front-to-back processes and increase efficiency, while becoming even more agile,” says Mr Helfenstein. 

Turkey

Akbank 

Turkey’s recent economic volatility made it a difficult place in which to bank, even before the onset of the Covid-19 pandemic. But the winner of the 2020 country award, Akbank, has weathered these difficulties through a combination of innovative products and services and a commitment to digital transformation. In particular, a $250m investment in the bank’s new ‘Data and Life Centre’, which includes a 5,000-square metre information and technology hall, as well as a range of social spaces to promote staff wellbeing, is some indicator of its digital ambitions. The new centre, which opened in 2019, will act as the nucleus of the bank’s transformation – covering back end processes to front end products and services – into a hi-tech financial institution. 

These efforts, and others, have helped Akbank to endure the full impact of the Covid-19 pandemic to date. 

“Thanks to our strong digital infrastructure and ongoing holistic transformation strategy, Covid-19’s impact was minimal and we have continued to provide uninterrupted service to our customers. Our customers’ priority is to avoid physical contact; therefore, contactless payments, digital payments and adaptation to e-commerce world are the prominent requirements,” says Hakan Binbasgil, chief executive of Akbank. 

Meanwhile, Akbank has completely updated its mobile application to provide customers with a refreshed user experience. This includes the use of artificial intelligence to keep users abreast of expenditure and savings insights, as well as upcoming payments and new value propositions from the bank, among a host of other offerings. 

“Our plan is to create a model where human and artificial intelligence combine, complement, and support each other. Therefore, our technology investments will continue along with our emphasis on human-technology interaction,” says Mr Binbasgil. 

UK

Lloyds Banking Group

In the wake of the last financial crisis, Lloyds Banking Group emerged with a clear strategy in mind: to become a UK-focused bank with an emphasis on retail and commercial banking, as well as wealth and insurance. That it has, once again, emerged as the UK country winner is an indication of the effectiveness of this strategy. 

The bank’s acquisition of Tesco’s mortgage book in September 2019 is a case in point: it now boasts an additional 23,000 mortgage customers to the Halifax brand and a £3.7bn ($4.9bn) prime residential mortgage portfolio. 

In addition, the lender’s commitment to financing a green future also helped to position it favourably. For one, in January 2020 Lloyds announced a carbon emission target in which the bank pledged to cut the amount of carbon emissions it finances by more than half within a decade. This pledge sits alongside other developments the bank is pursuing as it looks to a more sustainable and equitable future. 

“Societal expectations of companies continue to increase and Lloyds Banking Group is taking action to build an inclusive and more sustainable future. We have announced a target to increase black staff in senior roles and a Race Action Plan to drive cultural change, and an ambitious goal to reduce the carbon emissions we finance by over 50% by 2030,” says António Horta-Osório, executive director and group chief executive of Lloyds Banking Group. 

The bank has also worked hard to grow its lending to UK small and medium-sized enterprises in recent years. Since 2011 it has increased its loans to this segment by 36%, even as the overall market contracted by 11%. Moreover, it exceeded its target of lending £19bn to British businesses overall in 2019. 

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