Bank of the Year Awards 2022 — Central and eastern Europe

CEE’s top lenders from 2022
Albania
OTP Bank Albania

Albania struggled during the Covid-19 pandemic, with the country’s economy contracting by 3.5% in 2020. However, in 2021 the country’s real gross domestic product bounced back, growing by 8.5%.

The winner of the Albania country award for 2022, OTP Bank Albania, has exemplified the drive to grow and develop. The bank saw its Tier 1 capital, as well as total assets, grow by 19% in 2021, with annual net profits up from 8% in 2020 to 26% in 2021. The bank also had the highest return on equity in the Albanian banking sector, at 18.5%.

Earlier this year, OTP Group completed the acquisition of Alpha Bank Albania, with the Albanian operation of OTP Group now set to become the fifth-largest bank in the country in terms of total assets and the third-largest in terms of customer loans. It is an exciting time for the bank, with the coming period set to see OTP Bank Albania push forward with the integration process, while also continuing the momentum of the past few years.

Since our last awards, OTP Albania has launched its first batch of online banking upgrades, providing a more advanced online platform for both business and individual customers. A second batch is in the works, which will expand the number of digital offerings, including QR Code invoice payments, digital signature and card management.

At the end of 2021, OTP Albania also became the first and, so far, only bank in Albania to introduce automatic services for foreign exchange transactions. The bank has now begun implementing another important project — a loan origination tool that will enable loan flow management, end-to-end, in a digital environment, and has also launched strategies related to the agriculture segment and home purchase loans.

As another marker of its growing importance in the country, OTP Bank Albania was also chosen as the joint lead manager for Albania’s recent 10-year eurobond issuance.

Armenia
Ameriabank

Ameriabank is playing a leading role in addressing climate change and other environmental issues in Armenia. In 2020, the bank developed its Green Bond Framework, with its debut green bond issuance and placement, the first-ever green bond in Armenia, worth $50m. In 2021, the bank also signed a $20m loan agreements with responsAbility Investments and the Global Climate Partnership Fund to finance small and medium-sized enterprises (SMEs) and green projects in Armenia. A further $30m was announced in November 2021, from the Opec Fund for International Development, to support sustainable energy and SMEs in the country. Overall, Ameriabank aims to double the share of green loans in its portfolio by 2023.

At the same time, Ameriabank’s mortgage loans portfolio has been growing fast, with a compound annual growth rate of 46% over the past three years and a market-leading share of 21%. The bank’s Tier 1 capital grew by 7.2% in 2021, while net profits grew 115.7%, after advancing by just 25.7% in 2020.

Digital transformation of the SME and retail segments have been two of the key strategic directions for Ameriabank in recent years. Last year saw the bank launch a comprehensive digital ecosystem, which currently covers the car market, housing market and e-commerce. It has also launched the first and only online platform for SME customers in the country, intended to serve as a one-stop shop for their needs.

“Our sound corporate governance, change-adaptive culture and digital transformation were key to successfully navigating the market turbulence and adapting to the progressively growing needs of digitally native customers,” says Artak Hanesyan, CEO of Ameriabank. “We will continue investments in digital transformation and human capital to enhance our operational efficiency and innovate in order to become a trusted financial technology space serving people and businesses with seamless solutions to improve the quality of life.”

Azerbaijan
ABB Bank

After seeing its economy dip in 2020, Azerbaijan’s economic fortunes improved notably in 2021, with oil and gas prices strengthening the sovereign balance sheet and the non-energy sector driving gross domestic product growth.

Meanwhile, the International Bank of Azerbaijan, recently rebranded as ABB and our country winner for 2022, has continued to strengthen its capital position, while also embarking on several important initiatives in areas such as digital banking and IT training for young professionals.

The launch of the ABB Tech Academy, at the end of 2019, has shown the bank’s continued commitment to the country’s future, with the academy providing immersive bootcamp programmes aimed at developing the Azerbaijani tech sector and cultivating new generations of IT professionals in a range of fields, such as back- and front-end web and mobile development, cyber security and machine learning. Meanwhile, the ABB Innovation Centre, a corporate innovation programme, has established itself as an important incubator for early-stage start-ups looking to turn their ideas into businesses, with its third incubator programme set to launch later this year. To date, the innovation centre has presented 22 start-ups to potential investors.

The bank has also launched a loyalty programme, Fayda, through which users are able to gain bonuses as a result of various payments through ABB’s mobile app. In November 2021, the lender began offering ABB cardholders the opportunity to use Apple Pay for some of their transactions.

On the financial side, ABB’s total assets grew by 21.7% in 2021, despite Tier 1 capital remaining flat and profits recording negative growth. At the same time, the bank’s return on equity improved from 10.6% in 2020 to 12.4% in 2021, with non-performing loans dropping from 7.7% to 4.2% year on year.

Bosnia and Herzegovina
UniCredit Bank dd Mostar

Bosnia and Herzegovina was strongly affected by the Covid-19 pandemic, with the country’s economy contracting by an estimated 4.7% of gross domestic product in 2020, before jumping 5.8% in 2021, according to the International Monetary Fund.

Banks in the country, such as UniCredit Bank dd Mostar, our country winner for 2022, have had to navigate this difficult climate. Many have done so with extraordinary success.

UniCredit Bank dd Mostar’s total assets grew by 3.2% year on year in 2021, with profits up 18.7% and return on equity rising from 8.4% in 2020 to 10.4% in 2021. At the same time, total loans from the bank to legal entities increased by 1.8% compared to the previous year, confirming UniCredit’s position as a leading player when it comes to financing government and private companies in Croatia; in 2021 the bank approved more corporate loans than it did in 2019, pre-pandemic. The bank’s ratio of net loans to deposits, meanwhile, was 60.6% in 2021, with a capital adequacy ratio of 20.9%.

UniCredit Bank dd Mostar has increasingly embraced robotic process automation, and has now automated areas such as client risk data collection for its corporate credit applications and generating process documentation for loans for legal entities. Its new Digitalisation Plan, meanwhile, includes several initiatives to transform and maximise productivity, with a convergence of online and offline channels and transactions continuing to migrate to direct channels, aided by the implementation of further digital advances. These include areas such as card limit approval processes in its consumer finance applications, which enable loan products to be processed via a single tool.

Since the beginning of 2021, UniCredit Bank dd Mostar has also introduced EMV 3D Secure biometric authentication, the first bank in the country to do this, with a strong focus now on increasing the number of internet stores that provide the possibility of card payments utilising UniCredit Bank’s services.

Bulgaria
DSK Bank

The Covid-19 pandemic hit Bulgaria hard, but 2021 saw a strong rebound, with gross domestic product growth up by 4.2% in 2021, after contracting by a similar amount in 2020. Meanwhile, total assets in the Bulgarian banking sector grew by 9.2% in 2021, with the sector showing its resilience and adaptability.

The winner of the Bulgaria country award, DSK Bank, has exemplified these trends. The bank saw its Tier 1 capital grow by 8.7% in 2021 and total assets rise by 7%, with net profits jumping from negative growth to a rise of 76.7% year on year. The bank’s return on equity also ticked up from 6.4% in 2020 to 11.6% in 2021 (and 19.4% in the first quarter of 2022), with its cost-to-income ratio down from 46.3% in 2019 to 31% in the first quarter of this year.

In 2021, DSK Bank launched a strategic programme for digitalisation, with the main objective to provide high-quality online and mobile banking services. DSK Bank’s online and mobile banking penetration is now one of the highest in the Bulgarian market, with its online banking platform, DSK Direct, having more than 1.3 million registered customers.

One of the bank’s main objectives has been to develop and implement smart solutions and innovative projects aimed at improving the urban environment, as well as increasing the penetration of cashless payments. With its subsidiary DSK Mobile, in 2021 the bank introduced a service for purchasing bus, trolleybus, tram or metro tickets directly using debit or credit cards, or mobile NFC wallets, which had a penetration rate of 45% within its first year of operations.

In 2021, DSK Bank also launched Multibanking, an innovative service that allows DSK Bank clients to register their accounts with other banks and receive information about their balances, transactions and to-order payments.

Croatia
Erste Bank Croatia

Like its parent company, Erste Bank Croatia, our country winner for Croatia, has strong ambitions and posted some impressive growth figures for 2021. The Croatian bank saw its Tier 1 capital grow by 5.5% in 2021, with total assets up 11.9% and the bank’s return on equity more than doubling year on year to 9.76%, though still down on 2019 figures.

The bank’s online banking platform, George, which has been built as an open banking platform that allows third-party applications, has also continued to see positive trends, with 388,000 users as of June 2022 — up 13.5% from the end of 2021 alone.

In 2022, Erste Bank launched its Financial Health Tool, a free tool designed to support corporate clients in reaching a healthier financial balance by giving them access to transparent and understandable information about their current financial situations. These include current and historical credit ratings, their financial performance compared to other relevant companies within their industry, as well as the development of key financial indicators over time. After a gradual rollout, the tool was fully released to approximately 1300 corporate clients in May 2022.

Over the past year, Erste Bank Croatia has, together with utility companies in more than 30 cities, enabled citizens to receive digital bills and pay them free of fees by using the bank’s KEKS Pay mobile app, regardless of which bank they have an account with, as part of efforts to simplify payments for everyone in the country.

In June 2021, Erste Bank Croatia also became the first lender in the country to successfully carry out its own bond issue on the international capital market, with a value of €400m, further cementing its place as a market leader in the country. The funds raised have gone towards stimulating green and sustainable investments in Croatia.

Czechia
Raiffeisenbank

Despite the significant impact of the Covid-19 pandemic, Raiffeisenbank has strengthened its position in the Czech market in recent years. The bank’s Tier 1 capital grew by 22% in 2021, with total assets up 24% and profits rising 119% year on year, reversing a decline in profit growth in 2020. The bank’s return on equity almost doubled to 15% in 2021.

Since the beginning of 2021, Raiffeisenbank’s Czech operation has focused on three major integration projects: the long-term restructuring of Czech Raiffeisen building savings company, after RBCZ became its 100% shareholder, completed in late 2021; the takeover of ING’s retail portfolio; and the integration of Equa bank, the country’s leading challenger bank with more than 500,000 clients. This latter acquisition, announced in February 2021, has helped to make Raiffeisenbank the fourth-largest bank in the country.

Each of these deals has come with challenges, but combined the mergers have strengthened the bank’s operations and its future potential. The bank also launched a new mobile application in September 2021, continuing a digital journey that has seen up to 95% of client requests being able to be handled via the internet and mobile banking. The most recent innovation offered by the bank is the interconnection of the banking world with the world of business and accounting systems, using premium application programming interface services.

“Despite the unexpected complications associated with the conflict in Ukraine, we will continue to pursue a long-term strategy aimed at clients’ satisfaction and an increase in the number of clients,” says Igor Vida, Raiffeisenbank Czech Republic’s CEO and chairman of the board.

“This strategy is primarily based on simple, client-attractive and free-of-charge products and services that make life easier for clients, and stable growth in receivables with a balanced ratio of loans to deposits. We will continue to focus intensively on product innovations, simplifying services

Estonia
LHV Pank

While the Estonian banking sector has long been dominated by foreign lenders, domestic banks such as LHV Pank, the country winner for 2022, are making a strong play for Estonian business and are pushing their more international rivals when it comes to technology and innovation.

LHV saw its Tier 1 capital grow by 30% in 2021, with total assets up 38% and net profits rising 85%. The bank’s return on equity has also risen steadily, from 13.8% in 2019 to 17.3% in 2020 and 25.6% in 2021, while its cost to income ratio dropped from 53.2% in 2019 to 38.6% last year. In 2021, the bank grew its customer base by 24%.

If this was not enough to win the award, LHV has also been at the forefront of digital innovation, becoming the first bank in Estonia to offer clients the opportunity to trade in crypto-assets via Bitstamp, one of the world’s largest licenced crypto exchanges.

Since the beginning of 2021, LHV has also launched a fully virtual bank card that is ready to use almost instantaneously, with no monthly fee and no need for a plastic card. Today, almost one in every five new bank cards ordered from the bank is a virtual card.

“LHV has always paid great attention to the development of its digital channels, and this gave us an advantage when Covid-19 arrived, because our customers could already do all the necessary operations in the mobile app or in the internet bank,” says Kadri Kiisel, chairman of the management board at LHV Pank.

In 2020, LHV was also the first bank in Estonia to launch green home loans with a more favourable fixed interest rate to encourage clients to make greener choices when buying or building a home. “Customers want to see the bank as a partner who is ready to think along with them and offer them the best all-round solutions, and that is exactly what we at LHV want to do,” Mr Kiisel says.

Georgia
Bank of Georgia

Georgia’s economy has recovered well from the Covid-19 pandemic, with gross domestic product growth of 10.5% year on year in the first half of 2022, according to the World Bank, compared to average growth of just 4% a year between 2011 and 2021. This has been aided by a pickup in tourism, which has reached almost pre-pandemic levels, and with the country set to gain from the inflow of Russian businesses and tech-sector professionals fleeing the fallout from the war in Ukraine.

For banks like our country winner for 2022, Bank of Georgia, it is an important time. The bank saw its Tier 1 capital grow by 35.3% in 2021, with total assets rising by 6.4% and net profits up 142.7%. The bank’s return on equity, meanwhile, almost doubled between 2020 and 2021, rising from 13.9% to 26.8%.

Digitalisation has increasingly become a core feature for Bank of Georgia. The number of active users of its mBank and iBank platforms grew 21.2% in 2021, to account for 58.6% of the bank’s active customer base. In 2021, it added new digital products and redesigned product journeys, aimed at simplifying customer digital experiences, including a fully digital consumer lending process, digital onboarding and retail brokerage.

In the first quarter of 2021, Bank of Georgia also launched a financial mobile app for businesses, and within six months of its launch half of the bank’s active business digital users were using it. The bank is now working on a junior app, a first for schoolchildren in Georgia, which will combine fun with financial elements. In December 2021 Bank of Georgia also launched a new investment platform for retail investors, embedded into its mBank platform.

The impact of all of this is all too apparent: according to the bank, 96% of all its customer transactions were done via the bank’s digital channels in 2021.

Hungary
OTP Bank

OTP Group accounted for several winners in our central and eastern Europe list for 2022, and among them the award for its Hungarian main operations — OTP Bank — which saw its Tier 1 capital grow by 9% in 2021, and its total assets increase by 24%. Net profits for the bank also grew strongly, by 34% year on year, while its non-performing loan ratio continued to drop.

Across the region, OTP Bank has pushed to be the leader in financing the transition to a low-carbon economy, as well as building a sustainable future. The bank has created a green loan framework to ensure that green lending has a real and tangible sustainability impact and in July 2021 it issued its first euro-denominated MREL-eligible green bond, with an order book of more than €400m.

At the same time, over the past few years OTP Bank has also rolled out its personal finance management service, aimed at helping its clients better manage their finances. The bank has continued to improve its digital user experience and increase customers’ financial awareness. It has also expanded its chat platform, and now has 16 end-to-end chatbot processes live, providing automated support around the clock.

In 2021, OTP Bank launched a new corporate client servicing model for day-to-day cash management services, in order to respond to increasing demand for remote client services and to improve the client experience. The new processes are customised for various needs, supported by remote client serving processes and digital tools. As part of this initiative, the bank reviewed more than 400 processes, from current account opening and contracting for new products and services, to complex corporate liquidity services, with many subsequently being redesigned for better usability.

Kosovo
Raiffeisen Bank Kosovo

High inflation, falling consumer and investor confidence and tightening financing conditions are expected to put a dampener on Kosovo’s economic growth this year and next, but the country has already shown resilience, with economic output expanding by an estimated 9.5% in 2021.

Our country winner for 2022, Raiffeisen Bank Kosovo, has a 20% domestic market share, making it the largest bank in the country in terms of its balance sheet. While the bank’s Tier 1 capital dropped by 13.5% in 2021, its overall assets grew by 7.2%, with pre-tax return on equity growing from 14.5% to 24.2% year on year and its cost-to-income ratio improving from 54.1% to 46.9%.

The implementation of several digital solutions over the past 18 months has strengthened the bank’s position. In 2021, it focused on expanding its digital offerings, including its e-Finance platform, which allows easier access to term loans for investments or multipurpose working capital credit lines. In 2021, it also launched its mobile version for customers to trade in various time zones in foreign currencies. It is aiming to become a Swift gpi bank by the end of 2022, which will enable it to offer clients the main benefits of gpi, including faster payment, traceability, security, transparency and cross-border payments.

In June 2022, Raiffeisen Bank Kosovo launched RaiKesh, becoming the first bank in Kosovo to offer a digital loan platform for individuals, through which a customer can apply for a personal loan online and receive an answer within minutes.

“We are always observing the market trends and strive to adopt our strategy, products and services to meet our customers’ expectations,” says Anita Kovacic, CEO of Raiffeisen Bank Kosovo. “We shape our future by continually observing the market trends, like green and digital that continue to drive our innovation. We trust that our adoptive strategy approach will keep us number one and the most recommended bank in Kosovo.”

Lithuania
AB iauliu Bankas

In the midst of the Covid-19 pandemic, Lithuania suffered only a mild recession, with the economy contracting by around 0.1% in 2020, before growing by 6% in 2021. The Baltic nation is on track to see growth of 2.1% this year, despite the impact of the war in nearby Ukraine.

AB iauliu Bankas, our country winner for 2022, has had an equally solid few years, with Tier 1 capital expanding by 9% in 2021, after growing by 51% in 2020, and total assets up 31% year on year, after rising by 21% and 11% in 2020 and 2019, respectively.

This year has seen the bank take several important steps. In 2022, iauliu Bankas launched remote customer onboarding, with the whole process taking on average 15 minutes and approval within one working day. In February, iauliu Bankas also launched an upgraded leasing application system for car dealerships that have co-operation agreements with the bank, enabling dealerships to upload customers’ leasing applications and, where possible, conclude leasing contracts without the assistance of a bank employee.

The bank is actively pursuing green projects. In 2022, it established SB Modernizavimo Fondas, with the goal of providing funds to renovate 600 old apartment buildings in the country, and thereby improving the living conditions of 16,000 households, while saving around 200 gigawatt hours of energy per year. Loans worth €275m have been provided by Lithuanian and foreign financial institutions, including the European Investment Bank, the Council of Europe Development Bank, INVL Asset Management, Swedbank and the Nordic Investment Bank.

CEO Vytautas Sinius says that this latest award is a sign that the bank is on the right track. “For us, this is proof that we are moving in the right direction and an incentive to keep doing our best onwards,” he says.

Moldova
Moldova Agroindbank

For the Moldovan banking sector, the past few years have been a period of greater transparency and modernisation, with the government enacting important changes to strengthen the integrity and finality of the central bank’s regulatory and supervisory decisions. Even so, the country still faces challenges from limited financial inclusion and shallow capital markets, according to the European Bank for Reconstruction and Development.

Despite these issues, the winner of this year’s Moldova country award, Moldova Agroindbank (MAIB), has continued to grow strongly, while also pursuing a transformational agenda that puts it in a strong position going forward.

The bank has pushed forward with modernising its main business lines and bringing in digital solutions and offerings. Since the beginning of 2021, it has launched a “mortgage in foreign currency” product, adapted credit products to legislative changes, brought in more automation and trained its staff to operate in a more agile way. In November 2021, the bank launched DriveHub, a platform focused on automotive sales, followed by Casahub in April 2022, a platform to search, buy or sell real estate in Moldova.

Meanwhile, MAIB has continued to expand its portfolio of digital services, launching an innovative solution for bank customers which makes it possible to accept card payments on a smartphone or tablet. To date, the bank has issued more than 350 licences for smart point-of-sale devices, with merchants receiving a daily report regarding the transactions performed.

“Our customers are more accustomed to doing everything online, and digital is becoming the key touchpoint with the customer,” says MAIB CEO Giorgi Shagidze. “Over 40% of deposits and nearly a third of our loans are now made via digital channels. We plan to continue winning over the customer with our outstanding service and products.”

Montenegro
NLB Banka AD Podgorica

It has been a challenging year for much of the Balkans region, with lingering economic impacts of the Covid-19 pandemic and concerns over knock-on effects of the war in nearby Ukraine. This has had a negative impact on businesses and, as a result, for the Balkan banking sectors.

NLB Banka AD Podgorica, our 2022 country winner for Montenegro, is no exception, but the bank has shown itself to be an ambitious lender, with significant growth across all key metrics and an important merger completed with one of its domestic rivals that gives it a strong position to grow further.

In 2021, the bank saw its Tier 1 capital expand by 33.7%, with total assets up 39.8% and net profits rising by almost 230%. Return on equity almost tripled to 14.1%, despite the bank’s cost-to-income ratio rising from 56.6% in 2020 to 60.7%.

In November 2021, NLB Banka’s merger with Komercijalna banka AD Podgorica was completed, increasing the bank’s total assets by €146m, or 24%, with an €89m growth in the loan book to non-banks and more than 29,000 clients migrated to NLB Banka as a result of the merger.

Another key focus of the lender over the past year has been adjusting its internal processes and procedures for the implementation of the new legal framework, aimed at adapting Montenegrin business standards to those of the EU. NLB Banka has also moved to integrate the UN Principles for Responsible Banking into all its activities, while also committing to advancing financial literacy in the country; the bank visits primary schools with the aim of educating children about basic financial concepts, and the importance of saving and having a responsible attitude towards money.

“We are focusing on our basic strength that we are a traditionally innovative bank. Therefore, we work on understanding the main requirements and needs of our clients and to fulfil them every day,” says NLB Banka AD Podgorica’s CEO Martin Leberle.

North Macedonia
NLB Banka AD Skopje

The past year has been impressive for NLB Banka AD Skopje, our country winner for North Macedonia. The bank saw its Tier 1 capital grow by 24.8% in 2021, with total assets up 11.6% and net profits more than doubling year on year. Unsurprisingly, the bank’s return on equity also more than doubled, from 8.4% in 2020 to 17.1% in 2021, with its cost-to-income ratio dropping to 40.5%.

NLB Banka has increasingly positioned itself as a financial supermarket, offering comprehensive financial advice and optimal asset management to its customers. The bank has expanded its range of non-banking products to include investment funds and life insurance, as well as the introduction of sale and trading of shares and assets for individuals and legal entities. At the same time, the bank has introduced a range of new digital functions, including opening its first fully digital branch. In October 2021, it became the first bank in the country to integrate the use of electronic identity into its operations, allowing customers to identify themselves and sign e-documents with their qualified e-signature from anywhere in the world.

Like many of its global peers, NLB Banka has also taken a proactive stance towards addressing climate change, with a focus on green loans and particularly lending to areas like renewable electricity generation, pollution reduction and improving the environment. In co-operation with the European Bank for Reconstruction and Development, it has introduced dedicated credit lines for energy efficiency, consisting of two products with a total value of €2m.

“Our plans remain tied to the interest of the people and economy of North Macedonia,” says NLB Banka AD Skopje’s CEO Branko Greganović. “Two themes will be especially important in that regard: first, acting responsibly in support of sustainable development; and second, our products will be aimed at supporting our clients finding their way into the digital world.”

Poland
PKO Bank Polski

Poland continues to be an economic powerhouse in eastern Europe and a growing financial services hub for the region. Banks like PKO Bank Polski, our country winner for 2022, have shown themselves to be highly adaptable and forward looking, while also compassionate to the challenges of those in need.

The bank has been involved in aid programmes to support refugees from the war in neighbouring Ukraine, offering refugees the opportunity to set up a bank account on the basis of simplified procedures, quick and free issuance of a temporary account card, as well as abolition of fees for foreign transfer orders to banks in Ukraine. To date, Ukrainian citizens have opened more than 270,000 accounts at PKO Bank Polski, with the bank’s mobile app available in Ukrainian and a Ukrainian banking hotline set up. It has so far fundraised more than 11m zlotys ($2.4m) to help finance the living needs of refugees, transport and accommodation, as well as medical, legal and psychological assistance.

PKO Bank Polski has set the tone for changes in the Polish market, introducing innovative solutions in co-operation with the start-up community and expanding mobile banking products. The Covid-19 pandemic accelerated the transition of customers to remote channels; during the first quarter of 2022, the bank’s share of digital sales for consumer loans amounted to 79% of the total. Meanwhile, the bank’s IKO mobile app continues to give the bank a competitive edge in the country; since the beginning of 2021, the app has acquired several new updates including contactless payments made by phone without a bank card.

“In these complex circumstances, we react in a flexible and efficient way to social, economic and business changes,” says Pawe Gruza, vice-president of PKO Bank Polski’s management board. “We have set our eyes on personalisation, development of remote forms of services, even faster digitisation and automation of services.”

Romania
Raiffeisen Bank Romania

Raiffeisen Bank Romania scoops the 2022 country award due to its impressive progress in sustainable finance and continued efforts to make banking services more accessible.

In May 2021, Raiffeisen Bank Romania became the first bank in the country to issue green bonds, worth 400.5m lei (€81m), with the funds obtained set to be channelled into eligible projects that ensure the transition to a sustainable economy. The bonds have a maturity of five years and a fixed coupon rate of 3.086%, just 0.5 percentage points above the yield of sovereign securities in the country.

The issuance was followed in June by a second green bond issued by the bank, which at €243m was also the largest corporate bond ever issued in Romania, and a third, worth €106m, in June 2022. The bank also established a Green Bond Framework in 2021, as part of a broader sustainability strategy with the aim of focusing on assets with a positive environmental impact, and was an official signatory of the UN Principles for Responsible Banking.

Beyond these, Raiffeisen Bank Romania has continued to register strong growth, with a 15% increase in total assets in 2021, a 1.5% rise in Tier 1 capital, and a 22% jump in net profits, with a return on equity of 15%. Meanwhile, non-performing loans have continued to fall, dropping from 3.8% in 2020 to 3.4%.

In the realm of small and medium-sized enterprises (SMEs), the bank has continued to develop and adapt its business model, launching two lending products dedicated to sustainability focused SME businesses, with its recently launched Sustainability Platform aimed at SME clients and designed as a tool to guide SMEs to solutions for increasing energy efficiency and reducing costs.

In May 2022, the bank also launched Smart Market, a digital loyalty ecosystem that brings together customers with partners — a first in the Romanian banking market — opening up a new digital channel for selling and promoting products, supported by artificial intelligence solutions.

Serbia
OTP Banka Srbija

Pulling off a sizeable merger in the midst of a global pandemic is worthy of accolades, which is part of the reason OTP Banka Srbija is our country winner for Serbia.

In May 2021, OTP Banka Srbija became one of the leading banks in the country after the successful merger of Vojvodjanska banka and OTP Bank Srbija. The combined bank is now the largest in the country in terms of market share of loans and the second-largest in terms of assets. The integrated bank has net assets of €5.6bn, employs almost 3000 people and services more than 750,000 active clients, with an extensive footprint of 155 branches and 274 ATMs in 91 cities and six regions across the country.

The bank is now firmly looking ahead. In June 2022, it adopted an environmental, social and corporate governance strategy, with defined targets, key performance indicators, expectations and organisational structure, and since the beginning of 2021, it has upgraded or extended its digital banking with new services in areas like foreign exchange trading and mobile banking for small and medium-sized enterprises (SMEs). The bank has said that over the next five years, the focus of its digital transformation will be the development of differentiated digital services, with a focus on digital online products for both retail clients and legal entities.

In 2021, the bank also launched a new edition of its Generator Zero, which supports sustainable solutions projects coming from micro enterprises, SMEs and start-ups from the private sector that have real and measurable effects on reducing carbon footprints.

On the financial side, the bank had a strong 2021. The lender’s net profits tripled between 2020 and 2021, while its total assets expanded by 8.2% and Tier 1 capital by 6.6%. Meanwhile, its return on equity went from just 2.9% in 2020 to 11.1% in 2021. In the first half of 2022 the bank’s share of mortgage loans reached 22%, while its share of deposits reached 13.5%.

Slovakia
Tatra banka

It is not an easy time for the Slovak economy, with gross domestic product below pre-pandemic levels and concerns over the impact of high energy costs. In September, Slovakia’s prime minister said that soaring electricity costs had left his country’s economy at risk of collapse, according to the Financial Times.

Even so, banks operating in the country are firmly looking towards the future. Tatra banka, our 2022 winner, saw its Tier 1 capital grow by 4.9% in 2021, with total assets up 25.2% year on year and net profits rising almost 42%, after dropping by 21.2% in 2020.

The bank is pushing to play a key role in the transition towards sustainability. In April 2021, it became the first bank in Slovakia to issue green bonds. The issue attracted the attention of the Nasdaq Sustainable Bond Network, with which it subsequently formed a partnership. It has also introduced an ‘Account for the Blue Planet’, offering clients green alternatives to its products and a combination of digital solutions facilitating everyday finance management with intelligent technology towards a sustainable future. Clients can use functions that allow them to find out and monitor their impact on the environment.

Meanwhile, in July 2021, Tatra banka launched its own buy now, pay later (BNPL) product, to compete with other BNPL providers in the Slovak market. The bank also launched digital signing in the first half of 2021, and in July 2021 introduced a lite version of its app, with clients able to decide which version of the app is best suited for their needs, aided by a simple questionnaire.

“Tatra banka has continued in its commitment to innovation leadership with carefully monitoring of the value offered to clients,” says Michal Liday, chairman of the board of directors and general director of Tatra banka. “Clients’ needs come first for Tatra banka and we will deliver innovations that brings more comfort to their lives.”

Slovenia
SKB banka

It has been another year of strengthening its capital base for SKB banka, once again the country winner for Slovenia, which saw its Tier 1 capital grow by 7.4% in 2021, after an increase of 21.3% in 2020, and with total assets up 5%, after rising by 8% the year before. This came as the bank’s net profits returned to positive growth, jumping 32% year on year, and its return on equity edged up from 9.1% in 2020 to reach 10.9%.

Despite operating in a high liquidity environment, accompanied by strong competitive pressures on loan interest rates, SKB banka has managed to overcome a decrease in net interest income by successfully increasing its overall service fees income, keeping the bank’s net income on a par with 2020 figures.

Throughout 2021 and 2022, SKB banka has also improved its operational efficiency by gradually transforming and digitising key processes, while automating others. In 2021, the bank introduced several new products and services, including optimising its card portfolio and upgrading its ATM network, which now includes the option of cash recycling (towards an environmental, social and corporate governance orientation). The bank was also the first on the market to introduce an amount-based interest-rate policy on consumer loans, among other initiatives.

At the same time, like its parent company OTP Group, SKB banka aims to be a leader in its region in terms of financing the transition to a low-carbon economy, setting ambitious targets for the next few years. Meanwhile, in May 2021, it was announced that OTP Group had acquired rival bank Nova KBM, with final regulatory approval expected later this year. After that has been received the merger of SKB banka and Nova KBM will begin, likely bringing with it plenty of opportunities for synergies and growth going forward.

Ukraine

Sense Bank (Alfa-Bank Ukraine)

It is fair to say that banks operating in Ukraine are undergoing a profoundly difficult period of time and that they all deserve some level of acclaim. At the same time, our country winner for 2022, Sense Bank, has shown impressive resilience and adaptability, as well as a strong desire to find solutions that will aid the population and country during this time of need.

Sense Bank’s previous emphasis on digital development helped it to react swiftly not just to the Covid-19 pandemic, but also to operating in a country at war. “The war, of course, had a great influence on the tendencies of the financial sector,” says Roman Shpek, head of Sense Bank’s supervisory board. “It did not turn our plans into memories, but it added even more restrictions from regulators, a rapidly increasing level of migration and new conditions of life, where mobility, in addition to convenience, also means safety.”

In 2022, the bank announced that it will change its name to Sense Bank, linked to its digital banking app Sense SuperApp. The app has grown quickly, from having six new functions in 2020 to 52 functions in 2021, and in 2022, despite the war, more than 20 functions have already been launched. The team has reduced the time for updates from six months to just two weeks, with 1.7 million customers using the app as of the end of June 2022.

Among other recent digital additions, the bank was the first in the country to: launch Apple business chat with rapid authorisation, via Sense’s iMessage; offer endless grace periods with the Сaméléon credit and debit card; introduce one-click stock trading of leading international companies; and introduce investing in military bonds — a process that takes only five minutes. It was also the first in the world to organise a concert inside a mobile banking app, when more than 60,000 people watched the famous Ukrainian singer Monatik live.