CIS region

CIS lenders are in relatively good health and well positioned to support their national economies through a period of prolonged uncertainty. 

Even before the onset of the Covid-19 pandemic, aggregate economic growth across the Commonwealth of Independent States (CIS) had started to cool. In 2019, the CIS’s gross domestic product (GDP) expanded by just 1.8%, as a drop-off in economic activity in some of the bloc’s largest markets took its toll. Yet, it wasn’t all bad news. Some markets fared relatively well, including Ukraine, which benefited from robust levels of household consumption; and Armenia, where steady domestic demand boosted the services and construction sectors to push GDP growth to 6% for the year. Despite the mixed economic picture across the region, on the whole, banks have performed relatively well in The Banker’s Top 100 CIS Banks Ranking 2020.

Tier 1 capital and total assets have, for the most part, expanded among the leading banks, though profitability levels have suffered among some institutions. The region’s largest lender, Kazakhstan’s Halyk Bank, cemented its position at the top by increasing its Tier 1 capital position by an impressive 24% to reach $3.3bn. This growth story was mostly repeated across the top 10 largest banks, with all except for Belarus’ Belagroprombank registering impressive increases to their Tier 1 capital. Meanwhile, a notable change among the top 10 banks has occurred with Ukraine’s PrivatBank securing second position in the main ranking, moving Belarusbank to third. 

Beyond the main ranking, The Banker has applied the best-performing methodology against the largest five or less bank holding companies in the biggest economies, leaving aside foreign-owned subsidiaries.

Armenia's top five banks scored relatively well, mirroring the healthy economic environment in which they have been operating. The best-performing bank in the country is ArmSwissBank, which achieved an overall score of 8.53. Notably, the lender topped the country table across every performance metric, except liquidity where it placed second. InecoBank, which secured second place in the country ranking, attained an overall score of 5.19. Ameriabank, the country’s largest lender by Tier 1 capital, secured third position in the best-performing table with a score of 4.75.

In neighbouring Azerbaijan, Unibank topped the country table with a score of 8.16, while the International Bank of Azerbaijan placed second with a score of 5.32.

Elsewhere in the Caucasus, Georgian banks also performed well. TBC Bank secured first place with an overall performance score of 7.42, thanks to its market-leading scores in profitability, return on risk, leverage and soundness. Bank of Georgia, meanwhile, came in second with an overall score of 6.53. The lender achieved this by topping the growth and asset quality metrics, while coming in second place according to its profitability, operational efficiency and return on risk. The other Georgian banks featured in the table, Basisbank, Cartu Bank and Liberty Bank, achieved performance scores of 5.6, 4.95 and 3.71, respectively. 

In Belarus, most of the country’s lenders have registered solid results despite the lacklustre performance of the domestic economy in recent times. Minsk Transit Bank, which secured first position in the best-performing banks table, achieved an overall score of 7.43. This was underscored by market-leading outcomes in the growth, profitability, asset quality, soundness and leverage metrics. In second place overall is Belinvestbank, with a performance score of 5.36. Notably, the lender secured first positions in return on risk and liquidity metrics. The remaining Belarussian banks, Paritetbank, Belagroprombank and Belarusbank, achieved overall performance scores of 5.23, 4.57 and 3.52, respectively.

Meanwhile, in Ukraine, PrivatBank emerged as the best-performing bank with an overall score of 7.59. This achievement was underpinned by market-leading scores in profitability, leverage, soundness and return on risk. First Ukrainian International Bank, which came in second place with an overall score of 5.79, managed to top the asset quality table, while third-placed UkrGasBank — with an overall score of 4.56 — secured first position in the growth and liquidity metrics. State Savings Bank of Ukraine and State Export Import Bank of Ukraine also feature among the top bank holding companies from the country, with performance scores of 3.5 and 3.0, respectively. 

Across the border in Moldova, the country’s banks have benefited from the robust economic growth that had taken hold prior to the Covid-19 pandemic. The best-performing lender, Moldindconbank, achieved an overall score of 6.83. Its market-topping performance in the liquidity, profitability and soundness metrics contributed to this outcome. Victoriabank, in second place, secured an overall performance score of 5.68, thanks in part to its dominant asset quality, return on risk and leverage metrics. Moldova Agroindbank, the only other Moldovan lender in the table, achieved a performance score of 4.38. 

The economic fallout from the Covid-19 pandemic is likely to take a heavy toll on the constituent countries of the CIS. Building back from the health crisis will take time. It will also require some heavy lifting on the part of the region’s banks, as they help consumers and businesses to recover over the coming years. Thankfully, CIS lenders are in relatively good health and, on the whole, are well positioned to support their national economies through a period of prolonged uncertainty. 

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