Global Finance presents the best private banks in the CEE region.
This year has been a roller coaster for Central and Eastern Europe (CEE). On the one hand, early 2022 saw growth on the back of strong consumer demand following the Covid-19 pandemic; on the other, as the year progressed, the fallout from Russia’s invasion of Ukraine made itself felt with much higher energy prices, a surge in inflation and a general falloff in confidence. The World Bank now says regional GDP this year will contract 0.2%, an improvement on its July forecast of -2.9%.
Against this background, private banks have put in a surprisingly strong performance, with assets under management (AUM) rising pretty much across the board. Growth in the ranks of high net worth individuals (HNWIs) is rising across the region, largely due to tech-oriented startups, particularly in such countries as the Czech Republic and Romania. It’s too early to assess the war’s impact, but Putin’s growing unpredictability inclines wealthy Russians to prefer nearby CEE banks.
The region is dominated by large Western European banks, which do not generally give regionally separate figures. Those that do show rising deposits and profitability, suggesting that CEE is a maturing market.
BEST PRIVATE BANK IN CENTRAL AND EASTERN EUROPE
BEST PRIVATE BANK FOR SUSTAINABLE INVESTING
OTP BANK
Last year’s overall winner is also this year’s: OTP Bank, the former Hungarian state savings bank, which now operates in 11 countries across the CEE region (Erste Bank, by contrast, operates in just seven) with some 40,000 employees and almost 1,500 branches. OTP Group has seen AUM and revenues rise dramatically in the wake of the pandemic, with the former in Hungary up by almost 12%, or €6.4 billion ($6.4 billion), in 2021. Growth has been helped by clear segmentation: Prestige Banking, Private Banking and Digital Private Banking enable different levels of investment-advisory and other services according to client needs.
Successful branding and a good image have also helped growth and expansion, particularly with a focus on the future. The OTP Group’s Sustainability Report for 2021 runs to no fewer than 118 pages, highlighting its green and sustainable activities. The group has been a leader in green bond issuance—95 billion Hungarian forints ($236.3 million) of green mortgage bonds to date; some 103 billion forints of the loan portfolio had been allocated to the utilization of renewable energy as of the end of 2021 and 43 billion forints were invested in the OTP Climate Change 130/30 investment fund in 2021. OTP’s current environmental, social and governance strategy commits it to being “the regional leader in financing a fair and gradual transition to a low-carbon economy and building a sustainable future by offering balanced financing opportunities.”
BEST PRIVATE BANK FOR SUSTAINABLE INVESTING
Akbank
Times may be hard in Turkey right now, which probably explains, at least in part, Akbank’s seeing a sharp 52% year-on-year rise in AUM in 2021 to 59.8 billion Turkish liras ($3.2 billion), as Turks struggled to protect their wealth from rising inflation. The bank puts mutual trust at the heart of its marketing campaign and seeks to empower clients by making them feel part of the private banking process. In autumn 2019, just before the pandemic hit, the bank launched its redesigned Akbank Mobile investment module, which enables clients to follow all investment accounts, price changes and trends from a single point. Clients can also easily buy or sell silver and platinum after opening their accounts via Akbank Mobile, a signature-free application enabling relationship managers to initiate transactions that clients can then complete on their mobile application. This has especially helped less tech-savvy clients benefit from mobile applications more easily.
