Winner Profiles | Best Banks 2016

BNP Paribas, a prominent European universal bank, has followed its clients wherever their business has taken them around the world. The Paris-based bank is now present in 75 countries and has continued to gain market share in Europe as other banks have faltered in the low-growth, low-interest-rate environment. BNP Paribas CIB, its corporate and institutional banking business, has become the leading cash management and transaction services provider in Western Europe. It also is a top provider of structured lending and offers classic investment banking services. BNP Paribas is financial adviser to Anheuser-Busch InBev on its planned acquisition of SABMiller. The bank has selectively expanded its CIB activities in the US and plans to form an intermediate holding company there, including Bank of the West, its key US asset. The French bank has been a bookrunner on benchmark debt issues for leading US companies, such as IBM and Coca-Cola. In Asia the bank has more than 100 specialists in equity capital markets and cross-border mergers and acquisitions. BNP Paribas is one of the leading international banks in the Middle East. It offers Islamic services through BNP Paribas Najmah, based in Bahrain. CIB South Africa is the bank’s hub for corporate banking activities in Southern Africa, complemented by securities services operations in Cape Town.

—Jean-Laurent Bonnafé, CEO

www.bnpparibas.com

Royal Bank of Canada posted record net income of C$2.9 billion (US$2.2 billion) for its third quarter, ended July 31, up 17% from a year earlier, and increased its quarterly dividend. RBC, the largest Canadian lender, is keeping a close watch on Canada’s overheating housing sector, particularly in Vancouver and Toronto, but with its conservative lending practices, the bank says it is well prepared for any pullback in home prices. RBC lowered its provisions for credit losses related to the oil and gas sector by 31% in the May-July quarter, compared with the same period a year earlier. The bank has about 15% of its loan portfolio in the oil-dependent province of Alberta, where it makes auto and credit card loans.

J.D. Power’s 2016 Canadian retail banking satisfaction study ranked RBC highest in overall consumer satisfaction among Canada’s biggest banks. The ranking was based on these seven factors: product, self-service, personal service, facilities, communication, financial adviser and problem resolution.

RBC has operations in Canada and 36 other countries, including 17 countries in the Caribbean. Last year RBC agreed to buy Los Angeles-based City National for $5.4 billion to enhance its US franchise.

—Dave McKay, president and CEO

www.rbc.com

Riyadh-based Samba Financial Group, with assets of $63 billion, is a highly regarded Saudi Arabian financial institution in the Middle East region and internationally. It offers a wide range of shariah-compliant products and services and is renowned for its risk management expertise. It also offers well-received Islamic products and services across consumer, corporate, institutional, treasury, private banking, capital markets, investment banking and asset management. In 2015, Samba was involved in complex shariah-compliant real estate transactions exceeding $3.6 billion in overall transaction value. It has very good structuring skills with regard to specialized real estate products.

—Eisa Al-Eisa, chairman

www.samba.com

The Industrial and Commercial Bank of China is the largest commercial bank in China, the world’s largest emerging market. It is also the world’s largest bank by deposits and loans and second-largest by market capitalization. ICBC is number one in the world in terms of Tier 1 capital. The bank operates in 42 countries and has more than 400 overseas branches.

ICBC was the first bank to introduce cash management services in China and continues to lead in this area. It is the leading investment bank in China and the biggest domestic bond arranger. ICBC is also the largest retail bank and the largest issuer of credit cards in China, as well as the largest private bank. ICBC is the largest custodian bank in China, the largest electronic bank, the largest asset management bank and the largest settlement bank. Despite its size, ICBC is also innovative and holds more technology patents than any other Chinese bank.

—Yi Huiman, chairman

www.icbc.com.cn

Qatar National Bank’s strategy of focusing on high-growth markets has given it a growing footprint in frontier markets, even as Qatar itself has been upgraded by MSCI to emerging market status. QNB’s purchase in 2014 of a 23.5% stake in Ecobank made the Doha-based bank the largest shareholder in the trans-African financial institution.

Moody’s Investors Service cautioned earlier this year that QNB’s foreign expansion into riskier jurisdictions is increasing the downside risks for the bank’s asset quality. Still, Moody’s affirmed QNB’s Aa3 deposit ratings with a stable outlook. It said Qatar’s resilient operating environment and QNB’s strong links with the Qatari government give it access to a large volume of low-risk lending opportunities and underpin its high profitability. QNB recently obtained the approval of India’s regulatory authorities to conduct operations in that country, moving it toward its goal of becoming a global bank by 2030.

—Ali Ahmed Al-Kuwari, group CEO

www.qnb.com

With $6.2 trillion in assets under custody, this Chicago-based bank has heft, yet thanks to its client-centric culture, Northern Trust is nimble enough to target lucrative markets around the world, serving pension funds in Nordic countries as well as the sovereign-wealth Future Fund of Australia. Stemming from its legacy as a private bank, Northern Trust maintains a high level of “personal touch” with its clients, providing them with customer relationship officers who answer questions about every aspect of its services. In the Middle East, the bank opened new offices in Riyadh, Saudi Arabia, and Abu Dhabi, United Arab Emirates, in 2013.

—Frederick Waddell, chairman and CEO

www.northerntrust.com

Standard Chartered Bank offers direct custody access to 40 markets across Asia, Africa and the Middle East, giving it the most extensive proprietary network in these regions. In 2015 the bank finished implementing its new integrated custody platform in Malaysia, China and Thailand. The platform’s “single touch” architecture gives clients seamless access to all of its subcustody markets through a single window. An event-driven processing model delivers dynamic, intraday transactional data and reporting updates to clients, replacing batched updates.

—Margaret Harwood-Jones, global head of securities services

www.sc.com

In 2015, UBS raised $56.5 billion in bonds, plus another $14 billion in secured debt, for financial institutions alone. In equity UBS focused on customers like Piraeus Bank of Greece, for which it raised €4.9 billion ($5.5 billion). UBS raised $53.4 billion in 267 equity deals, for a 5.9% worldwide market share. Shareholders price UBS at a book value of 1.0—well above that of Citi or Bank of America.

—Andrea Orcel, president, investment bank

www.ubs.com

Citi’s commitment to the treasury and trade solutions (TTS) business is supported at the highest level, with CEO Michael Corbat calling it “the backbone of our global network.” Citi Innovation Labs in Singapore and Dublin are one key to Citi’s success. They include a Client Collaboration Center, where Citi’s innovation specialists work with clients and regulators to transform banking processes, and a Client Experience Center for clients to try out new TTS services.

—Naveed Sultan, global head of TTS

www.citi.com

Citi TTS provides integrated cash management and trade finance services to multinational corporations worldwide. The bank does business in 160 countries (with trade finance experts on the ground in 96 of them) and 140 currencies.

Citi is one of the first global banks to offer corporate clients in Latin America host-to-host automated services. In North America, offerings range from simple trade finance loans to complex distribution financing structures. In Africa, crucial relationships with export credit agencies and multilateral agencies allow Citi to meet its customers’ capital spending needs and to customize supplier financing. Its cross-border trade hub in Singapore supports regional trade flows in the Asia-Pacific, where Citi is the largest US-based bank in terms of commercial letters of credit outstanding.

—Naveed Sultan, global head of TTS

www.citi.com

For a significant number of banks, supplier finance offerings are geared primarily toward large, credit-worthy buyers and the suppliers they have identified as wanting to assist with supply-chain finance programs. But BNP Paribas’s Global Trade Solutions business, including supplier finance, focuses on the needs of a wide range of buyers, suppliers and distributor financing programs. One of the bank’s unique selling points is its inventory management business, Utexam Logistics, based in Dublin. Operated as a subsidiary of the bank, it can purchase inventory on behalf of a supplier and sell it back to them, providing liquidity much earlier in the supply chain—pre-shipment—than other supplier finance strategies, which tend to be post-shipment, based on buyer-approved invoices.

—Emmanuel Galzy, global head of supply chain management

www.bnpparibas.com

With its broad geographic presence and wide range of products, Citi has the world of foreign exchange covered better than any other bank. Its leading market share attests to the depth of its market expertise and advanced electronic trading platforms. Not only is Citi the biggest FX bank, but it also offers the best-quality service. With operations in 100 countries, including 68 emerging or frontier markets, Citi is one of the main global banks serving large, multinational corporations. From its renminbi cross-border sweeping structure to futures trading on its Velocity electronic execution platform, Citi is constantly upgrading its technology and offerings. Its Web-based CitiFX Pulse platform enables multinationals to track cash flow and balance-sheet exposure across their worldwide subsidiaries and to send supporting documentation online. Last year Citi sold its FX margin business, including its CitiFX Pro retail brokerage, to FXCM in the US and Saxo Bank overseas, as part of efforts to streamline its operations.

—James Bindler, global head of G10 FX (forex in 10 major currencies)

www.citi.com

Although currently under fire for apparently unethical retail practices, San Francisco based Wells Fargo has used its strong balance sheet and correspondent banking relationships to serve clients around the world without investing heavily in local operations in distant lands. Although most of its assets remain in the US, the bank now has more than 50 global offices, including branches in the Dubai International Financial Center as well as Beijing, Hong Kong, London, Seoul, Shanghai, Taipei, Tokyo and Toronto.

Long a leader in international trade finance, Wells Fargo is the largest import factor worldwide and the only bank to own a factoring company specializing in trade financing. Its supplier finance unit serves large corporations and their trading partners around the globe. Wells Fargo is one of the world’s largest providers of foreign exchange, treasury management and trade-processing services.

The bank’s revenue is balanced between net interest income and fee-based income. In the US, Wells Fargo is the leading bank in small business lending, agricultural lending and commercial real estate financing.

—John Stumpf, chairman and CEO

www.wellsfargo.com

ING retains its pole position in Western Europe after turning in a sparkling across-the-board performance in 2015—not only in its Benelux home market but in Poland as well. The bank’s underlying profitability improved sharply, with a 23.2% surge in net profit, to more than €4.2 billion ($4.8 billion). Core lending recorded net growth of €21.7 billion, or 4.2%, while the bank attracted a robust €25.1 billion net inflow of customer deposits. Group CEO Ralph Hamers notes that “in 2015 our retail customer base grew by over 1.4 million customers to 34.4 million at the year-end,” and “of this total, the number of customers selecting ING as their primary bank rose by almost 7%.” He highlights “significant progress on increasing the pace of innovation across the company,” including the Twyp app for peer-to-peer payments and the introduction of the Moje ING platform in Poland, adding that “we are determined to deliver on our promise of providing a differentiating and seamless client experience across the globe through new technologies and services.” The bank’s fully loaded common equity Tier 1 (CET1) ratio strengthened to 13.1% by the middle of 2016.

—Ralph Hamers, group CEO

www.ing.com

In a year marked by geopolitical tensions, market volatility and ultra-low interest rates, Nordea raised group operating profit in 2015 to €4.79 billion ($5.45 billion)—an increase of 7% over 2014, or 11% in local currencies. Lending margins were shaved, with net interest income down 7%, but fees and commissions rose 6%, and operating costs and net loan losses were significantly lower.

CEO Casper von Koskull comments: “Nordea has over the last decade delivered the most stable results in the Nordics, and last year our ROE [return on equity] of 12.3% was the highest since 2008. This strength and stability come from a diversified geographical exposure across eight home markets (including the Baltics) and a very broad product portfolio.

Digitalization has continued to be the main driver of change in retail banking, where we continuously develop new features and functionalities. Our wholesale banking business has secured a substantial lead-bank footprint in all the Nordic markets and number-one position overall, and our wealth management had the strongest financial result ever, as profits grew beyond €1 billion.” The group’s capital base again strengthened in 2016, with its CET1 ratio rising to 16.8% by midyear.

—Casper von Koskull, CEO

www.nordea.com

Erste Group turned around its massive €1.4 billion ($1.6 billion) loss in 2014 to report a net profit of €968.2 million in 2015. This was largely attributable to significantly lower risk costs, combined with a sharp decline in impairments to €729 million from more than €2 billion in 2014. The group’s nonperforming-loan ratio dropped to 7.1%, the lowest in five years, partly as a result of the successful sale of NPL portfolios in Croatia and Romania, but also because of a broad-based improvement in asset quality as economic growth accelerated to nearly 2% in Erste’s core Central and Eastern European markets. CEO Andreas Treichl says, “This confirmed the validity of our customer-centered business model and our strategy of positioning Erste Group as the leading retail bank in the EU’s eastern growth area.” Certainly, by focusing more tightly on Central Europe, Vienna-based Erste has avoided the heavy losses incurred by rival CEE banking franchises in Russia, Ukraine and the Balkans. Erste Group has continued to impress in the first half of 2016, with a net profit of €841.7 million, a core capital ratio of 13.3% and further improvement in asset quality.

—Andreas Treichl, CEO

www.erstegroup.com

Despite Latin America’s complex operating environment, BBVA remained profitable. In 2015 the bank posted an 8.7% rise in net attributable profit in South America, and 8.8% in Mexico. Market share of loans and deposits in Mexico was 23.4% and 23.2%, respectively, while in South America it was 10.4% for both categories. BBVA forged ahead with its goal of building the best digital bank of the 21st century, continuing a $2.5 billion technology investment plan throughout the region. Investments in social programs increased by 27% in Mexico and 7% in South America. Financial literacy remains its core corporate social responsibility focus globally.

—Francisco González, group executive chairman

www.bbva.com

Bank of China has always been the most international of China’s big banks. As conditions at home become more challenging, the bank is taking advantage of its international background to strengthen its presence in overseas markets and expand its trade finance and M&A advisory services. BOC has overseas branches in 46 countries and regions, accounting for 27% of total assets. Through this network, the bank is facilitating the investments of China’s largest companies, as they expand west as part of the country’s Belt and Road initiative. Last year BOC extended $28.6 billion in loans and other credits to such projects. BOC is also expanding south, with the help of its Hong Kong subsidiary. It has announced a plan to shift its assets in some Asean countries to BOCHK, effectively turning the subsidiary into a regional bank for Southeast Asia.

—Chen Siqing, vice chairman and president

www.boc.cn

Arab Bank’s global network of more than 600 branches on five continents is the most extensive of any bank in the Arab world. Founded in 1930, Arab Bank is the oldest financial institution in the region, with deep knowledge and relationships that enable it to serve niche markets in the Middle East and North Africa (MENA) better than any other bank.

—Nemeh Sabbagh, CEO

www.arabbank.com

Africa’s largest bank by assets, Standard Bank also does business under the Stanbic Bank brand. Based in South Africa, it is the leading liquidity provider for African currencies, operating in 20 countries across the continent and another dozen around the world—with a total of 1,221 branches and 8,815 ATMs. Normalized earnings for 2015 rose 34%, to $1.37 billion; assets increased 4%, to $128 billion. For the first six months of 2016, earnings rose 4.7%, to $808 million. While others are cutting back, Standard Bank remains focused on growth in Africa and its consumer markets, introducing innovative products such as contactless cards and mobile payment solutions. Standard Bank partnered with China’s leading mobile payment provider, WeChat Wallet, which will use the bank’s pan-African infrastructure to serve the continent. The bank also offers insurance and new risk products. Last year the bank disposed of a controlling interest in its British unit to Industrial and Commercial Bank of China, which also holds a 20% stake in the South African bank. Standard Bank expects to generate significant benefits from its strategic partnership with ICBC, and proceeds from the UK transaction will be used to strengthen its operations in Africa.

—Ben Kruger and Sim Tshabalala, group CEOs (joint)

www.standardbank.com

Serving a healthy client base in Boston’s fast-growing commercial real estate industry, Eastern Bank was ranked by a JD Power survey as the best bank in New England. In 2015, Eastern’s net income rose 14% to $62.6 million. The year ended with record levels of assets, deposits and loans—and the strongest credit quality in the bank’s 198-year history. At the end of the second quarter, Eastern’s assets surpassed $10 billion, a level that will trigger increased oversight from regulators.

—Richard Holbrook, chairman and CEO

www.easternbank.com

Based in Pittsburgh, Pennsylvania, PNC serves a super-regional client base spread across banking entities in 19 states and the District of Columbia. PNC holds more than 30 regional presidents responsible for delivering treasury management, real estate finance and other corporate banking products to Main Street. PNC reported net income of $989 million for the second quarter of 2016, up from $943 million in the first quarter, but below the $1.04 billion earned in the second quarter of 2015.

—William S. Demchak, chairman, president and CEO

www.pnc.com

Cincinnati, Ohio–based Fifth Third Bancorp has sought fast growth rates by opening new offices in New York, Boston, Philadelphia, Washington, Dallas, Houston and Los Angeles, says Kevin Lavender, managing director for large corporate and specialized lending at Fifth Third. While fulfilling its super-regional ambitions drove up expenses and net income was nearly flat in 2015, the bank still grew assets by 1.7%, to $140.1 billion. Second-quarter 2016 net income of $333 million was up 5.7% from $315 million in the second quarter of 2015.

—Greg D. Carmichael, president and CEO

www.53.com

Kansas City, Missouri–based Commerce Bancshares thinks of itself as a “super community bank” with branches in five states, says Kevin Barth, executive vice president for commercial lines of business. The bank spreads its risk by specializing in loans of less than $25 million to a wide range of local industries, from food processing to healthcare. Assets rose 1.7%, to $20.7 billion in 2015, the 47th year the bank raised regular cash dividends. Assets rose further to $24.7 billion as of June 30.

—David W. Kemper, chairman and CEO

www.commercebank.com

Based in Atlanta, SunTrust is expanding its investment banking and commercial banking arms nationwide. It is opening new branches across the country to serve its Southeast customers, who are spreading their wings in a wide range of industries, from financial technology to logistics to commercial real estate, says Mark Chancy, the bank’s wholesale banking executive. Assets were flat in 2015, at $190.8 billion, but rose to $199.1 billion as of June 30, 2016.

—William H. Rogers Jr, chairman and CEO

www.suntrust.com

Known for its expertise in the energy industry, Dallas, Texas–based Comerica maintains a branch network from Texas to Michigan and California to Florida. Total assets increased 3.9% in 2015, to $71.9 billion. Average loans grew by more than 4%, to $48.6 billion, mainly to companies in commercial real estate, technology and life sciences, and mortgage banks. Second quarter 2016 net income of $104 million was up from $60 million for the first quarter of 2016, but down from $135 million for the second quarter of 2015.

—Ralph W. Babb Jr, chairman and CEO

www.comerica.com

Based in Salt Lake City, Utah, Zions Bancorp spent much of 2015 consolidating charters among the networks of community banks it has acquired to form a super-regional bank in Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington and Wyoming, says James Abbott, director of investor relations at Zions.

Total assets grew 4% last year, to $60 billion. Second–quarter 2016 earnings of $91 million were up from $79 million for the first quarter of 2016, and compared to a loss of $1.1 million for the second quarter of 2015.

—Harris H. Simmons, chairman and CEO

www.zionsbancorp.com

San Francisco–based First Republic boosted its assets by a formidable 21% in 2015, to $59 billion, partly thanks to a 6.7% increase in loans to commercial businesses. Assets rose further to $64.7 billion as of June 30. The bank specializes in bridge loans for private equity and venture capital in Silicon Valley. First Republic has been run by management since a management buyout from Bank of America in 2010. Second-quarter earnings of $165 million were up 25.6% from the same period a year earlier.

—James H. Herbert II, chairman and CEO

www.firstrepublic.com