World’s Best Banks 2013: Europe

By Thomas Clouse, Jonathan Gregson, Antonio Guerrero & Gordon Platt


Europe remains mired in recession. Apart from Germany and the Nordics, major European economies are either flatlining or, as among the southern peripherals, contracting further as austerity bites. The prospect of deflation grows. The eurozone’s core gauge of inflation has dropped to 1.5%. And while the European Central Bank’s promise to do “whatever it takes” to save the euro staved off market worries, potential cures such as a single European Banking Union or the monetary financing of deficits remain distant.

The negative feedback loop between sovereign and bank continues in Southern Europe. Europe’s banks have therefore been reducing their assets and other liabilities, strengthening their capital base and cutting costs by shrinking branch networks in favor of digital conduits, in order to meet Basel III capital adequacy requirements. And they are hoarding more of their money at home, with bank cross-border flows shrinking by $3.7 trillion, of which intra-European flows account for $2.8 trillion. Those feeling the squeeze most are banks in Southern and southeastern Europe.




BNP Paribas

France’s biggest banks were undercapitalized and overexposed to Southern Europe when the financial crisis struck. Market leader BNP Paribas has gone farthest in righting that position, reducing its risk-weighted assets by a further €62 billion ($80 billion) in 2012. Its cost of risk fell dramatically while liquidity buffers improved more than twofold compared with the previous year-end. CEO Jean-Laurent Bonnafé observed that in a challenging environment for the entire banking industry, BNP Paribas succeeded in maintaining its client franchise, profitability and strong risk-management culture, while adapting the organization to changing market conditions and regulation. Operating revenues grew marginally in 2012, and there was a 4.7% increase in deposits. Net income rose from €6 billion to more than €6.5 billion. Looking ahead, BNP Paribas plans to expand its presence in Asia. The group’s capital base was strengthened; its Basel II Tier I capital ratio stands at 11%.

Jean-Laurent Bonnafé /



Bank Austria

With a history dating back to the 19th century, Bank Austria has been part of Italian-owned UniCredit Group since 2005. Total assets increased by 4.2% last year to €208 billion, while net interest income grew by 1.3%. Despite write-offs that dragged down pretax profits by 6.9%, return on equity nearly doubled to 2.4%. CEO Willibald Cernko said operating income in Austria was relatively stable and performance was supported by good asset quality and, consequently, a further decline in net write-downs of loans. The bank’s core Tier 1 ratio stood at 10.6% at year-end.

Willibald Cernko, CEO /


BNP Paribas

Despite France’s flatlining economy, the bank’s domestic retail arm managed to grow deposits by 4.7%, fueled by a near 10% increase in funds held in savings accounts. And while loan demand slowed, BNP Paribas grew its overall loan book by 1.5% during 2012, with lending to SMEs up by 2.7%. CEO Jean-Laurent Bonnafé highlighted the bank’s solid performance and excellent quality of its employees in this key domestic market. In 2012, Bonnafé said the bank continued to support the needs of its diverse client base in France, including corporates, individuals and SMEs, and continued to finance the real economy. Amid a low-interest-rate environment and weaker demand for loans, net interest and operating income both fell by 0.9%. The bank achieved a 1.7% reduction in its operating costs. “Going forward,” says Bonnafé, “we will continue to invest in technological and digital innovations that address our customers’ changing behavior. These will lead to a better customer experience and further improvements in operating efficiency.”

Jean-Laurent Bonnafé, CEO /


Deutsche Bank

Although most of its profits are generated outside Germany—and much of that comes from investment banking—Deutsche Bank remains close to its roots. “Our commitment to our home market, Germany, remains a cornerstone of our vision and strategy,” says Dirk Schmitz, co-head of corporate banking and securities, Germany.

According to preliminary results for 2012, group revenues were slightly up at €33.7 billion with improved performances from asset and wealth management, global transaction banking, and corporate banking and securities. The bank is introducing stricter centralized governance and controls for new spending, rationalizing its IT platform and accelerating capital demand reduction. Core bank provisions for credit losses were down by a third to just under €1.5 billion. Deutsche Bank strengthened its core Tier 1 capital ratio to 11.4%, which puts it ahead of schedule to reach the planned 8.5% ratio this summer. “In coming years,” says Schmitz, “we want to build an even stronger domestic bank, increase our client focus and improve client proximity.”

Anshu Jain and Jürgen Fitschen, co-chairmen of the management board /


National Bank of Greece

Against a background of deepening recession and technical insolvency, Greece’s banking sector is being propped up by a €16 billion bailout from the European Financial Stability Facility. After absorbing Eurobank, National Bank of Greece is the largest player, and so, by the criteria of being “too big to fail,” NBG wins this year’s award. Last year it took big hits from the haircut on Greek government bonds and massive restructuring. The bank is in workout mode, cutting costs, making heavy provisions for bad loans and trading losses, and, most recently, announcing a 15% reduction in staff levels. The latest third-quarter figures show nonperforming loans rose to 18% from 11% against the same period in 2011. This, however, is significantly better than the average 22% ratio across the Greek banks. As for profitability, NBG’s losses nearly doubled to €2.46 billion.

Alexandros Tourkolias, CEO /


Bank of Ireland

Ireland may be the poster boy of Europe’s struggling peripherals, but the combined impacts of austerity and a collapsed housing market make it a tough place to be a banker. Yet Bank of Ireland’s group chief executive, Richie Boucher, reports making good progress against its strategic objectives by enhancing core franchises and rebuilding profitability within a restructured, robust balance sheet.

The bank has a 40% market share of new mortgage lending and is restructuring those in arrears. Lending to SMEs grew by 16% in 2012. An operating profit of €242 million morphed into a €1.46 billion underlying loss after impairments and other charges. But the main task is rebuilding the balance sheet, and here Boucher points to further progress in deleveraging. “We completed €10.6 billion of asset divestments ahead of schedule,” he says, adding that good growth in deposits contributed to the strengthening of its loan-to-deposit ratio to 123%. “We have improved our funding position and reduced the group’s utilization of wholesale funding by €15 billion during 2012. We successfully re-accessed funding markets across the capital structure.”

Richie Boucher, CEO /


Intesa Sanpaolo

Intesa Sanpaolo, the country’s oldest and still leading banking group with nearly 11 million customers and 5,300 branches, increased its operating income by 6.5% thanks to a 17.3% improvement in operating margins and a 2.6% reduction in costs. Deposits from the baking business rose by 5.6%. The bank’s Tier 1 capital ratio strengthened from 10.1% to 11.2% at year-end. “In light of the difficult and highly volatile landscape,” observed CEO Enrico Tommaso Cucchiani, “we decided to pursue a prudent strategy and defined a set of clear management priorities privileging balance sheet and liquidity strength to achieve sustainable profitability.” He says the group is performing in line with or better than its main European peers on most indicators.

Enrico Tommaso Cucchiani, CEO /


Banque et Caisse d’Epargne de l’Etat

Even in such an overbanked country as Luxembourg (banking assets are 22 times GDP) state-owned BCEE has a large domestic presence, with half of all residents considering it as their principal bank. Founded in 1856, BCEE remains something of a national institution. Customer deposits increased by nearly 20% to the last year-end, although the bank acknowledged that a portion of this increase could be attributed to short-term deposits. Customer loans and advances grew by 7.4% on the back of strong mortgage demand, commission income rose by nearly 10%, overall banking income increased by 6% to nearly €300 million, and net earnings were up 13.2% to close at €127 million. The bank’s core Tier 1 capital ratio stood at 16.2%.

Jean-Claude Finck, president and CEO /


Bank of Valletta

The island’s largest bank lifted pretax profits by 72% to €110.7 million, largely on the back of increased lending activity and a 7.7% improvement in interest income. Amid fierce competition for deposits, Bank of Valletta grew these by 5.2% over the year to end with a record €5.8 billion. The bank’s operating profit rose by 44.7%, and impairment charges were raised by 42%. Nonperforming loans were reduced from 5.1% to 4.4% of the portfolio. Chairman Frederick Bonnici said the bank would remain cautious in its approach to provisioning and continue to give strategic priority to capital management. He noted that its core Tier 1 ratio had strengthened to 10.7%, and that, barring unforeseen circumstances and assuming current core profitability levels, the bank will achieve full compliance with Basel III capital requirements within the stipulated time frame through profit retention alone.

Charles Borg, CEO /



Restructuring is in full swing at ING, the global banking and insurance group that needed a Dutch government bailout four years back. Divestments continued last year, including ING Direct franchises abroad and investment management units in Asia, prior to the complete separation of its banking and insurance arms. ING has repaid €7.8 billion of the €10 billion of capital injected by the state and booked more than €1 billion in restructuring costs (as against just €60 million in 2011) in order to gain annual savings of some €200 million by late 2015. Active de-risking and stronger provisioning—up by more than €500 million to €2.1 billion—meant net results were almost down by a third at €3.9 billion. But ING strengthened its Basel III core Tier 1 ratio from 9.6% to 11.9%. Chairman Jan Hommen commented that through challenging times ING had become financially stronger. “We are now a more agile bank with a sharper focus on our key markets, such as the Netherlands.”

Jan Hommen, chairman /

“We are now a more agile bank with a sharper focus on our key markets, such as the Netherlands.”

– Jan Hommen, ING


Banco Santander Totta

Last year Santander Totta was the only one of the top five Portuguese banks not to seek a public or private share capital injection. Improved profitability was reflected in a year-on-year jump in return on equity from 1.5% to 12.9%. CEO António Vieira Monteiro said in spite of the economic recession that conditioned the country in 2012, Santander Totta was able to strengthen the solidity of its accounts, attaining a 12.3% core capital ratio, and significantly increased its net income to just over €250 million. He attributes a significant part of this to an almost doubling of recurring income from domestic commercial banking to €115 million and strong growth in deposits. Meanwhile, operating expenses were reduced by almost 10%.

António Vieira Monteiro, CEO /



Spain’s economy is in austerity-driven recession (the OECD expects it to shrink a further 1.4% this year), its government avoiding a formal bailout and its regional and savings banks suffering from the collapse of a real estate bubble. Add in the threat to uninsured depositors following the Cyprus debacle and it is understandable that there is a “flight to quality”—namely, the large banks like BBVA with overseas earnings and strong balance sheets. Chairman and CEO Francisco González believes this year is BBVA’s moment. He acknowledges that 2013 will be a difficult year for Spain as a whole but is of the opinion that this crisis could be a great opportunity to build a new European Union and a Spanish economy on more sound and competitive grounds. He also points out that throughout the crisis BBVA did not cost the taxpayer a dime. Last year the bank increased its assets by 6.7% to nearly €640 billion, customer deposits were up 3.7%, and lending rose by a restrained 1.7%. Net interest income rose by 12.3% in the third quarter. BBVA paid back €8 billion in loans from the European Central Bank. Its bad loans book in Spain increased, but not nearly so much as other Spanish banks. The bank’s Tier 1 capital adequacy ratio stood close to 11% at year-end.

Francisco González, chairman and CEO /


Credit Suisse

Hans-Ulrich Meister, joint head of private banking and wealth management and CEO (region Switzerland), stressed Credit Suisse’s role as a trusted partner to clients in its home market. It achieved this in its business with private, corporate and institutional clients in Switzerland and in its asset management business—as well as in investment banking—by identifying clients’ diverse needs and providing them with appropriate financial solutions. He said the bank had also adapted its business model to the changing regulatory environment, focusing on less-capital-intensive, fee-earning activities like global wealth and asset management, and running a universal bank in Switzerland. Deleveraging continues, both in terms of total assets and risk-weighted assets, which were reduced by SFR55 billion ($59 billion) to SFR284 billion at the year-end, while operating costs were down 4% to SFR21.5 billion. Underlying pretax income was just over SFR5 billion—more than double the previous year. The bank’s core Tier 1 ratio strengthened from 10.7% to 15.5%.

Brady Dougan, CEO /



Under previous CEO, Bob Diamond, Barclays was known for its high-risk/high-bonus culture and involvement in the Libor rigging scandal. Enter new CEO, Antony Jenkins, with plans to reduce high-risk/capital-intensive operations, curb top pay and bonuses and drive down costs. “We are turning the organization around, with a clear purpose and common values,” says Jenkins. “We are reshaping the business to generate sustainable returns, making long-term changes to our culture, rewards, controls and costs to allow us to sustain that return in future.” Bonuses paid in 2012 were down 16% and overall cost/income ratio improved from 71% in 2011 to 62% last year. Impairment charges were down by 5%, net operating income was 3% better, and adjusted pretax profits (including disposals) were up 26%. The bank’s core Tier 1 ratio was steady at 10.9% at year-end.

Antony Jenkins, CEO /

“We are reshaping the business to generate sustainable returns, making long-term changes to our culture, rewards, controls and costs to allow us to sustain that return in future.”

– Antony Jenkins, Barclays




The Nordic region’s largest financial group, with 11 million customers and total assets of some €677 billion, Nordea broke all previous records in 2012 in terms of the number of customers, the group’s capital base and profitability. Certainly, the health of most Scandinavian economies and their status as safe havens (particularly those outside the eurozone) helped. Nordea’s ability to grow its operating income by 8% and profits by 11%, to just short of €1.1 billion, is impressive. Return on assets increased to 11.6% and the capital base strengthened. The group’s core Tier 1 ratio stood at 13.1% at year-end. Group CEO Christian Clausen says the bank will further develop its customer relations, and will continue to improve cost and capital efficiency in the years to come. “Our plan is to improve capital and liquidity buffers and achieve a return on equity well above the cost of capital, creating a sustainable bank that continues to attract competitive funding, promote new technology and drive efficiency.”

Christian Clausen, CEO /

“Our plan is to improve capital and liquidity buffers and achieve a return on equity well above the cost of capital.”

– Christian Clausen, Nordea



Danske Bank

The bursting of Denmark’s real estate bubble wrought havoc with some local banks. Danske Bank weathered the storm better than most and last year grew its total income by 10% to DKr47.7 billion ($8 billion). Pretax profit more than doubled to DKr8.6 billion, the best results the bank has posted since 2007. Cost cutting and internal efficiencies brought the bank’s cost/income ratio down to below 56% from 60% the previous year. Loan impairment charges were down 5%. CEO and chairman Eivind Kolding says: “The earnings and cost initiatives, together with improved conditions in the capital markets, have brought about improvements in 2012. We are in full swing with the implementation that will ensure we achieve our targets in 2015.” The bank’s core Tier 1 capital ratio stood at 14.5%.

Eivind Kolding, chairman and CEO /



Although the Finnish economy dipped slightly in 2012, Nordea grew its operating income from €2.6 billion to €2.8 billion. Profit before loan losses grew by €108 million to €1.8 billion. Write-offs doubled to €144 million, and interest margins were squeezed, but Nordea reduced its cost/income ratio to 38%. “We started to build the bank of the future early,” says Ari Kaperi, senior country executive, “and we are on the right track, but a lot remains to be done.” The bank’s Tier 1 capital ratio rose from just short of 13% to 18%, while return on equity was boosted from 9.6% to 11.4%.

Ari Kaperi, senior country executive /


Nordea Bank Norge

Norway continues to have the strongest economy among the Nordics, and NBN put in a sparkling performance last year. Net profit rose by 32% to NKr4.4 billion ($769 million) thanks to higher income, flat costs and a 33% reduction in loan losses. The bank reduced its operating expenses by 5%, while net interest income grew 7%. Country senior executive Gunn Waersted, believes that the bank’s strong customer focus and high operational efficiency is the right strategy for shaping the future relationship bank. The bank’s core Tier 1 capital improved to 14.1% from 10.1% in 2011.

Gunn Waersted, country senior executive /


Nordea Hypotek

Nordea’s Swedish operations turned in good figures for 2012. Net interest income rose by nearly a third to SKr4.2 billion ($652 million), fee and commission income was marginally down because of a charge for payment to the state stabilization fund, and costs held steady at SKr487 million. Operating income rose by a billion to almost SKr4.1 billion, while profits jumped by 32.7% to SKr3.6 billion. “Our determination to stand by our customers through the financial crisis,” says country senior executive Lennart Jacobsen, “and our focus on cost efficiency, is a solid foundation for our stability and reliability.”

Lennart Jacobsen, senior country executive /




Raiffeisen Bank International

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“Stepic, RBI: The general economic environment again deteriorated. The necessary measures to meet the regulatory requirements of the European Banking Authority kept us busy during the first half of the year. These factors considered, we delivered a good result.”

– Herbert Stepic, CEO, Raiffeisen Bank International


With a strong presence in 17 CEE countries—of which six of its banks are among the top three by market share—RBI coped well with adverse economic developments, particularly in southeastern Europe. “There were a number of factors that made 2012 tough,” says CEO Herbert Stepic. “The general economic environment again deteriorated. The necessary measures to meet the regulatory requirements of the European Banking Authority kept us busy during the first half of the year.” He said they achieved two important objectives: increase in core Tier 1 capital ratio (from 9% at year-end 2011 to 10.7%) and stabilization of costs. The volume of customer loans grew by 2.2% to €83.3 billion ($107 billion), and fee and commission income rose from €1.47 billion to €1.52 billion, but net interest income declined marginally to €47 billion as margins eroded across the region.

Herbert Stepic, CEO /



Raiffeisen Bank Albania

The largest bank in Albania by asset value, Raiffeisen maintained its leading position in the business loan sector with a market share of nearly a quarter. Gross income from the corporate sector was the highest since Raiffeisen International privatized the formerly state-owned savings bank in 2004. Deposits from customers increased by 15% in 2012 to the end of the third quarter and, while profit before tax fell slightly, return on equity before tax improved. CEO Christian Canacaris notes that the bank was the first to offer asset management in Albania last year.

Christian Canacaris, CEO /



With $15 billion in assets, Belarusbank confirmed its leading position in the country’s banking sector. Deposits from retail clients increased to 46.5%; in retail lending the bank retained market share above 70%, and corporate loans increased to more than 32%. The quality of the bank’s loan portfolio improved with overdue debt on loans down by 12%. Net profits came in above $140 million, compared with a loss the previous year of more than $300 million. Belarusbank accounted for almost a quarter of profits in the country’s banking sector.

Siarhei Pisaryk, CEO /


Raiffeisen Bank dd Bosnia i Herzegovina

Raiffeisen is the largest stand-alone bank in Bosnia by assets and comes in second in terms of its capital base, deposits and profits. In 2012 the bank reduced its asset base by 7.2% to just under €2 billion. Loans and advances to customers declined by 4.8%, while net interest margins held steady at 3.5%, as did the bank’s 11% return on equity. The bank has concentrated on introducing new products with a focus on technology-based solutions in the deposit, credit and card business areas. Savings from private individuals were up by more than 5%, while credit cards and business cards grew by 22% and 15%, respectively. CEO Michael Müller says the bank will continue to develop new products and enhance existing services and distribution channels.

Michael Müller, CEO /


UniCredit Bulbank

With more than 1.3 million customers and the largest asset base of any bank in Bulgaria, UniCredit Bulbank is market leader in loans, deposits and corporate banking. Savings were up by 12.7% in 2012 and household debt dropped to its lowest level since 2007. The bank is benefiting from its strengths in leasing and facilitating transaction growth via mobile banking and new systems to improve customer relationship management. It is also targeting micro and small enterprises, especially in Bulgaria’s important agricultural sector. The bank has been developing its risk management processes, and its credit rating is among the highest of any financial group in Bulgaria.

Levon Hampartzoumian, CEO /


Privedna banka Zagreb

The second-largest banking group in Croatia, PBZ had a market share of 17.2% of total banking assets at year-end 2012, a rise of 1.4% on the previous year. Market share rose to 30% in its credit card operations, a sector where it is market leader and expects to see continued growth. Italian group Intesa Sanpaolo owns more than 75% of PBZ’s share capital. The Croatian operation generated a 7.5% return on equity in 2012. At year-end its capital adequacy ratio was 21.7%.

Božo Prka, president of the management board /


Česká Spořitelna

Despite a slowing business segment, which resulted in lower fee income, Česká Spořitelna (part of Erste Group) posted a 13.5% improvement in net profits in 2012 to €61.7 million—equivalent to a 16% gain in local currency terms. The bank’s operating result was 3.4% lower than in 2011, and net interest income declined slightly. This was more than offset by lower risk positions and improvement in the bank’s portfolio quality, allowing a 34% drop in risk provisions, while currency-adjusted income from financial assets rose by 16%. Although the bank’s headcount increased by 3%, operating expenses were down and the bank’s cost/income ratio remained stable.

Pavel Kysilka, chairman of the management board /



One of the smaller Scandinavian banks operating in Estonia, Norwegian-owned DnB is growing fast. Last year its loan book increased by 13.4%, while deposits more than doubled to €226.7 million. The bank was restructured from branch to local bank status, and a €90 million capital strengthening was implemented, while an upturn in the local economy allowed it to reduce provisions significantly. Impressively, the bank’s net profit of €6.3 million was five times larger than the previous year’s. “We have successfully increased our business volumes in both the areas of corporate financing and leasing,” says general manager Hans Pajoma, adding that thanks to the improved economic environment, the number of problematic loans decreased, which benefited the results.

Hans Pajoma, general manager /

“We have successfully increased our business volumes in both the areas of corporate financing and leasing.”

– Hans Pajoma, DnB


OTP Bank

Amid Hungary’s challenging macroeconomic background—GDP contracted by 1.7% year-on-year—and a difficult regulatory environment, OTP strengthened its capital base to meet the European Banking Authority’s 9% core Tier 1 requirement. Preliminary results for 2012 suggest that total assets shrank slightly to 10.1 billion forints ($43 million), while operating profits dropped by 6% as a result of lower interest income caused by narrowing margins and the early repayment of foreign currency mortgages. The Hungarian banking group posted strong underlying profits that, after tax and adjustments, came out at 150 billion forints. Return on assets declined slightly to 10.2%. The bank’s core Tier 1 capital ratio stood at 14.7%, and provision coverage of nonperforming loans was at its highest since 2008.

Sándor Csányi, chairman and CEO /


Raiffeisen Bank Kosovo

Raiffeisen Bank Kosovo has one of the country’s widest distribution channels. The bank remains the country’s largest creditor to corporate customers, with a market share of more than 50%. Total assets shrunk by 7.5% during 2012, and deposits from customers decreased by approximately 10%. Nonperforming loans fell to 8.5% of the portfolio. Robert Wright, CEO, intends to build upon this performance, saying that further financial support for all customer segments, the development of leading-edge electronic banking facilities and excellent customer service will continue to be its top priorities in 2013.

Robert Wright, CEO /


SEB Latvia

While SEB Latvia saw its net interest income decline slightly, owing to lower interest rates and tighter margins, this shortfall was more than compensated for by rising fee and commission revenues. Staff costs and other expenses were pared back, resulting in a 1% drop in overall expenses. Overall operating income grew by 2%, and operating profit before credit provisions by 6%; but the bank’s prudent approach to provisioning meant this translated into a 22% decline in profitability when expressed in local currency.

Ainars Ozols, CEO /


Nordea Banka Lietuva

Nordea is fourth among banks operating in Lithuania in terms of size, but it is one of the fastest-growing. According to its unaudited accounts, last year the bank’s assets grew by 3.3% and it posted a 23.7% rise in net profits. Deposits from individuals and corporates rose by nearly 22% and 12%, respectively. “An improvement in the quality of the loan portfolio last year gave reasons for optimism,” says head of banking at Nordea Banka Lietuva, Inga Skisaker. “Although deposit interest rates are at a record low, residents who have deposits in our bank find security is a top priority. This year we will pay even more attention to deposits, savings products and daily banking services.”

Inga Skisaker, head of banking /


Komercijalna Banka AD Skopje

Last year’s operating profit grew by more than a quarter, thanks to an increase in operating income and lower expenses. Net profit, however, was down nearly a half on the previous year to just over 560 million denari ($12 million). Net interest income increased by nearly 7%, while approved customer loans were up over 6% and customer deposits, by 3.4%. Equity capital and reserves grew by 0.7%, owing in part to the allocation of the previous year’s profits.

Hari Kostov, CEO /


Moldova Agroindbank

Established more than 20 years ago, Moldova Agroindbank continues to hold a leading position in the country’s banking sector. At the end of 2011, it held a market share of nearly 20% of total assets and more than 20% of total loans and deposits. The bank continues to expand its network of ATMs and point-of-sale terminals and also has one of Moldova’s largest branch networks. Moldova relies heavily on imports to satisfy its energy needs, and at the end of last year the EBRD extended two credit lines to the bank to fund the implementation of energy-saving projects.

Natalia Vrabie, chairman /


BRE Bank

The third-largest bank in Poland, BRE expanded its asset base last year to over 100 billion zloty ($30 billion)—an all-time high. Last year was the bank’s most successful year since it was established a quarter of a century ago, with net profits rising by 6% to more than 1.2 billion zloty. Its retail brand, mBank, the first and largest online bank in Poland, and MultiBank, established in 2001 to provide banking services for middle class individuals and microbusinesses, saw significant growth in their client base, which collectively amounted to more than three million customers. BRE improved its core Tier 1 ratio to 13% and already meets all Basel III requirements. Gross return on equity remains a healthy 17.9%.

Cezary Stypulkowski, CEO and president /


Raiffeisen Bank Romania

An economic slowdown in Romania, which saw nonperforming loans across the banking sector rise above 17%, explains why Raiffeisen Romania’s total assets were pared back by 3.2% to €6.1 billion. Nonetheless, the bank performed well. Operating income grew by 1.3% to €346 million, while return on equity increased to just over 20%. The bank made significant cost reductions and gained retail market share, especially among students, individual employees and pensioners. The corporate and SME markets remain challenging, and the overall ratio of nonperforming loans increased to more than 10%.

Steven Cornelis van Groningen, CEO /



Thanks to higher fees, net interest and commission income, Russia’s largest bank, state-controlled Sberbank, increased its operating profit to more than 900 billion rubles ($28 billion) in 2012. Net profit increased by 10% to 350 billion rubles; assets increased by nearly 40% (including a 12.6% owing to overseas acquisitions). Excluding these, the retail loan portfolio grew by more than 40%, yet the NPL portfolio improved significantly. Chief executive officer and chairman of the management board Herman Gref says despite continued global volatility and market uncertainty, the bank continued to grow its business both in Russia and internationally.

Herman Gref, CEO and chairman /


Raiffeisen Bank Serbia

After 11 years in Serbia, Raiffeisen holds a market share of more than 15%. Cash loans rose by around 13% in 2012, with the level of nonperforming loans at just under 5%, which is well below the market average. The bank remains committed to a prudent risk strategy, to which it attributes its proportion of nonperforming loans, standing at just under 14% of its portfolio, compared with a market average of 19.5%. Although net interest margins were squeezed last year to just over 4%, the bank raised its return on equity by close to 12% thanks to fee income and cost efficiencies.

Oliver Roegl, CEO /


Slovenská sporitel’ňa

The Slovakian banking sector saw a near 30% decline in profitability over the year, mainly due to higher provisioning against bad loans. The country’s largest bank, Slovenská sporitel’ňa, fared better than most thanks to its retail orientation and 2.5 million customers. Net assets grew by 6%, interest income by 4%, fee and commission income by 2%, all contributing towards a 4% rise in operating profits.

Joseph Sikela, chairman and CEO /


Nova Ljubljanska Banka

Recession in Slovenia is expected to continue through this year. The economy shrank by 2.3% last year, the cost of two-year government debt tripled in a week, and 10-year yields rose above 6%. The IMF considers the banking sector, whose combined assets represent 130% of GDP, as being “under severe distress.” Slovenia’s largest bank, Nova Ljubljanska Banka, is shoring up its defenses. The president of its management board, Janko Medja, says: “Crucial for NLB this year will be reconstruction and consolidation subject to crisis management.” Before loan losses and provisions, NLB increased its operating profits to €318 million, which is €130 million more than in 2011. The asset base shrank by 11% to €11.5 billion, and a 6% saving in costs was achieved. After write-offs and provisioning, the bank reported a €305 million loss. The core Tier 1 capital ratio strengthened to 8.7%.

Janko Medja, president of the management board /


Garanti Bank

“Weakening global demand in 2012,” observes Garanti Bank’s president and CEO Ergun Özen, “was reflected in Turkey as deceleration in economic growth was brought about by the policies of the Central Bank of Turkey aiming for a soft landing.” Yet, Garanti Bank grew its asset base by 10% and recorded improvements in both net interest and commission income. Pretax income grew marginally, producing a net profit for 2012 of 3.1 billion lira. The bank strengthened its capital base, raising shareholders’ equity by 21%, so that at year-end its Basel II capital adequacy ratio stood at 17%. Özen points to Garanti Bank’s having secured its syndication loan at the lowest cost among Turkish banks as testament to its high liquidity and strong asset quality. He added that its growth-oriented strategy, strong international banking network and capability in creating new businesses were the main driving forces behind this outcome.

Ergun Özen, president and CEO /



Founded in 1992, PrivatBank is the largest privately owned bank in the Ukraine. It is market leader in the nation’s retail banking, and last year grew its customer base to more than 180 million individuals. It also counts 137 enterprises and more than 600,000 private entrepreneurs among its clients. Nearly half of all residents in the Ukraine use the bank’s services in some form. According to the latest provisional accounts, the bank’s total assets increased by 19% last year and net profit, to 1.5 billion hryvnia—a record for the Ukraine’s banking sector.

Alexander Dubilet, CEO /