Best In Uncertain Times

Global Financeeditor at large Andrea Fiano's letter to you, the reader.

VOL. 37  NO. 5

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Presenting our annual Best Banks awards is particularly meaningful and challenging this year, given the recent turmoil in the sector in the US and Europe. Of course, we celebrate the best performers in banking, looking at different regions and individual countries and territories. These awards consider the healthiest side of the industry, not troubled institutions like Credit Suisse in Switzerland, or, in the US, Silicon Valley Bank and First Republic, now being absorbed by JPMorgan. And although the assessment is based on 2022 results, most of the winners kept pace through this year’s first quarter. Yet one wonders, in an era of worldwide rising rates that have not necessarily reached their peak, whether these latest bank results will be the best we will see for a while.

For now, the growth in income and revenue for most winners, together with the widespread effort to digitalize their activities and cut non-performing loans, is striking. Although there is no guarantee that all banking troubles are over, it is worthwhile to focus on banks that excel. And there is an abundance of them.

Meanwhile, banks aren’t the only ones hurt by tighter credit conditions. Obviously, corporates and consumers feel the pain, too. The focus of our cover story is managing liquidity, and, in general, how CFOs need to find new strategies for this new economic environment. The recent banking turmoil has made clear to all that we have entered a new economic phase, and that the era of “easy money” is over. Managing cash flow is now much harder than just a few months ago, as revenue declines while labor and supply costs rise. Many current CEOs and CFOs have never experienced such conditions. They will have to marshal discipline and ingenuity to succeed.

Andrea Fiano | Editor at Large