Banker International Awards has now been finalised. In all,
there are 15 categories and 75 nominees, with groups such as HSBC,
BBVA, Chase, Wells Fargo and Bank of America nominated at least
twice. Winners will be announced in the next issue – and at the
RBI awards ceremony.
BEST RETAIL BANK – GLOBAL
Go deeper with GlobalData
BBVA
BBVA recorded an impressive 30 percent rise in annual profit last
year, and is in very bullish form. Including one-off items, profits
were up 29.4 percent to €6.1 billion ($9 billion) in 2007. The
cost-income ratio stood at 43.2 percent, including Compass
Bancshares in the US, compared to 44 percent a year earlier. All
four business divisions reported improvements: its Spain &
Portugal unit had its best year ever, lifting net attributable
profit 24.9 percent, while BBVA’s Mexico & USA division
recorded a sharp rise in business activity, with increases of more
than 28 percent in operating profit. And operating profit at BBVA’s
South America unit was up 33.3 percent. Smart deals with CITIC in
Hong Kong and China have added a lucrative, global
perspective.
HSBC
Due to its size and geographic spread, HSBC remains one of the most
fascinating banks to watch. It pulled in $24.21 billion in annual
profit last year after $17.24 billion in bad subprime loan
write-offs. And while US, UK and European businesses falter, it is
now focusing heavily on the Asia-Pacific market (see Best
Retail Bank – Asia below). It has just announced a $200
million push into Russia, and last year extended its reach in India
and, significantly, China. The biggest news in China, moreover, is
the seeming desire for HSBC and Bank of Communications, the
country’s fifth-largest player, to increase the former’s holding
from 19 percent to 40 percent. At that level of involvement, HSBC
would be the first non-Chinese bank to take on the might of the Big
Four state-owned giants.
Santander
Spain’s largest bank posted a 19 percent rise in annual profits in
2007 to €9.06 billion. It also moved up the rankings to become the
second largest bank in Europe by market cap behind HSBC, a
testament to the group’s aggressive global expansion strategy.
Santander is the largest financial group in Spain and Latin
America, and is the sixth-largest bank in the UK. Through Santander
Consumer Finance, it also operates a leading consumer finance
franchise in 14 European countries and the US. Its part in the
take-over of ABN AMRO – and the subsequent sale of Antonveneta –
has been hailed as a success, and has given the group an even
stronger position in Brazil. Santander says it now has 65 million
customers and 13,000 branches around the world.
Standard Chartered
Standard Chartered had its best ever year in 2007, posting record
pre-tax profits of $4.04 billion for 2007, up 27 percent compared
with 2006. The bank’s retail arm delivered a 26 percent increase in
pre-tax profit for the year to $1.68 billion. The group’s biggest
single business, consumer banking in Hong Kong, delivered a 22
percent increase in profits, the first time in six years it has
achieved double-digit income growth. Including the bank’s wholesale
banking arm in Hong Kong, the region contributed profits up 34
percent to just under $1.2 billion. The bank’s Indian retail arm
provided another highlight, breaking through $1 billion in income
for the first time (see Flushed with success).
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataUniCredit
Suddenly, UniCredit is a major force to be reckoned with. The big
move was the quick €22 billion merger with Capitalia last year,
creating that most trendiest of European banking entities, a
‘national champion’. But UniCredit is much more than that now, it
is a pan-European champion, with strong businesses in Italy,
Germany, Austria and across Central and Eastern Europe, from
Poland, Turkey, Russia to Kazakhstan. Annual 2007 results were
good, given the busy year the bank has had: net profit of €6
billion, an increase of 9.4 percent year-on-year and of 14.7
percent on a like-for-like basis. Almost all of the divisions made
strong contributions: once again UniCredit’s CEE and Poland unit
reported excellent performances (with increases of 28 percent
year-on-year and 16 percent, respectively). The division which made
the largest contribution to the consolidated results was Retail,
which grew 16.4 percent year-on-year.
BEST RETAIL BANK – US
Bank of America
With the $21 billion purchase of LaSalle from ABN AMRO and the
ongoing deal to buy Countrywide Financial, Bank of America has
cemented its place at the top of the US retail banking market.
Complementing its number one position in checking accounts,
savings, cards and personal loans, it will now lead in terms of
mortgages, thanks to Countrywide, and look to focus on cross
selling across its vast customer base. A $5.44 billion
fourth-quarter trading loss pulled BofA’s 2007 figures down 29
percent to $14.98 billion from $21.13 billion a year earlier. But
total retail sales increased 9 percent to 49 million products,
including strong growth in checking and savings products, first
mortgage and online banking activations. Year-end retail deposits
increased nearly $48 billion, or 10 percent, on higher account
balances, new account growth and acquisitions.
Chase
In a year dominated by the subprime fall-out, JPMorgan Chase bucked
the near-universal trend for weak annual results and reported
record profits for 2007. Its performance was boosted by organic
growth within its Chase retail arm, with increases in deposits,
checking accounts and mortgage originations. Chase’s retail banking
highlights included checking accounts totalling 10.8 million, up
844,000, or 8 percent compared with year-end 2006; average total
deposits up 4 percent to $208.5 billion; mortgage loan originations
at $40.0 billion, up 34 percent year-on-year; and credit cards
issued at Chase branches in 2007 up 34 percent. At the end of 2007,
JPMorgan Chase overtook embattled Citi to rank as the
second-largest US bank by market capitalisation ($147.0 billion,
down 12 percent for the year compared to Citi’s $140.7 billion,
down a huge 48 percent). Behind Chase is the company’s highly
confident CEO, Jamie Dimon.
Toronto-Dominion
Toronto-Dominion was the best performing Canadian bank last year,
largely avoiding the subprime malaise south of the border and
reporting a 44 percent rise in fourth-quarter profits and a 24
percent increase in net income for fiscal 2007. Indeed, TD expanded
its US exposure with the purchase of highly customer-centric
Commerce Bank (see Best M&A Deal of the Year). TD
expects to earn about C$1 billion from its US consumer and
brokerage businesses next year, boosted by Commerce Bank – and
along with its established TD Banknorth US retail banking
subsidiary, the addition of Commerce will double the size of TD’s
US retail business. TD will have more than 2,100 branches (444 from
Commerce) in North America, making it the seventh-largest bank in
North America by number of branches. It will have $312 billion in
deposits and some $458 billion in assets.
US Bank
US Bank, with its famous ‘guaranteed five star service’, reported
net income of $942 million for the fourth quarter of 2007, compared
with $1.19 billion for the fourth quarter of 2006. But in a very
difficult year for US banks, US Bank managed to top the tables in
terms of return on assets and return on equity (see RBI
586). US Bank, the sixth-largest US group by assets, may lack
the scale of the likes of Bank of America and Chase but it does
differentiate itself from them in some quite bold ways – it gives
great autonomy to branch managers, for instance, with profit and
loss accounted for at the branch level. Like Commerce Bank (see
TD above), US Bank offers highly customer-centric Power
Banking in key markets; it also has a range of sales-led
initiatives including its BLAST programme (BLAST stands for Banker
Leads Alerts & Sales Tools). US Bank has well-developed
businesses in certain fields, including in-store banking, affinity
cards, prepaid cards and on-site banking at universities. One of
the big pushes in 2008 is developing retail banking product
bundles.
Wells Fargo
Sale-and-service led Wells Fargo took a 4 percent drop in net
income for the year ($8.06 billion compared with $8.42 billion in
2006) as a result of a fourth-quarter profit fall of 38 percent,
its first quarterly decline in more than six years. But the San
Francisco-based group benefitted from record core retail banking
product sales of 19.7 million items, up 11 percent from 2006. It
also registered core sales per retail banker of 4.93 per day, up
from 4.75 in 2006 on a comparable basis; a cross-sell ratio of 5.5
products per household; and sales of the bundled service Wells
Fargo Packages (a checking account and at least three other
products) up 21 percent from 2006, purchased by 69 percent of new
checking account customers.
BEST RETAIL BANK – EMEA
Erste Group
Does Erste have the most cohesive CEE franchise? Austria’s Erste
Group registered record profitability and efficiency in 2007. Net
profit grew by 26 percent to €1.17 billion. In the fourth quarter
it achieved the best quarterly net profit in its history (€336.8
million). Of all its Central and Eastern European units, Banca
Comercială Română in Romania is the jewel, achieving adjusted net
profit for 2007 of €362 million, up 42 percent. But along with
Romania, Erste has established operations in the Czech Republic,
Hungary, Croatia and Ukraine, among others – in all it has 16
million customers across its CEE footprint. Erste says its robust
retail banking business model will prove resilient going forward
and has confirmed its earnings growth outlooks for 2008 and 2009 of
at least 20 percent and 25 percent, respectively.
Intesa Sanpaolo
Intesa Sanpaolo, Italy’s largest retail banking group, was
officially formed on 1 January 2007 and, unsurprisingly, last year
was spent largely integrating the two halves into a bigger, better,
bolder whole. This new entity is already making big waves: it was
tipped as a strong merger partner with Société Générale after the
latter’s trading scandal and remains bigger in Italy than the
bullish UniCredit post-Capitalia. For Intesa Sanpaolo, it’s the
future not the past that is driving it forward, the opportunity to
dominate in Italy as well as across its substantial Central,
Southern and Eastern Europe franchise. In post-consolidation,
high-banking-fees Italy, Intesa Sanpaolo seems to be upping its
game: its latest product release was a fee-free mortgage transfer
offer to the customers of other Italian banks.
La Caixa
La Caixa could well suffer in a possible Spanish economic down-turn
but it remains one of the country’s best players and one of the
biggest – it has a whopping 5,480 branches. The number of la
Caixa’s cards in circulation reached 9.8 million in 2007, an
increase of 802,000, while bankcard turnover increased by 12.8
percent, claiming a market share of 17.6 percent. And despite the
large physical network, transactions via self-service terminals and
the internet increased by 25 percent, representing 51 percent of
the total figure (see Best Multi-Channel category). Like
other Spanish cajas such as Caja Navarra (see also CSR category
below), la Caixa has an established, significant social
investment programme – it has already €500 million allocated to
welfare projects for 2008. Last year also saw la Caixa expand
overseas – it bought an 8.9 percent stake in Hong Kong-based Bank
of East Asia for €628 million.
Santander
Santander continues to deliver at Abbey, its UK subsidiary,
increasing profit by 20 percent last year while cutting the
efficiency ratio to about 50 percent, down from 70 percent at the
time of the Abbey acquisition. The bulk of the rollout to Abbey of
Santander’s well-know Partenon banking platform occurred in 2007
and will be completed in 2008. Santander’s business model for
managing branches, which includes performance targets and
incentives for staff, structured work goals and processes, is being
rolled out in Abbey branches under the banner ‘Flame’. In Spain,
Santander continued and broadened its ‘We Want To Be Your Bank’
strategy, offering zero service commissions to customers with a
current account, direct payroll or pension deposit, pension plan or
mortgage with the bank. Under the two-year old plan, capture of new
customers has nearly doubled, churn (loss of customers) has fallen
by half and customer satisfaction has soared to 94 percent. New
linkage (cross-selling of one or more products) has increased
fourfold. Overall, Santander’s focus on technology and tight cost
controls has allowed it to improve its efficiency ratio to 44
percent, including Abbey (see Best Retail Bank – Global
above).
UniCredit
The €22 billion merger with Capitalia last year created a
‘pan-European champion’, with strong businesses in Italy, Germany,
Austria and across Central and Eastern Europe, from Poland, Turkey,
Russia to Kazakhstan (see Best Retail Bank – Global
above).
BEST RETAIL BANK – ASIA
ANZ
ANZ, Australia’s third-largest banking group, had a very strong
year. The bank posted an A$3.92 billion ($3.62 billion) profit for
fiscal 2007, an increase of 9.4 percent. But the figure was boosted
by a strong retail banking performance, which registered 16 percent
profit growth. The bank was particularly strong overseas in Asia,
where profit increased 37 percent year-on-year to A$172 million – a
market in which it has announced it wants to continue expanding.
New CEO Michael Smith wants ANZ to become a super-regional bank,
generating 20 percent of its earnings from Asia-Pacific by 2012.
ANZ also landed a seven-year naming rights deal for Sydney’s
Olympic stadium for $27 million, won acclaim for its sustainability
policy and strengthened its ‘more convenient banking’ brand
campaign.
HSBC
HSBC made more than half its profit before tax from the
Asia-Pacific region in 2007. The performance was so impressive it
more than offset HSBC’s weak results in the US. While 2007 profits
fell from $4.6 billion to just $91 million in North America, they
increased from $8.7 billion to $13.3 billion in Asia-Pacific
(including Hong Kong). The bank has now upped its target for
emerging market exposure from 50 percent to 60 percent of group
profits, with its strategy in Asia – and particularly China – an
important part of the plan. The bank strengthened its footprint in
China, moving closer to being able to offer yuan-denominated debit
and credit cards in the country, where it is locally incorporated.
The bank has entered retail banking and insurance markets in China,
India and South Korea, among others, and has become the first
foreign bank to incorporate in Vietnam. In December last year it
also achieved a rare feat – being paid to take over an ailing
Taiwanese bank, The Chinese Bank, receiving a $1.5 billon payment
from Taiwan’s government. In China, its mainland network and
associated pre-tax profit exceeded $1 billion for the first time.
In Hong Kong, pre-tax profit rose to $7 billion. In South Korea,
HSBC is still waiting for regulatory approval to buy a 51 per cent
stake in KEB.
Industrial and Commercial Bank of
China
Expect to see more Chinese players in the banking awards line-up in
years to come. At the moment, ICBC, China’s biggest retail bank, is
leading the pack. It continued its remarkable ascent in 2007,
establishing itself as one of the world’s largest banking groups.
The bank’s assets surpassed $1 trillion in April, six months after
its record $21.9 billion IPO. In October, the bank managed another
first, agreeing to buy a 20 percent stake in Standard Bank, South
Africa’s largest banking group, for $5.6 billion – the biggest
overseas acquisition made by a Chinese company. In addition, the
bank has been widely tipped to make more acquisitions, possibly in
the US or Europe. In terms of retail banking, ICBC has invested the
most in products, customer service and distribution.
OCBC
Singapore’s OCBC makes it into the nominations for the Asia-Pacific
region after an impressive 2007 which saw core profits rise 30
percent to S$1.8 billion ($1.3 billion). Full year net profit was
S$2.1 billion. The results were the bank’s best since 1999, and
return on equity was the best since 1994. Retail banking core
operating profit improved 32 percent to S$631 million. The bank has
focused on customer convenience, with various initiatives including
Sunday openings, a branch revamp, supermarket banking and ATM
improvements. It is a leader in innovation in the region, with
acclaimed internet and mobile banking services in Singapore. OCBC
has a network of more than 460 branches in 15 countries across
Asia-Pacific – 350 of which are in Indonesia under the bank’s Bank
NISP subsidiary – and it has successful expanded into neighbouring
Malaysia. It recently incorporated and started operations in China.
OCBC also has operations in the UK and USA.
Standard Chartered
Standard Chartered makes 96 percent of its profit in Asia. The
bank’s biggest single business is its consumer banking service in
Hong Kong; it also completed local incorporation in China, where
income was up 72 percent, and saw operating income break through
the $1 billion mark in India. StanChart made acquisitions in key
markets last year, buying into Korea, Pakistan and Taiwan – and
very recently was allowed to incorporate in Vietnam. It also bought
American Express Bank, a private banking business whose customers
are largely based in emerging markets.
BEST INTEGRATION OF CSR INTO RETAIL BANKING STRATEGY
Bank of America
In March 2007, Bank of America (BofA) rolled out a $20 billion,
ten-year CSR programme to encourage the development of sustainable
business practices through lending, investing, philanthropy and new
retail banking products. In conjunction with non-profit Brighter
Planet, an eco-friendly credit card was launched – for every dollar
spent, BofA makes a contribution to environmental organisations. In
addition, BofA introduced a green mortgage and an environmental
home equity programme. In 2008, it plans to expand this programme
across other retail product lines such as deposit accounts and
loans. Another initiative was WorldPoints Rewards for the
Environment: existing BofA and MBNA cardholders can donate
WorldPoints rewards to environmental organisations or redeem them
for environment-friendly merchandise.
Groupe Caisse d’Epargne
In July 2007, France’s Groupe Caisse d’Epargne, the country’s
fourth-largest banking group by assets, announced a raft of cutting
edge ethical and environment retail banking initiatives, including
labelling its products with details about the financial risks they
carry or the activities they help finance, and the inclusion of
social and/or environmental criteria used in the design of the
products. The system is part of a wider campaign called Bénéfices
Futur (Future Benefits), a programme it said will redefine its
commitment in the area of sustainable development. The group is
also devoting 1 percent of net banking income to social solidarity
activities and looking to finance 1,000 local and social economy
projects dedicated to the environment in 2009.
Caja Navarra
Caja Navarra, the Spanish savings bank, upgraded its highly
successful social investment programme (Tú Eliges, Tú
Decides – You Choose, You Decide) in 2007 to give its
customers more say in where money for community initiatives is
invested. The bank says that of its 650,000 clients, more than
500,000 have participated in the initiative and helped support over
2,700 projects. Caja Navarra stresses that CSR is at the core of
its entire banking business – it says its Civic Banking is a new
way to interact with customers and shareholders. The bank backs
this up with a Civic Account, which provides deep transparency into
what each customer contributes to such programmes. “We are the
first to communicate what nobody else has dared to say,” says the
bank. “We dream of achieving possible objectives with the Cantera
2010 Plan: 800,000 clients deciding 4,000 projects, 10,000 clients
in voluntary work, 70 percent of the workforce in career plans, and
75 percent of employees satisfied with their professional, personal
and social situation.”
HSBC
HSBC’s evolution into a high-profile advocate of social
responsibility marks it out from rivals across the world. It
introduced a green element to its annual promotional sales in the
UK, US and Singapore, offering a range of discounts and incentives
on its products coupled with donations to various charities. In May
last year, the bank launched its first advertising effort in the US
that involved its customers in an environmentally focused
undertaking. HSBC also set up an interactive website, www.us.hsbc.com/theresnosmallchange
which included a calculator showing how bank customers can reduce
their environmental footprint. In 2007 HSBC created HSBC Climate
Partnership, a five-year, $100 million environmental initiative to
tackle climate change in partnership with organisations including
the Earthwatch Institute and WWF.
Rabobank
Underpinned by a general group-wide focus on social responsibility,
Rabobank became the first major European group to launch an ethical
range of retail banking products linked to the environment. In
early 2007, it launched a climate credit card in conjunction with
environmental organisation WWF, with a bold aim: to neutralise the
purchase of energy-hungry goods and services by funnelling money
into environmentally friendly projects. Rabobank says that all of
the bank’s 1.1 million credit cards have now been replaced by the
climate contribution card. And in 2007 the bank also introduced the
Rabo climate mortgage, which compensates sustainable home
investments through a discount on the mortgage interest rate.
BEST OVERALL MARKETING STRATEGY
BBVA
Segmentation, segmentation, segmentation – BBVA’s marketing mantra
is working well for the dynamic Spanish player. In the past year,
the country’s second-largest retail bank has boosted its segmented
BBVABlue campaign, launching a new product range tailored to the
particular needs of young people, as it targets one million new
young customers by 2010. It has also continued to cater for Spain’s
immigrant communities with its segmented and dedicated branch-led
service. In 2007 the bank rolled out a major Spanish ad campaign
called ‘Something New Every Day’, focused on its 150th anniversary
last year, which stressed its commitment to technology-led
innovation. The bank started up what it described as its own
television channel, broadcast over the internet, called BBVA IPTV,
initially for use internally by its 100,000 employees worldwide and
complemented it with the launch of a new, updated corporate
intranet.
Chase
Coming at a key time for the bank (see Best Retail Bank –
Americas), in January 2008, Chase launched a major new
advertising campaign in an attempt to reposition its brand as a
more customer friendly organisation and featured a new tag line
‘Chase What Matters’. The new campaign is the first time the US’s
third-largest retail bank has applied the same marketing strategy
for all of its retail banking businesses – credit cards, branch
banking, home lending, business banking, auto finance and student
lending. Chase has also pushed ATM-based marketing campaigns,
giving away cash prizes to customers who use its cash
machines.
HSBC
HSBC employed an aggressive and integrated marketing strategy
within the 83 countries in which it operates in 2007. It kicked-off
its biggest advertising campaign for more than five years,
promoting the relaunch of HSBC Premier, its mass affluent offering.
A multi-million dollar campaign was launched in September in the 35
countries where the Premier service is now available. In the 2007
annual ranking of the top 100 global brands by the consultancy
Interbrand, HSBC’s brand value rose the mos
