BEST BANK IN THE WORLD
The largest bank in Southeast Asia, DBS is Global Finance’s 2020 Best Bank in the World. Establishing a core competence in technology, DBS has taken the lead in the digital transformation that is reshaping the world of banking and finance. The Covid-19 pandemic has made clear the pivotal role technology will play going forward, giving DBS an important competitive advantage.
DBS has taken savings from its earlier technological advances and reinvested them in more technology. The aim is to make banking all but seamless so corporations can concentrate on what they do best: running a business.
In the difficult operating environment of the first half of 2020, DBS’ profit before allowances rose 12% from the same period a year earlier to a record $3.5 billion. However, it raised total allowances fivefold to fortify the balance sheet against risks arising from the pandemic, pushing headline earnings down 26%.
“The strong operating performance we reported amidst severe macroeconomic headwinds in the first half attests to the resilience of our franchise,” says CEO Piyush Gupta. “Our solid balance sheet was further fortified by the significant increase in allowance reserves, strong liquidity inflows and healthy earnings. Notwithstanding the uncertainties, we are in a good position to continue supporting customers and the community through the difficult months ahead of us.”
—Piyush Gupta, CEO
BEST CONSUMER BANK
The primary institution for nearly a quarter of all Spaniards, CaixaBank is 2020 Best Consumer Bank globally. Thanks in part to innovations like imaginBank, Spain’s first mobile-only bank, it has achieved a 30% market penetration among digital clients. CaixaBank continued to gain market share across key segments last year, including mutual funds and savings, which saw assets under management grow 6.3%; and pension plans, which posted 14.7% growth.
Loans and deposits climbed 4.7% in 2019, and proactive management helped reduce nonperforming loans (NPLs); CaixaBank’s NPL ratio fell more than a full percentage point to 3.6%. Underlying group earnings climbed 20.4%, with a 10.8% return on equity. After adjusting for a labor agreement, however, the bank’s net profit came in 14% lower than a year earlier.
Commenting on the results, CEO Gonzalo Gortázar highlighted the bank’s “digital transformation, with improvement in internal processes and in digital channels to accompany the clients whenever and wherever they are,” alongside the “strengthening of our capital and liquidity position.”
CaixaBank’s net profit in the first half of 2020 fell 67% from the same period a year earlier as loan-loss charges increased to cover the future economic impact of the pandemic and the economic shutdown, which have hit Spain hard. The bank has continued to lend to businesses and individuals and continues to support those sectors most affected by the crisis.
—Gonzalo Gortázar, CEO
BEST FRONTIER MARKETS BANK
Arab Bank, 2020 Best Frontier Markets Bank as well as Best Bank in the Middle East, has played an important role in improving the economies and communities in which it operates, including its home market of Jordan. Last year marked the 10th anniversary of Together, Arab Bank’s corporate social responsibility program, which has helped more than 1.25 million people across Jordan with the support of the bank’s employees and customers. Arab Bank also supports and finances strategic projects in the region that develop the economic capacity of the Arab world.
The bank recently introduced contactless technology across a wide group of ATMs in Jordan in an effort to increase safety and convenience during the pandemic. It is also continuing to improve its comprehensive digital banking services. The bank also has developed a code of conduct requiring suppliers to conduct their business in alignment with its ethical standards; included are clauses relating to employment, health and safety, and environmental standards.
Arab Bank’s first-half 2020 earnings dropped precipitously, to $152 million from $453 million a year earlier, as it boosted provisions for potential bad loans. The additional provisions meant that buffers held against nonperforming loans continue to exceed 100%. Customer deposits rose 5% while loans grew 2%. The bank’s capital adequacy ratio was 16.8%.
—Nemeh Sabbagh, CEO
BEST BANK FOR SUSTAINABLE FINANCE
BNP Paribas, 2020 Best Bank for Sustainable Finance, has acted as sustainability coordinator or structuring agent for numerous sustainable-finance transactions and underwritten many green bond issues. BNP Paribas also holds the title for Global Finance’s Best Trade Finance Provider–Bank. In February, it closed a sustainability-linked loan (SLL) with JetBlue Airways through an amendment to its revolving credit facility. It also closed the first sustainability-linked syndicated credit facility in Canada with WSP Global, a professional-services firm. Also in Canada, BNP Paribas closed a bilateral, incentive-linked corporate revolving credit facility with Brookfield Renewable Partners.
Expanding the structure geographically, BNP Paribas closed its first SLL in Latin America in August: a $100 million syndicated revolving credit facility with Empresas CMPC, a Chilean pulp and paper company. The bank acted as joint lead arranger and sole sustainability coordinator and will be the administrative agent for the facility, which includes environmental sustainability performance targets for greenhouse gas emissions, industrial water use, industrial waste, and conservation and restoration.
—Alexandra Basirov, global head of sustainable finance
BEST GLOBAL TRANSACTION BANK
Citi’s Treasury and Trade Solutions (TTS) offers integrated cash management and trade finance services, helping corporations maximize their liquidity from operations around the world with virtual accounts and cross-currency sweeps and earning the bank recognition as 2020 Best Global Transaction Bank. Citi has continued to invest in technology to support innovation and efficiency in TTS, including direct connections to clients’ treasury workstations and systems to speed payments and receivables.
With its market-leading global network, Citi is able to capture clients’ end-to-end cross-border trade flows. Along with electronic trade loans and distribution or sales finance, its data analytics offerings provide insights aimed at adding value at each stage of the transaction life cycle.
—Naveed Sultan, global head, Treasury and Trade Solutions
BEST INVESTMENT BANK
Honors as 2020 Best Investment Bank go to J.P. Morgan, a repeat winner. The bank stands out for its size as well as for innovation and reach across markets. According to Dealogic, revenue-banking share for J.P. Morgan in the Americas grew 11.5% last year to $4.5 billion.
“Capital has gone up from $62 billion to $80 billion in the last five years,” says Daniel Pinto, co-COO and the CEO of J.P. Morgan’s Corporate and Investment Bank and CEO of its Corporate & Investment Bank, “but 90% of the increase is related to methodology changes and higher capitalization, with only 10% of it related to new business initiatives.”
J.P. Morgan has gained market share in global investment banking over four consecutive years, even though the industry wallet has remained flat, ranking first in both debt and equity capital management. It participated in all of the top five fee-paying deals in 2019 and was an adviser to Saudi Aramco for its $69.1 billion purchase of Saudi Basic Industries in June.
—Daniel Pinto, co-COO and CEO, Corporate and Investment Bank
BEST TRADE FINANCE PROVIDER—BANK
More than 40,000 corporations worldwide rely on BNP Paribas, 2020 Best Trade Finance Provider—Bank, for trade-related advice and operating capabilities, including customized solutions to optimize working capital. The French bank operates more than 100 trade centers in 60 countries to serve as corporate entry points for all client trade needs. Centric, the bank’s client platform for treasury operations, provides access to all of the bank’s services, including trade finance, supply chain and cash management.
BNP Paribas’ dedicated trade centers are staffed by 350 multilingual trade experts. An additional 1,200 middle- and back-office employees complete the bank’s trade team, which handles 14 million trade-related transactions annually. BNP Paribas is one of the founding members of Voltron, the open platform for documentary trade; and in 2018 it entered into a partnership with Cashforce, a fintech, to offer digital cash flow forecasting and working capital services to corporate treasurers.
—Vincent Davignon, head of trade expertise and regulatory affairs
BEST SUPPLY CHAIN FINANCE PROVIDER—NONBANK
The market for trade and supply chain finance has witnessed a flurry of new entrants in recent years. One provider that has stood the test of time is Orbian, originally founded in 1999 by SAP and Citibank and 2020 Best Supply Chain Finance Provider—Nonbank. In 2019, Orbian managed 100-plus buyer-led SCF programs with more than 5,000 suppliers enrolled. It funds the programs through multiple banks and prides itself on the simplicity of its supplier-enrollment process.
Orbian’s e-card, which received Global Finance’s Innovator award in the Corporate Finance category in 2019, provides early liquidity to suppliers of all sizes, not just those with the largest procurement volumes.
—Thomas Dunn, chairman
BEST BANK IN NORTH AMERICA
Bank of America
Bank of America (BofA), 2020 Best Bank in North America, boasts relationships with 95% of the US Fortune 100 companies and is the nation’s leading small-business lender. BofA is also a leading dealer in foreign exchange, derivatives, electronic trading and payment services. In addition, its investment bank offers one of the top market-making platforms.
BofA is also a leader in automation. It completed more than $3 billion in new technology-code initiatives last year, according to Brian Moynihan, CEO and chairman; and it surpassed 10 million clients by the end of 2019 using Erica, its virtual financial assistant for consumers. “We also delivered for shareholders in 2019 by returning a record $3.4 billion in excess capital through dividends and share repurchases,” Moynihan says. BofA and other large US banks halted share buybacks in March to conserve capital needed to support clients during the Covid-19 crisis.
—Brian Moynihan, CEO and chairman