CAIXABANK named Best Bank in Spain 2020 and Best Bank in Western Europe 2020 by Global Finance magazine

 

Dubai, May 29th, 2020

The coming year is certain to be challenging for banks worldwide. Economic setbacks stemming from the Covid-19 crisis could prompt them to take a closer look at credit quality and tighten lending standards to contain nonperforming loans in hard-hit sectors. Meanwhile, low and negative interest rates and yield-curve inversions, a product in part of central banks’ efforts to contain the economic fallout, are challenging bank profitability. And societal concerns about such issues as climate change and banks’ commitment to socially responsible policies have come to the fore.

Even before the novel coronavirus fastened its grip, Deloitte’s 2020 banking industry outlook predicted that banks would be forced to set new social priorities and sacrifice short-term gains for long-term sustainability. “The low-growth scenario, in particular, could result in a drastic reduction in banking capacity, with fewer banks than we have today able to recover their cost of equity,” according to the December 2019 report.

The health crisis only worsens an already problematic situation. “Borrowers’ cash flow will come under increasing pressure over the second half of 2020 as the global spread of the coronavirus materially slows economic activity,” says Olivier Panis, head of Financial Institutions at Moody’s Investors Service in Paris. “Increased credit spreads, distorted capital markets and lower capital liquidity in some banking systems could prompt borrowers to increase their draw downs of available bank credit facilities, which in turn will put pressure on liquidity ratios.”

The good news is that despite their exposures, the biggest global investment banks have good levels of high-quality liquid assets available to cover borrowers’ needs as they accelerate their draw down rates, Panis adds.

But banks face other problems. In March, Fitch Ratings downgraded its outlook for US banks from stable to negative, predicting that the Federal Reserve’s decision to cut interest rates to near zero “will adversely affect spread revenue for a number of quarters, while fee income will be hampered from low levels of client activity.” Many central banks around the world have followed the Fed with rate cuts of their own.

Despite the squeeze on their profits, commercial banks in many countries cut fees and eased repayment requirements, often at the urging of their central banks, to help manage the crisis.

No one is spared when a crisis of this magnitude unfolds, but those that display solid fundamentals stand a better chance of making it through this difficult period in a healthy and competitive state. The winners of Global Finance’s Best Bank Awards are financial institutions that best display these qualities.

Methodology

Global Finance editors, with input from industry analysts, corporate executives and technology experts, selects the winners for the Best Bank Awards using entries provided by banks and other providers, as well as independent research based on a set of objective and subjective factors. It is not necessary to enter in order to win, but experience shows that the additional information supplied in an entry can increase the chance of success. In many cases, entrants are able to provide details and insights that may not be readily available to the editors.

Judgments were based on performance over the period from January 1 to December 31, 2019. We applied an algorithm to shorten the list of contenders and arrived at a numerical score, with 100 equivalent to perfection. The proprietary algorithm incorporates criteria—including knowledge of local conditions and customer needs, financial strength and safety, strategic relationships and governance, competitive pricing, capital investment and innovation in products and services—weighted for relative importance.

Once we have narrowed the field, our final criteria include scope of global coverage, size of staff, customer service, risk management, range of products and services, execution skills and smart use of technology. In the case of a tie, our bias leans toward a local provider rather than a global institution. We also tend to favor privately owned banks over government-owned institutions. The winners are those banks that best serve the specialized needs of corporations as they engage in global business. The winners are not always the biggest, but rather the best: those with qualities that companies should look for when choosing a provider.

 

WORLD’S BEST BANKS 2020

Regional Winners

North America Bank of America
Latin America Santander
Western Europe CaixaBank
Central & Eastern Europe Raiffeisen Bank International
Asia-Pacific DBS
Middle East Arab Bank
Africa Standard Bank

 

Western Europe Winners

Andorra Credit Andorra
Austria BAWAG Group
Belgium BNP Paribas
Cyprus Hellenic Bank
Denmark Nordea
Finland Nordea
France Credit Mutuel
Germany DZ Bank
Greece Eurobank Ergasias
Iceland Landsbankinn
Ireland Allied Irish Bank
Italy Unicredit
Liechtenstein LLB
Luxembourg BCEE
Malta HSBC
Monaco CFM Indosuez Wealth
Netherlands ING
Norway DNB
Portugal Banco Santander Totta
Spain CaixaBank

 

SOURCE: CAIXABANK , GLOBAL FINANCE MAGAZINE

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