BNP Paribas, Crédit Agricole and Société
Générale occupied the bottom three positions
LONDON, July 11,
2024 /PRNewswire/ -- S&P Global Market
Intelligence published its inaugural ranking of Europe's best-performing banks, revealing
Hungary's OTP Bank as Europe's top performer in 2023. The largest
bank in Hungary was propelled by
particularly strong lending margins driven by higher interest
rates. Poland's two largest banks,
PKO Bank Polski and Bank Polska Opieki, ranked second and
third.
S&P Global Market Intelligence ranked Europe's 50 largest publicly traded banks by
assets according to seven weighted financial metrics including
return on average equity, net interest margin, noninterest
income/average assets, cost-to-income, problem loan ratio, net
stable funding ratio and common equity Tier 1 ratio to determine a
relative performance score.
Banks across Europe benefited
from higher central bank interest rates in 2023 owing to efforts to
combat high inflation. Hungary's
policy interest rate was 13% and Poland's 6.75% for much of 2023, allowing
banks in those markets to increase earning-asset yields more
quickly than funding costs. Budapest-based OTP, and Warsaw-based PKO and Bank Pekao, had the
highest year-end net interest margins of any major European lenders
at 3.92%, 4.12% and 4.13%, respectively.
"Elevated interest spreads and strong non-interest income
performance helped drive profitability at the three Central
European banks, pushing them to the top of the performance
ranking," said David Hayes,
Manager, Global Financial institute Research, S&P Global
Market Intelligence.
France's three largest banks,
BNP Paribas, Crédit Agricole and Société Générale, occupied the
bottom three positions in the ranking, having underperformed
European peers on most metrics. Structural issues and
regulated savings accounts that require banks to pay a certain
minimum interest rate limited the amount of benefit the French
banks have been able to derive from higher European Central Bank
interest rates.
Find the full analysis here: European Bank Ranking
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SOURCE S&P Global Market Intelligence