THE BEST EMERGING MARKET BANKS 2004

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Emerging economies should post their strongest growth in two decades this year, but they need to be ready for a potential rise in international borrowing costs, the World Bank warned last month in its 2004 Global Development Finance report.

It is not easy to forecast where the next emerging markets crisis could erupt. Will it be an overheating in China's fast-growing economy or a sudden unwinding of the US current-account deficit that spells global catastrophe?

Right now, everything is suspiciously quiet. Investor confidence has been restored in most emerging markets without triggering the excesses that have caused problems in the past. It might be too good to last for long.

Global Finance has selected the banks that have performed well in the fastchanging environment of the past 12 months and that appear best positioned to withstand the challenges that surely lie around the next corner. With input from industry analysts, corporate executives and banking consultants -we identified the banks that adhere to high standards of corporate governance and possess the imagination to succeed in a challenging environment.

Our criteria included growth in assets, profitability, strategic relationships, customer service, competitive pricing and innovative products.

Regional Winner: National Bank of Kuwait

Rising oil revenues and the fall of Saddam Hussein's regime have boosted Kuwait's economy and created opportunities for National Bank of Kuwait, one of the largest and most profitable Persian Gulf banks. In January 2004 NBK became one of the first three foreign banks, and the only Arab bank from outside Iraq, to be granted a license by Iraq's central bank to operate in the country. Last August it was chosen to join the consortium operating the newly created Trade Bank of Iraq. The resumption of trade with Iraq helped to boost NBK's trade finance activity, which increased by 40% in 2003.

NBK is a leading provider of investment banking services in the region. It was sole financial adviser to MTC-Vodafone in its acquisition of Jordan Mobile Telephone Services, the largest-ever equity acquisition in the Arab world.

NBK enlarged its regional network last year, opening a full-service branch in Bahrain. This year it will open branches in Jordan and Saudi Arabia. The New York branch provides financial services to US contractors to support their rebuilding efforts in Iraq. The branch transfers more than $2 billion daily to clients throughout the Arab world. NBKs profits rose to $412 million for 2003, up from $355 million the preceding year.

* Ibrahim Dabdoub, CEO

www.nbk.com

BAHRAIN

National Bank of Bahrain

With a major market share in both commercial and retail banking, National Bank of Bahrain has a strong financial profile and operates the country's largest branch network.The bank has achieved steady growth in its core business and is one of the highest-rated banks in the Persian Gulf region. It is particularly strong in project finance, trade finance, foreign exchange and precious metals trading. NBB's profits increased by 16.4% to a record $60 million in 2003. Meanwhile, the bank's management has kept a tight hold on operating expenses.

* Abdulla Ali Kanoo, chairman

www.nbbonline.com

EGYPT

Commercial International Bank

CIB posted an 8.3% rise in profits, to $67 million, in 2003. A growing loan portfolio contributed to a 14% increase in net interest income. CIB has applied for a Level-I American depositary receipt program and is considering listing in other regional markets. Bank of New York recently received Egyptian central bank approval to raise its stake in CIB to 30% from 25%. The US agreed in March 2004 to provide partial guarantees for CIB loans to private sector companies doing business with Egypt's water and wastewater utilities. In February CIB was an underwriter for Orascom Construction's $65 million bond offering.

* Hisham Ezz Al-Arab, chairman and managing director

www.cibeg.com

JORDAN

Arab Bank

Jordan-based Arab Bank is one of the largest banks in the Middle East and has nurtured a reputation as a safe haven for Arab deposits.The bank operates in 20 countries and has a leading share in the Palestinian market.

The bank's profitability has been constrained by its conservative balance-sheet management. Arab Bank posted a 45% decline in profits, to $228 million for 2003, due in part to uncertainty created by the war in Iraq. Revenues rose by 7% to $794 million.

* Abdul Hamid Shoman, CEO

www. arabbank.com

KENYA

Kenya Commercial Bank

Kenya Commercial Bank operates more than half of all the banking offices in the country and maintains correspondent relationships with more than 400 banks worldwide.

The bank returned to profitability in 2003 following several years of losses. Net interest income increased by 16%, as KCB shed expensive deposits and increased cheaper savings-account deposits. Many of KCB's branches are in remote areas where it is the only available bank.

* Terry Davidson, chief executive

www.kcb. co.ke

KUWAIT

National Bank of Kuwait

National Bank of Kuwait is more than twice as big as its nearest competitor, whether measured in terms of assets, capital or profits. The vast majority of foreign companies doing business in Kuwait rely on NBK to meet their banking needs.The bank's large capital base enables it to provide unsurpassed underwriting capabilities in debt as well as project financing. Letters of credit for international trade are normally issued within 30 minutes.

* Ibrahim Dabdoub, CEO

www.nbk. com

LEBANON

BLOM Bank

BLOM Bank's profits rose to $88.4 million in 2003, up from the previous year's $83.6 million. Assets grew by 23% to $8.8 billion.

BLOM, along with the International Finance Corporation and Syrian investors, launched a public offering in October 2003 for 38% of the capital of BSOM, one of the first private banks in Syria. BLOM subscribed to 39% of BSOM's capital, while the IFC acquired 10%. BLOM continues to hold large amounts of foreign currency as a hedge against devaluation. Its liquidity ratio in foreign currency rose to 72.3% at the end of 2003 from 61% a year earlier. The bank's capital-adequacy ratio exceeds three times the international level.

* Naaman Ashari, chairman and general manager

www.blorn.corn.lb

MOROCCO

Banque Commerciale du Maroc

Casablanca-based BCM late last year acquired Wafabank, creating one of the largest banks in Morocco, with more than 1 million customers and 460 branches. With operations in Spain, France, Belgium and Italy and extensive correspondent banking relationships, BCM is a leader in financing foreign trade and is the largest custodian in Morocco. It also offers many insurance and wealth-management products. BCM's major shareholders include Omnium Nord-Africain, or ONA, and Banco Santander Central Hispano. French insurer Axa reduced its holdings after BCM acquired Axa's rival in the country, Wafa Assurance.

* Khalid Oudghiri, president

www.attijaribcm.com

NIGERIA

First Bank of Nigeria

First Bank of Nigeria is the country's largest and most-profitable bank. Its network of 350 branches is supplemented by vans that bring "banking on wheels" to remote villages.

The second-most-capitalized stock on the Nigerian Stock Exchange, the bank has followed a strategy of modernization and cutting costs to boost efficiency. It was the country's first bank to offer Internet banking services.With a subsidiary in London and a newly opened representative office in Johannesburg, FBN has begun to expand into the international market.

* Jacobs M. Ajekigbe, managing director and chief executive

www.firstbanknigeria.com

OMAN

BankMuscat

BankMuscat, Oman's leading bank, now accounts for 34% of the sultanate's banking assets, 38% of total credit and 34% of deposits. The bank's profits increased 18.2% in 2003 to $70 million. Net interest income rose 10% to $179 million, and other income increased by 16% to $51 million.

BankMuscat played a key role last year in the divestment of a 12.5% government stake in Oman Cement. It also was a lead arranger in the $130 million loan financing of Oasis LNG Carrier. Early this year, it launched online trade-finance services. The bank is now focusing on expanding its presence across the region and in India. In February 2004 it acquired a 35% stake in Centurion Bank, a new private-sector bank in India. BankMuscat's branch in Bangalore has been merged with Centurion Bank.

* Abdul Malik bin Abdullah Al-Khalili, chairman www.bankmuscat.com

QATAR

Qatar National Bank

Qatar National Bank supports many of the country's major projects, such as Qatar Airway's purchase last year of five Airbus A320s. The bank also was mandated lead arranger to Qatar Vinyls $460 million refinancing project. QNB's profits for 2003 rose 10.5% to $176 million. This was after an exceptional one-off provision to the new state pension fund. Net profit before this provision showed an increase of 14.6% over 2002.

The 50%-government-owned bank controls about half of the assets of the country's banking system. It serves individuals and corporations of all sizes in the region and maintains offices in London and Paris.

* Saeed Al-Misnad, CEO www. qatarbank.com

SAUDI ARABIA

Arab National Bank

The Saudi economy is back in the fast lane, with commercial activity showing an increase of about 30% last year. Arab National Bank is sharing in the wealth, with a 31% rise in net income in 2003. The bank's return on equity rose to 19.3% from 16.5% in 2002. Revenue growth was impressive across all areas of the bank's business in 2003, and ANB took advantage of the increased cash flow to modernize its facilities and implement new technology. ANB continued to build up its loan-loss provisions during the year. General provisions now represent almost 2%) of the bank's performing loan portfolio.

* Nemeh Sabbagh, CEO www.anb.com.sa

SOUTH AFRICA

Standard Bank

A strengthening South African economy helped Standard Bank extend its long-term growth trend in 2003, with a 19% increase in headline earnings that matched the percentage gain for 2002. The bank achieved a return on equity of 23% last year, with the domestic business reporting a 30% ROE.

The stronger rand reduced costs for international operations. Standard Bank has a presence in 38 countries, 17 of which are in Africa. In March 2004 Standard Bank acted as the lead arranger of the commercial bank facilities for Sasol's $1.2 billion natural gas project, which is a joint venture between Sasol and the South African and Mozambican governments.

* Jacko Maree, CEO WAVW. Standardbank, co. za

TUNISIA

Banque de Tunisie

The Tunisian economy is finally rebounding from a severe drought and recession, but its banks are still struggling with non-performing loans and rising risk provisions. The agriculture sector improved in 2003, and industry began to show signs of sustainable growth in early 2004.

Thanks to its prudent lending policies, Banque de Tunisie has fared better than other leading banks, particularly those with large government ownership. The bank's profits inched up 0.6% in 2003 to $24.8 million.

Banque de Tunisie has about 80 local branches, which are connected by an intranet supplied by Chicago-based Lansa.

* Faouzi Belkahia, president

UAE

National Bank of Dubai

National Bank of Dubai s profits increased sharply in 2003, its 40th anniversary year, but much of the gain was from one-off sales from its securities portfolio. Earnings per share rose 41.6%, while profits from its core banking and credit-card services increased by 13.7%.

Some 90%) of NBD's revenues come from its corporate banking business, although it is making an effort to increase its retail banking operations. The bank has 37 domestic offices, as well as a branch in London and a representative office in Tehran. m Khalifa Mohammed Ahnied Sulaiman, chairman www.nbd.com

Regional Winner: HSBC

The HSBC Group continues to forge ahead in Asia's emerging markets. Primarily through its Hong Kong based subsidiary, Hong Kong and Shanghai Banking Corporation, it has built a presence in a number of key countries. Its principle focus is on India, Indonesia, Korea, Taiwan and Thailand, as well as the more developed markets of Singapore and Hong Kong. Last year it established five new branches in the region-one in Bangladesh and four in India. The group boasts 685 offices throughout the Asia-Pacific region.

HSBC last year became the first foreign bank to launch a Shariah banking service in Indonesia. It also won approval to launch an Islamic banking service in Bangladesh.

The group continues to make significant inroads into mainland China. Its subsidiary, Hang Seng Bank, signed an agreement last year to acquire a 15.98% stake in Industrial I3ank, becoming the first foreign bank to acquire more than 15% of a mainland Chinese bank. Meanwhile, the Hongkong and Shanghai Banking Corporation entered into an agreement to acquire 50% of Fujian Asia Bank, a Chinese-foreign equity joint venture bank, at the end of December.

In 2003 the HSBC Group posted a pre-tax profit of $12.8 billion, up 33% from $9.7 billion in 2002. Hong Kong accounted for 25.9% of the earnings, with the rest of the Asia-Pacific constituting 9.9%.

* S. K. Green, group chief executive www.hsbc.com

BANGLADESH

Islami Bank Bangladesh

While Bangladesh's state banks continue to struggle with the challenge of ongoing reforms, a number of its private commercial banks are doing rather well. Of these, Islami Bank stands out, boasting a further 38% increase in profit last year, to 2.2 billion takas ($37 million). A private commercial bank based on the Islamic Shariah, the bank has managed to increase its business while ensuring a higher spread between lending and deposit rates. Last year it reported an increase in total assets, to 134.7 billion takas, from 80.9 billion takas in 2002. Deposits increased to 70.5 billion takas, from 56.2 billion takas the preceding year. The bank also enjoyed a rise in export-import business. Islami Bank provides extensive customer service and continues to increase its branches-to 141 last year compared to 128 in 2002in the wake of strong demand.

* Abdur Raquib, executive president www.islamibankbd.com

CHINA

Bank of China

China's banks are problematic: Despite significant reforms, they sustain a high ratio of non-performing loans and low capital adequacy. Nevertheless, Bank of China stands out for its reforms. In 2002 BOC became the first Chinese bank to list its shares on an international stock market, in Hong Kong, ensuring greater transparency.

In 2003 the BOC reported modest gains: a pre-tax profit of 2.45 billion yuan ($296 million).This was in sharp contrast to its operating profit of over 57 billion yuan, as the bank channeled significant funds into its loan loss provisioning. The bank's provisions coverage was up, to 74.55%, improving its financial condition considerably. Non-performing loans, meanwhile, continued to fall-down by 6.45% from 2002, to 15.92%.

BOC's return on assets sat at 1.27% in 2003, up from 0.32% the preceding year. Corporate deposits jumped 28% and savings deposits 22.6%. Credit card issuance continued to see strong gains, with BOC maintaining its lead position in the market.

* Xiao Gang, chairman and president

www.bank-of-china.com

INDIA

ICICI Bank

ICICI Bank has emerged as India's largest privately owned bank, following the merger in 2002 of ICICI Ltd and its commercial arm, ICICI Bank. As of December last year, it boasted 1.1 trillion rupees ($25.2 billion) in assets and a network of around 450 branches and offices and 1,750 ATMs. It leads the retail sector with 5.75 million customers. It also offers a wide range of financial services to corporate clients, making strong use of its online presence in foreign exchange trading, cash management and trade services.

ICICI also has proven itself to be a profitable bank. In the period April to December 2003, it reported a 36% rise in after-tax profits, to 11.8 billion rupees. Net interest income and fee income both increased by 41% year on year while retail assets rose a significant 85%, from 152.9 billion rupees in 2002 to 282.7 billion rupees in 2003.

* K.V. Kamath, managing director and CEO

www.icicibank.com

INDONESIA

Bank NISP

Bank NISP has shown itself well able to weather the challenges of the Indonesian economic climate. Last year it reported an 84% increase in net income, to 170.7 billion rupiahs ($19.9 million) from 93 billion rupiahs in 2002.

The bank ensures it diversifies its loan disbursement among a range of business sectors, currencies, tenors and interest. The success of its strategy is reflected in its loansto-deposits ratio, which sits at 77.53%, one of the highest in the country.

The bank's total assets reached 15.4 trillion rupiahs at the end of 2003. Meanwhile, the bank brought its NPL ratio clown to 0.84% (from 1.67%), one of the lowest ratios in the country. Last year Bank NISP's return on equity rose considerably, to 18.81%) from 13.42% the previous year. Return on assets increased from 1.52% to 1.68%.

The bank opened 34 new offices in 2003, bringing its total to 134.

* Karmaka Surjaudaja, chairman

www.banknisp.com

MACAU

Seng Heng Bank

Seng Heng Bank excels in its market, boasting a strong balance sheet and a broad range of services. Last year it recorded 26% growth in its unaudited net profit, to 160 million patacas ($20 million) from 127 million patacas in 2002. This is its fourth consecutive year of growth as it weathered Macau's economic downturn better than any other bank in the territory.

The second-largest bank in Macau, Seng Heng Bank also enjoyed growth in its assets, up almost 3% to 17.4 billion patacas from 14.7 billion patacas. The bank continues to improve its market share while it pursues its strategy of promoting Macau as an offshore financial center. To this end, it offers a full-service package to corporates, including offshore company incorporation, local staff recruitment, office searches and a range of banking services including trade finance.

* Ho Hung Sun Stanley, chairman and managing director

www.senghengbank.com

MALAYSIA

Public Bank

Public Bank continues to benefit from its focus on small and medium-size enterprises. It posted a before-tax profit of 1.4 billion ringgits ($368 million) in 2003-a 69% year-on-year increase. Meanwhile the group's return on equity (ROE) was 14%, up from 12.3% in 2002.

The bank saw strong growth in its assets last year, with the group's total loans and advances up by 8 billion ringgits, to 47 billion ringgits, while Islamic financing activity surged by 59%.This compares favorably to the industry's 32% increase.

The bank initiated efforts to rationalize its domestic branch network last year, integrating its commercial banking and company financing businesses into one branch. Public Bank's NPL ratio fell further to 1.9%, down from 2.4% the preceding year, while its parent company, the Public Bank Group, saw its NPL ratio fall to 2%.

Public Bank Group's market capitalization increased by 70% in 2003 to stand at 18.7 billion ringgits, making it the largest non-government-linked company on the stock exchange at the end of the year.

* Teh Hong Piow, chairman

www.publicbank.com.my

MONGOLIA

The Agricultural Bank of Mongolia

The Agricultural Bank of Mongolia (Ag Bank) is the main provider of financial services in rural Mongolia. It has more than 350 branches throughout the country, providing both loans and deposit facilities in even the smallest of its outlets.

The bank is a model of reform, having narrowly escaped liquidation in 1999 when it was placed in receivership, weighed down by a string of operating deficits and bad loans. Since then, it has become the second-most-profitable bank in the country and in March last year was privatized through international tender to a Japanese company, H.S. Investments of Japan.

The successful turnaround of Ag Bank proved the worth of a low-income population when provided with the appropriate deposit and credit products. The bank acquired its 500,000th borrower in 2003, having begun its lending program in November 2000. The program focuses on small and medium-size enterprises, consumers, herders and pensioners.

The average loan size is below $1,000, but repayment rates are impressive, sitting at above 99%.

* J. Peter Morrow, CEO

www.agbank.mn

PAKISTAN

Habib Bank

Habib Bank is Pakistan's secondlargest commercial bank. Its activities range from retail to investment banking with a countrywide and international network. It runs more than 1,400 branches in Pakistan, commanding a 20% market share. Overseas it boasts 48 branches with three subsidiaries. It also has two joint ventures, with Habib Nigeria Bank and Himalayan Bank, and a majority stake in Habib Allied International Bank based in the UK.

Last year was a decisive year for Habib Bank. In what represents Pakistan's largest strategic sale to date, the government sold a controlling 51% stake in the bank to the Geneva-based Aga Khan Fund for Economic Development. In preparation for the privatization, Habib underwent extensive restructuring. Last year's figures showed strong performance, with pre-tax profits of $95.4 million, up from $71.3 million the year before. Assets were up, from $7.03 billion to $7.59 billion.

* Zakir Mahmood, president and CEO

www.habibbankltd.com/index.cfm

PHILIPPINES

Bank of the Philippine Islands

The Philippines' second-largest lender, the Bank of the Philippine Islands, also has the distinction of being the oldest bank in South East Asia. Last year it recorded a solid performance, posting net earnings of 5.7 billion pesos ($101.5 million), up 10% year on year. This resulted in an increase in its ROE, up from 10.2% to 11.1% in 2003, as well as in its ROA, up to 1.5% from 1.3% the preceding year.

The bank reported a robust performance in its insurance operations-profits doubled in the third quarter of 2003-as well as recording significant improvements in its asset management and credit card business. NPLs improved considerably, down to 6.5%, from 9.6% in 2002.

The bank leads the field in electronic banking, having paved the way in most of the new Internet products. It also has a significant presence in corporate finance and securities distribution.

* Jaime Zobel de Ayala, chairman

www.bpiexpressonline.com

SOUTH KOREA

Shinhan Bank

While Shiiihan Bank's profit in 2003 fell 20% to 476 billion won ($417 million), down from 595.9 billion won the preceding year, it still excelled when compared to its fellow financial institutions in South Korea. In the wake of huge losses brought about by the country's credit card debacle, many of Korea's banks plummeted into the red last year, including Kookmin Bank, the country's largest lender.

Shiiihan looks relatively healthy due to its smaller exposure to the credit card industry. Last year saw its bad-loan-to-total-loan ratio widen to 2.2% from 1.42% while its delinquency ratio for consumer loans increased to 1.06% last year from 0.72% in 2002 and its corporate loans jumped to 1.51% from 1.14%.

The difficult year was telling in the bank's loan loss provisions: In 2003 the bank set aside 435.1 billion won, compared to 168.3 billion won the year before.

* Sang Hoon Shin, president and CEO

www.shinhan.com

SRI LANKA

Commercial Bank of Ceylon

Commercial Bank of Ceylon excels in Sri Lanka. It is a forward-looking bank, intent on becoming a regional player by the end of the decade. As part of its plan to expand its reach, for example, Commercial Bank bought Credit Agricole Indosuez in Bangladesh last year.

Group assets were up a stunning 50.3% last year to 110.3 billion rupees ($1.1 billion). Meanwhile, net profits rose 17.1% to 1.5 billion rupees, and total group income was up 9.5% to 9.7 billion rupees.

While the bank has traditionally focused on the corporate sector, it has been making significant steps on the retail side as it brings new products to the market. Last year, total deposits grew by nearly 38% to 75 billion rupees. The bank distinguishes itself in terms of its capital adequacy ratios, with Tier 1 capital at 13.43%, well over the statutory requirement of 5%. Meanwhile, it has further reduced its NPLs to 7.47% from 8.42% in 2002.

* Amitha Gooneratne, managing director and CEO

www.combank.net

TAIWAN

Bank Sinopac

Bank Sinopac is viewed as a forward-looking bank. At a time when Taiwan's corporates are heading for big business opportunities in China, Bank Sinopac has proven itself keen to respond, say market sources.

The bank has maintained its profitability throughout difficult economic times in Taiwan, recording after-tax net income of NT$4.2 billion ($128 million) in 2003, with after-tax earnings per share of NT$1.20. It boasts a clean balance sheet, with its NPL ratio at 1.79%, the lowest in Taiwan.

Bank Sinopac offers sophisticated e-solutions on the wholesale and retail sides. It places heavy emphasis on advanced technology, with over 10% of its total annual expenses going toward funding ongoing upgrades of its systems.

At the beginning of 2004 the bank established a financial holding company with National Securities and Sinopac Securities. The new entity, Sinopac Holdings, provides the bank with further reach, increasing its retail sites to 88 and a client base of 1.1 million.

* Paul C. Lo, chairman

www.banksinopac.com.tw

THAILAND

Siam Commercial Bank

The Siam Commercial Bank recorded a strong performance in 2003-a clear indication that Thailand's financial institutions are finally leaving the 1997 crisis behind. The bank's profits jumped from a net loss of 12.5 billion baht ($320 million) in 2002 to a 12.5 billion baht net profit last year. Profits as well as total assets were at their highest ever, with the bank's return on equity coming in at a lofty 20%.

The bank grew its business in all sectors last year, including in securities, insurance, hire purchase, leasing and fund management. Total deposits stood at 607 billion baht at the end of 2003, an increase of 39 billion baht from the preceding year. The bank also achieved yet another increase in its net interest margin, up to 2.6% for the year 2003, maintaining its leadership among peers.

Meanwhile, NPLs continued to decrease, to 90 billion baht last year, or 17%, down 30 billion baht from 2002.

Part of the bank's strategy since 1997 has been to divest itself of non-core subsidiaries. Clearly its approach is paying off.

* Chirayu Isarangkun Na Ayathaya, chairman

www.scb.co.th

Regional Winner: Raiffeisen Zentralbank

Austria's Raiffeisen Zentralbank Group (RZB) has been far more systematic in expanding its operations throughout Central and Eastern Europe (CEE) than most of its rivals. Rather than cherry picking the biggest banks in the larger markets, RZB built up an enviable and closely integrated network of banking subsidiaries in Central Europe, the Balkans and the former Soviet Union. Over the past year it succeeded in adding key banks in Albania, Belarus and Kosovo to this network.

RZB has consistently outperformed the market both in terms of asset growth and profitability. Last year saw pretax profits leap by 42%, built around balance sheet growth of 21%, with marked improvements across all the key profitability ratios. ROE was 15.5% before tax.

Even in Austria's competitive banking environment, RZB gained market share, with loans up by 27% and deposits by more than a third. But it is its commitment to expanding its CEE presence that is really bringing in the benefits, winning new clients from both major corporates and the SME sector that can tap into RZBs broad range of services, including leasing, asset management, brokerage and insurance.

The relatively recent focus on retail banking promises the fastest growth in the immediate future, with this year's target being to expand the customer base from 3.2 million to 4.2 million through a mix of organic growth and acquisitions. RZB is also making its presence felt in Central Asia, where it is active in syndication and trade finance.

* Walter Rothensteiner, chairman

www.rzb.at

ALBANIA

Savings Bank of Albania

Overall winner RaifFeisen won the bidding race in the privatization of Albania's market leader, the $126 million deal being concluded in April 2003. Even before then, Savings Bank of Albania had posted a 20% profits boost and slimmed down its workforce and branch network by more than 60%.

Expect a name change to Raiffeisen Bank Albania and a move away from strictly deposit-taking to a broader array of retail services, including the launch of a new ATM network and distinct units specializing in corporate and commercial lending. With its market share of 60% of all liabilities, the reborn Raiffeisen Albania is likely to set new standards of banking services in Albania.

* Steven Grunerud, CEO

www.bkursimeve.com.al

ARMENIA

HSBC Bank Armenia

Armenia's banking sector has largely consolidated, but it is still relatively trouble-plagued. Even after so many problem banks have closed, HSBC's ability to provide banking services and products conforming to the best international standards has helped it carve out a third of the local banking market. It is a leader in credit cards, being the only MasterCard agent, and is installing more cash machines than any of its rivals.

The bank is a joint venture, 70% owned by the international banking group with the balance held by local investors. HSBC Bank Armenia's profitability has doubled in recent years, and it has maintained a firm control over costs, resulting in a return on equity exceeding 20%. Its effective treasury functions have also given it leadership in foreign exchange and dealing in government securities. Its leadership position is not assured, however, as some of the competition is catching up.

* Nick Gilmour, CEO

www.hsbc.com

AZERBAIJAN

International Bank of Azerbaijan

The International Bank of Azerbaijan has long been considered the top bank in Azerbaijan-and not just for being market leader, with more than 50% of the country's total banking assets. The bank has sustained its profitability and strengthened its balance sheet with the assistance of a syndicated commercial loan from an Austrian consortium headed by this year's overall regional winner, Raiffeisenbank.

Recent developments include branching into the growing insurance and reinsurance market by creating an insurance company-UC-and expanding its Azericard credit card services and ATM network. Internet banking was introduced for the first time last year, and privatization of the government's 50.2% stake is likely.

* Jahangir Hajiyev, chairman

www.ibar.az

BELARUS

Priorbank

Raiffeisen's timing of its acquisition of a controlling 61.3% of Priorbank looks spot on, as 2003 was a great year for Belarusian banks, with assets growing by 60% and profits nearly trebling across the board. Priorbank was no exception, with rapid growth across its range of businesses resulting in all principal bank indicators more than doubling.

Foreign ownership has strengthened Priorbank's credit and international banking connections. Recent deals include an IFC-backed loan, the first of its kind in Belarus, and an EBRD-arranged syndicated loan.

Priorbank expects to improve on its financial results again this year, with growth coming from a new focus on retail banking and, on the corporate side, more emphasis on SMEs (small and medium-size enterprises) and individual entrepreneurs.

* Sergey Kostyuchenko, chairman

www.priorbank.by

BOSNIA AND HERZEGOVINA

Raiffeisen Bank BN

Austrian-owned Raiffeisen Bank Bosnia i Hercegovina wins the award this year for being not only the largest bank in this Balkan republic, with around 20% overall market share, but the most consistently profitable.

The bank continues to build on its market leadership position across all business segments with a policy of stable growth. It is launching a range of tailor-made products for corporates, SMEs and joint-venture players and should benefit from cross-selling with Raiffeisen's locally based insurance, leasing, brokerage and investment groups. Cooperation with the EBRD remains close, and Raiffeisen recently became the first foreign-owned bank to conclude a syndicated loan to facilitate medium- and long-term financing to SMEs.

* Edin Muftic, CEO

www.raiffeisenbank.ba

BULGARIA

DSK Bank

It was established out of a former state savings bank in 1998, but by last year DSK Bank was already second in size to Bulbank and was growing its retail operations rapidly. Last October DSK Bank was acquired outright by Hungarian market leader OTP Bank in a euro311 million deal. The new owner is investing heavily with the aim of quadrupling profits and making DSK Bank Bulgaria's largest bank by assets over the next four years.

Such confidence appears well placed, given DSK Bank's performance last year. Profits were up by some 20% on the back of an 18.4% growth in assets and a similar increase in deposits. The bank is looking to further boost profitability by extending its range of retail products and services.

* Krasimir Angarski, chairman and CEO

www.dskbank.bg

CROATIA

Privredna Banka Zagreb

A strong track record of profitability and innovation have won Privredna Banka Zagreb the award again this year. Now part of the Italian Gruppo Banca Intesa, the bank's most recent profit statements show a 20%-plus hike on the back of 11 % asset growth.

Privredna has reaped rewards from its PBZ American Express joint venture and is the leader not only in Croatia but in adjoining Balkan states. Almost all of Croatia's banks are now under foreign ownership and benefiting from resulting reinforcement of their capital bases and new technological input. It's in feeding that through to the bottom line that Privredna has won out.

* Bozo Prka, chairman

www.pbz.hr

CYPRUS

Bank of Cyprus

It's been a tough year for Cypriot banks, with lower interest rates and a slowdown in the economy. New regulations on interest suspension have required significantly higher provisioning, which turned a 21% improvement in core profits at Bank of Cyprus into a pre-tax loss. The market-leading bank has now taken the hit on provisions and is confident that underlying improvements in performance will come through.

The bank's overseas operations helped support the bottom line, especially its 80-strong network in Greece, which contributed 42% of core profits last year. Given its strong capital base, the dynamic growth in its Greek operations and the broader benefits of EU accession, Bank of Cyprus is set to reap the rewards this year of market leadership combined with geographical diversification.

* Solon A. Triantafyllides, chairman

www.bankofcyprus.com

CZECH REPUBLIC

Ceskoslovenska Obchodni Banka

Competition among the "big three" Czech banks, especially in the fastgrowing retail sector, has never been fiercer. Repeat winner Ceskoslovenska Obchodni Banka (CSOB), part of Belgium's KBC banking group, has succeeded in growing its retail loan book four times faster than the market, putting it in a stronger position than ever following EU accession.

Loans to individuals and SMEs rose by 51% last year, and savings products such as mutual loans grew by 43%, while successful cross-selling and new advisory services aimed at helping clients diversify their investments in local markets saw fees and commissions rise twice as fast as interest income. Headline profits were slightly lower in 2003, though this reflects a far smaller release of bad debt provisions than was made during the previous year's dramatic recovery.

* Pavel Kavanek, chairman and CEO

www.csob.cz

ESTONIA

Hansabank

The clear market leader in Estonia and the cornerstone of the eponymous financial group spanning all three EU accession Baltic states, Hansabank wins again this year on the strength of another 15% rise in pre-tax profits, improved credit quality and an excellent cost-income ratio.

A lower interest rate environment has led to fast growth in mortgage loans, though combined with suffer competition this has also affected margins overall. Hansabank continues to build on its pioneering work in electronic banking, has over half of Estonia's fast-expanding pensions market, and is better placed than most for Estonia's accession to the EU.

* Indrek Neivelt, chairman

www.hansa.ee

GEORGIA

TBC Bank

TBC Bank wins the award not just because it is Georgia's largest bank by assets but also because it has shown innovation in adopting technology. The result has been a dramatic increase in its deposit base and in the volume of real estate loans made to its customers.

After more than doubling its profitability in 2002,TBC Bank has put in another sparkling performance last year, with asset growth of 40%, a strengthened balance sheet and net profits up another 30%. Little wonder, then, that a 25% stake in TBC Bank has been taken by Soros Investment Capital, the investment group linked to the fabled financier George Soros.

* Mamuka Khararadze, chairman

www.tbcbank.com.ge

HUNGARY

OTP Bank

Another strong performance in 2003 ensures that market leader OTP Bank remains the bank of choice in Hungary. It has come a long way from its former incarnation as a state-owned savings bank, retaining its dominant market share while rapidly expanding its electronic and mobile banking capabilities and making strategic acquisitions elsewhere within the region.

OTP Bank posted a near-50% rise in pre-tax profits and boosted ROE by 30.5% last year. While the loan book grew at a prudent rate, non-interest income rose rapidly; it now accounts for 43% of the bank's income. In consumer banking, OTP Bank has gained some 60% of the credit card market and, through OTP Mortgage Bank, over 40% of housing loans.

* Sandor Csanyi, chairman and CEO

www.otpbank.hu

KAZAKHSTAN

Kazkommertsbank

Repeat winner Kazkommertsbank continues to expand rapidly and reward its shareholders-which since last year include the European Bank for Reconstruction and Development (EBRD) with a 15% stake-with enhanced profitability and a succession of upgrades from the leading credit rating agencies. Last year' saw another 10%-plus rise in net profits.

The largest bank in Kazakhstan by both capital and assets, Kazkommertsbank has a traditionally strong franchise among the country's larger corporates. More recently it has been focusing on the fast-emerging SME segment of the market. It is also expanding its range of retail services, including the relatively under-developed mortgage sector.

* Nina Zhussopova, chair of management board

www.kazkommertsbank.com

KYRGYZSTAN

AsiaUniversalBank

The largest bank in this Central Asian republic's nascent financial services sector, AsiaUniversalBank (AUB) comes out on top because by making intelligent use of modern technology, including Internet banking and smart cards, it has leapfrogged the country's infrastructure gap and thereby won a growing band of large international and domestic clients.

The bank's primary focus remains international trade finance for mainly corporate clients, in support of which it has developed a strong correspondent network across the CIS and beyond. But it has also gained a dominant position in debit cards and other money transfer platforms that can be used without holding an account. These are a raging success, and AUB's asset base has more than quadrupled over the past two years. At the same time, the balance sheet has significantly strengthened, and profitability leapt by up to 60% a year.

* Nurdin Akerovich Abdrazakov, CEO

www.aub.kg

LATVIA

Unibanka

Unibanka, part of Sweden's SEB Group, has recently become the largest lender among Latvian commercial banks. It continues to win retail customers in this tech-savvy Baltic republic through continuing technological innovation, the most recent success being its issuance of smart cards.

With Latvia's economy showing GDP growth above 7% and interest rates falling, Unibanka has focused on retail and particularly mortgage lending, while the bank's capacity to service the fast-growing savings market has been greatly strengthened by its purchase of leading asset manager Optimus Fondi. Operating income increased by 13% last year on asset growth of 23%, and the more modest 5% rise in pre-tax profits shows that Unibanka is investing strongly in the future.

* Viesturs Neimanis, president

www.unibanka.lv

LITHUANIA

Vilniaus Bankas

Another member of the Swedish SEB Group, Vilniaus Bankas comes out on top again this year not only as Lithuania's largest bank but because of its innovative approach and financial discipline. After the 'annus mirabilis' of 2002, profits were up a more sedate 4.6% last year, though return on equity was maintained at 16.9% and earnings per share also rose. Discipline and ever-increasing automation yielded a 3.5% decrease in costs, while at the same time the bank's assets rose by more than 29% and it gained market share in both loans and deposits.

The volume of mortgages and life insurance almost doubled, payment cards showed 25% growth, and both telephone and e-banking customers increased more than two times compared with the prior year. Vilniaus Bankas is also the most active brokerage house in Lithuania trading in stocks and securities, and its mix of businesses combined with professionalism will stand it in good stead following EU accession.

* Julius Niedvaras, president and CEO

www.vb.lt

MACEDONIA

Komercijalna Banka

One of the leading commercial banks in this land-locked Balkan republic, Komercijalna Banka's latest figures show a near-70% increase in net profits-a remarkable achievement amidst a static economy and worsening trade deficit. Moreover, local deposits have been seeping away into euro accounts.

Komercijalna Banka wisely drew in its horns on asset expansion and restructured its balance sheet, which has allowed the bank to lower its provisioning against bad or doubtful debts. Investment in technology continues to support its role as the country's leading universal bank, and as interest rates fall, it has focused on corporate loans and especially micro-credits. International payments remains a big earner, while the fast-growing credit and payment card business saw a 62% increase in volume.

* Trajko Davitkovski, chairman

www.kb.com.mk

MALTA

HSBC Malta

Ever since HSBC bought Malta's largest bank, the old Mid-Med, the re-branded HSBC Malta has gone from strength to strength. Last year pre-tax profits were up 23.8% despite adverse interest rate movements and the costs of gearing up for Malta's joining the European Union.

With more than half the local banking and mortgage markets, HSBC Malta has established itself as clear leader in this island republic. It also has leadership positions in life assurance and asset management. The bank grew its loan book by a modest 3.6%, and total assets actually shrank slightly last year. But in terms of customer service and professionalism, HSBC Malta stands head and shoulders above its competitors.

* Chris Hothersall, CEO

www.hsbcmalta.com

MOLDOVA

Mobiasbanca

It may not be the largest player in Moldova's still fragmented banking industry, but Mobiasbanca wins the award for its consistent profitability. Indeed, the bank has nearly doubled net profits, with return on equity running above 20%, as well as turning in some enviable cost-to-income ratios.

Starting from a relatively low base, Mobiasbanca has been enlarging its overall market share by upgrading its retail banking, taking a leading role in developing the country's fast-growing credit card industry. A long-standing cooperation with the EBRD in providing trade finance for Moldovan exporters was reinforced again last year.

* Nicolae Dorin, president

www.mobiasbank.com

POLAND

Bank Handlowy w Warszawie

Poland has one of the most competitive banking markets of any of the EU accession states, and Citigroup-owned Bank Handlowy w Warszawie has had to fight hard to retain its title. Nonetheless, its successful integration within the broader group provides it with access to expertise and technologies, giving it a fresh competitive edge, while consolidation means that it is now responsible for all Citigroup settlements in Central and Eastern Europe. The gradual improvement in the Polish economy, now nudging 4% GDP growth, did not come through in time for the bank's 2003 figures, though following a restructuring of the balance sheet and reorganization of its branch network Handlowy is much more optimistic about 2004. It is building on its already strong position in corporate lending with a sharper focus on the emerging SME market, while a 60% increase in Internet banking transactions helps consolidate its leadership in the increasingly competitive credit card market.

* Slawamir Sikora, president

www.citibank.pl

ROMANIA

Raiffeisen Romania

Raiffeisen may not be Romania's largest bank-it is ranked third by assets-but it wins the award this year for its remarkable turnaround in the two years since privatization. Investment in IT systems and personnel training have led to significantly improved financial figures in 2003, and this year the bank is planning to increase total assets by 60% and improve its performance ratios across the board. Foreign ownership provides easier and cheaper funding for loans and upgrading the bank's range of products and services. More than euro40 million is currently being invested in IT, improving the branch network and building up ATM and EPOS coverage. Raiffeisen is confident its enhanced capability of delivering quality services through multiple distribution channels, including telebanking and e-banking, will further strengthen its market position in Romania.

* Steven van Groningen, president and CEO

www.raiffeisen.ro

RUSSIA

MDM Bank

A front-runner among Russia's privately owned banks, MDM wins for its leadership in aligning with IAS (International Accounting Standards), for providing corporate banking services to the fast emerging mid-size 'blue chips' in the region, and for its strong bond issuance-including its own $200 million three-year eurobond.

On the retail side, it is revamping its network of micro-offices and targeting the emergent middle-class customer by offering new product lines, such as mortgages, and investing strongly in retail software. With its enhanced credit rating and profitability buoyed up by stringent cost controls, MDM looks set to rule the roost in the Russian private sector.

* Vladimir Rashevsky CEO

www.mdmbank.com

SERBIA AND MONTENEGRO

Raiffeisenbank

In less than three years of operations, Raiffeisenbank has succeeded in taking a leading position among foreignowned banks and is now the fourthlargest overall in Serbia. It wins the award for its consistent increase in market share, with a fourfold increase in lending to corporates last year and for its leadership in introducing new banking products across the board, being the first to offer housing loans to private individuals.

Expanding its range of offeringsthis year will see the introduction of new VISA card products, e-banking for individuals and a range of new loan products-is combined with expanding the branch network across the country, with another nine scheduled to open during 2004.

* Budimir Kostic, chairman

www.raiffeisenbank.co.yu

SLOVAKIA

Tatra Banka

Slovakia is the site of another country-best for a subsidiary of this year's overall winner, Raiffeisen, though the lower interest rate environment is changing Tatra Banka's focus from its traditional dominance in the corporate sector toward a more retail-orientated approach.

A pioneer in offering Internet banking, Tatra Banka continues to expand and refine its offerings at a time when customer requirements in Slovakia are becoming more differentiated. It already has leadership in private banking, mortgages and payment cards, and at a time when most Slovak banks are closing branches, Tatra Banka has the confidence to expand its 104-strong branch network. It is also profiting from synergies with its parent group, offering cheaper and speedier euro payments through other RZB-owned banks, as part of its overall strategy of servicing customer needs in the most cost-efficient way.

* Rainer Franz, chairman

www.tatrabanka.sk

SLOVENIA

Nova Ljubljanska Banka

Repeat-winner Nova Ljubljanska Banka holds more than a third of all banking assets in this most prosperous of EU accession states and is committed to remaining the country's leading universal bank despite growing competition from foreign banks.

Lending margins have been squeezed as interest rates dropped, but NLB responded by focusing on SMEs and especially in providing foreign currency export loans, which leapt by 143% last year. It is moving aggressively into the new savings market, and with profits comfortably up again in 2003, NLB will be difficult to dislodge from its pole position.

* Marjan Karmar, president of management board

www.nlb.si

TURKEY

Akbank

Akbank wins again this year after improved performances across the board. Its strategy of targeting SMEs and consumer credit has paid offboth in terms of market share and in a jump of 57% in net fee and commission income-as has its aggressive move into mutual funds, where it is now second-largest provider among private investment banks.

Already one of the best-capitalized banks in Turkey, Akbank strengthened its balance sheet while growing its assets at nearly four times the overall market rate. It improved its ROE to an impressive 30.3% and recorded a 24% increase in operating income-and looks set to improve further by focusing on higher margin segments and a more customer-responsive management structure.

* Zafer Kurtul, president and CEO

www.akbank.com.tr

UKRAINE

Privatbank

Ukraine's leading bank wins the award again this year for its continuing expansion into new areas and for another set of excellent results, with profitability nearly doubling on just over 10% net asset growth. Early investment in key technologies such as payment systems is also paying dividends.

With the Ukrainian economy on the rise once more, Privatbank is particularly well placed to benefit. It has an enviable core client list among the larger corporates. Meanwhile the bank is building its retail business by extending its range of products and services, including real estate and vehicle credit schemes.

* Alexander Doubilet, chairman

www.pbank.com.ua

UZBEKISTAN

National Bank of Uzbekistan

State-owned market leader National Bank of Uzbekistan has been a key player in the economic liberalization and ongoing privatization programs in this fast-growing but still very centralized economy. The bank has itself been going through a period of rapid change as it prepares for a 40% privatization slated for later this year, introducing new management systems to build greater transparency and accountability to its future shareholders.

The first bank in Uzbekistan to conform to International Accounting Standards (IAS), it expects to build on existing strong credit lines from the EBRD, the Asian Bank of Development (ABD) and others by directly tapping international markets. Last year its loan portfolio grew by nearly 40% while its client base grew by 20% thanks to an expanded range of services including Internet banking and an integrated card and ATM network.

* Zainiddin Mirkhodjaev, chairman

www.nbu.com

Regional Winner: BSCH

Spain's largest bank has invested some $17 billion in recent years to build a virtual Latin American banking empire that spans the region, leading some to contend BSCH is spearheading Spain's "re-conquest" of the Americas. Of the banking group's record euro2.6 billion in net attributable income last year (up 16.2% from 2002), euro1.49 billion came from its Latin American operations, which were also up 1.4.3% year on year. Recent financial crises throughout much of the region-prompted by economic recessions and currency devaluations-have forced BSCH to launch new strategies to deal with difficult market conditions and stay ahead of competitors. It sold a 50% stake in Mexico's Grupo Financiere Santander Serfin to Bank of America for $1.6 billion in 2002 (compared with the $1.55 billion it paid for 100% of the Mexican bank just two years before) and began downsizing its Banespa unit in Brazil as part of a broader plan to sell less-productive assets. Yet while others have fled, BSCH has maintained its firm commitment to the region and now plans to focus its Latin American efforts on three key markets: Brazil, Mexico and Chile. BSCH executives say the emphasis will be on expanding its profitable retail banking business, where it brings to the region nearly 150 years of experience and knowledge.

* Emilio Botin, president

www.bsch.es

ARGENTINA

Banco Macro-Bansud

Banco Macro-Bansud may have found the formula to working within a difficult business environment. While Argentine banks have been reeling from a financial crisis that triggered more than $18 billion in banking sector losses in 2002, Banco Macro-Bansud is one of the few remaining profitable institutions. As competitors struggled for survival, its deposits were up 24.3% and personal loans up 24% in the first half of 2003. The rest of the year was already looking promising, too.

Macro-Bansud's formula for success may lie in its commitment to implementing long-term strategy, an ability to retain strong shareholder support and its adherence to high standards of corporate governance. Another component of its winning strategy has been to focus its activities on provincial cities with large underbanked populations and less competition than in Buenos Aires.

It doesn't hurt that it is the financial agent for three provincial governments, for which it receives a healthy share of public sector deposits.

* Jorge Horacio Brito, president

www.bansud.com.ar

BARBADOS

FirstCaribbean International

It often pays to have good parents, and FirstCaribbean, launched in 2002, is a prime example. The bank combines the Caribbean operations of Barclays Bank and CIBC, each of which holds a 43.75% share.

As a pan-Caribbean bank, FirstCaribbean operates in 15 Caribbean countries and territories and, with a market capitalization of some $2 billion, is the largest publicly traded financial institution in the region. Its shares are actively traded on the Barbados, Trinidad and Tobago, and Jamaica stock exchanges.

Barclays and CIBC first began talks in 2001 to combine their retail, corporate and offshore banking operations throughout the Caribbean islands, resulting in the establishment of FirstCaribbean as a full-service bank. Its pan-regional presence has been particularly helpful for investors, who can now conduct transactions on several islands through a one-stop shop.With its head office in Barbados, the bank continues to gain market share, capitalizing on its parent companies' expertise and market recognition.

* Charles Pink, CEO

www.firstcaribbeanbank.com

BOLIVIA

Banco Bisa

Banco Eisa continues to be a banking sector innovator, having been the first bank to introduce ATMs and telephone banking in Bolivia. More recently, Banco Bisa introduced new cash management services for local companies as part of the bank's plan to provide Bolivian companies with a broader range of modern corporate solutions. Its efforts have gained it widespread recognition as the country's most trusted brand in the corporate banking sector.

Founded in 1963 as a second-tier bank, Banco Bisa went into the commercial banking arena in 1988. Today it offers a wide range of services that include deposit accounts, insurance products, leasing, credit cards and securities brokerage, among others. The bank offers a menu of short- and long-term financing options, including project and trade finance services. For more than a decade it has helped form a new generation of innovators by providing college scholarships to the nation's most outstanding students.

* Julio Leon Prado, president

www.grupobisa.com

BRAZIL

Banco Itau

Banco Itau has remained a stellar performer among Brazilian and Latin American financial institutions. In fact, Banco Itau has posted nearly $1 billion in annual pre-tax profits for five years in a row, making it one of Latin America's most profitable banks. While many of its local competitors were grappling with the country's sharp currency devaluation, Itau not only stayed afloat but went on to report net income of $1.09 billion in 2003.

Even in the depths of the country's economic crisis in 2002, it acquired Banco BBA, Brazil's largest corporate bank, for $930 million in a bold move that many at the time felt may have been too risky. But the risk paid off nicely, as the acquisition increased Itau's market share in the wholesale banking sector, adding to its already strong retail banking share. It also acquired Banco Fiat for $310.5 million that same year. The purchases were the latest in more than $4 billion in acquisitions since 1995.

* Roberto Elyria Setubal, president and CEO

www.itau.com.br

CHILE

Banco de Chile

Chile's second-largest bank, Banco de Chile is a star performer among the country's financial institutions. The bank posted net income of $220 million last year, for a hefty 146% increase over 2002. Profits from the bank's subsidiaries, particularly its stock brokerage and factoring units, drove the performance, but a 6.6% rise in assets and a 10.4% drop in total operating expenses also contributed to the windfall. ROE was 19.45% at end-2003, compared with 8.9% in 2002. Its efficiency ratio also improved to 52.9%, compared to 2002's 59.7%.

Controlled by the local Luksic family, Banco de Chile overtook Banco Santander Chile as the nation's largest commercial lender in 2003. when it scored a 19.5% share of the country's loan market; the Spanish banking giant's share was 18.8%. Banco de Chile's commercial loan book totaled some $4.3 billion last year, and the bank is expecting commercial loans to drive growth in 2004. Local analysts are betting its winning streak is not yet over.

* Segismundo Schulin-Zeuthen Serrano, chairman

www.bancochile.cl

COLOMBIA

Bancolombia

Created in 1998 through the merger of BIC and Banco de Colombia, Bancolombia is benefiting from improved credit quality and a Colombian economic rebound to remain the nation's largest bank in terms of both assets and deposits. Bancolombia is not only big; it's also profitable. Net profit was up 123% last year, to $174 million, compared with 2002, with profits coming from a diversified mix of investments, fees and interest income.

Annualized ROE was 31.1% in 2003, up from 20.4% in 2002, and ROA rose to 3.4%, from 1.88% in 2002. The bank improved its efficiency ratio to 54.3% in 2003 from 65.7% in 2002, as efficiency-boosting initiatives began paying off. Non-performing loans were a low 1.99% in January 2004. Bancolombia, the only Colombian bank listed on the NYSE, continued to set its sights beyond its borders when it opened an agency in Miami last year, adding to its subsidiaries in Panama and the Cayman Islands.

* Jorge Londono Saldarriaga, president

www.bancolombia.com.co

COSTA RICA

Banco Interfin

Interim is the most profitable private bank in Costa Rica, where state-owned banks dominate the market. The bank's assets rose from $485.3 million in 2002 to $592.3 million in 2003, when it posted profits of $5.1 million. Profits have been climbing steadily. Interim is a member of Enlace Bancario, an alliance of top Central American banks that pool their resources.

Founded in 1979 as a finance company servicing industrial and commercial clients, Interim became a multiple service bank in 1982. Since then it has focused mainly on gaining market share among large and medium-size local companies, for which designing corporate solutions remains a key priority. Its product offerings include personal and investment banking, leasing, loans, cash management and tax collection services, among others. Interim operates 18 branch offices throughout Costa Rica. In addition, it offers customers the convenience of Internet and telephone banking and a nationwide network of ATMs.

* Luis Liberman, general manager

www.interfin.fi.cr

ECUADOR

Banco del Pichincha

Banco del Pichincha was the top earnings producer among Ecuadorian banks last year, posting $18.9 million in net income in a country where the entire banking system, consisting of 22 commercial banks that are currently in a consolidation mode, reported net profits of $92 million. Pichincha not only took the lion's share of sector profits, but its performance far outpaced that of its closest competitor, Produbanco, which was the second-largest earner at only $12.8 million in profits.

Although big does not always mean profitable, Pichincha also happens to be Ecuador's largest bank, in terms of both assets and loans, with 26.3% and 26% of sector totals respectively. The bank, founded in 1906, is one of the nation's oldest financial institutions and is part of a much larger financial group that includes a portfolio of 20 other well-known companies, including banking subsidiaries in Peru and Colombia, an offshore bank in Nassau and an agency in Miami.

* Fidel Egas Grijalva, president

www.pichincha.com

EL SALVADOR

Banco Cuscatlan

Fast becoming Central America's leading commercial bank, Banco Cuscatlan not only operates in its home base of El Salvador, but also maintains subsidiaries in neighboring Guatemala, Costa Rica and Panama. While it awaits approval to extend its reach into Honduras and Nicaragua, the bank has already established strategic alliances with leading financial institutions in both markets to lay the groundwork for its full-fledged arrival.

Banco Cuscatlan has based its business model on a regional approach that includes the establishment of a regional management group. The move allows it to take advantage of economies of scale, while providing enough flexibility to meet individual market demands. It also operates a securities trading unit in Miami and a network of money remittance centers in the US to service Salvadoran immigrants. In 2003 the bank compensated for lower net interest income through increased trading gains, fees and commissions. Total assets were $3.55 billion m 2003, up from $3.08 billion m 2002.

* Mauricio Samayoa, president

www.bancocuscatlan.com

GUATEMALA

Banco Agromercantil

Despite its ranking as the country's fifth-largest bank, with a 6.6% share of assets and 7.48% of the loan market last year, Banco Agromercantil's profits soared by 200% compared with 2002, to $10.41 million. As was the case for most Guatemalan banks, most of the increase for Agromercantil last year came from higher fees and commissions, as deposits and loans declined throughout the nation's banking sector.

Founded in 2000 through the merger of Banco Agro and Banco Mercantil, the bank was initially created to service Guatemala's agricultural sector. Agromercantil now operates as a universal bank offering a full line of banking products. It operates 37 branches in Guatemala City as well as 40 others in cities throughout the interior. It also has two agencies in California and one in Chicago. The bank entered into an alliance with El Salvador's Banco de Comercio to offer money remittance services from the US to Guatemala.

* Jose Luis Valdes O'Connell, president

www.bam.com.gt

HONDURAS

Banco Atlantida

Banco Atlantida is Honduras's largest bank in terms of assets, which rose to $720.5 million in 2003 (16.3% of the total for the 16 banks in the Honduran banking sector) from $704.1 million in 2002. It also held a 16.6% share of the country's loan market last year, when the bank posted net profit of $7.9 million. Atlantida is a fairly big fish in a relatively small pond: The top five banks in Honduras control nearly 67% of the nation's commercial banking assets.

Founded in 1913, Banco Atlantida is part of a larger Honduran conglomerate. Much of the bank's success has been driven by its ability to attract new depositors by offering low fees and low minimum deposits to open accounts. The initial deposit on savings accounts, for example, is only 500 lempiras, equal to some $28. Higher-income depositors seeking to open an account in hard currency may do so with either $500 or euro500.

* Guillenno Bueso, president

www.bancatlan.hn

MEXICO

Banamex

Banamex is poised to become a model for how to manage a Latin American bank. Citigroup, which acquired Banamex for $12.5 billion in the largest-ever US-Mexico corporate merger, will now use the Mexican bank as a business model for its other Latin American operations. In fact, Banamex was Citigroup's top profit driver in the region, accounting for 8% of Citigroup profits as a whole.

Banamex reported $1.45 billion in net income in 2003, up from $1.21 billion in 2002, with nearly 50% coming from consumer lending. Banamex accounted for 29% of the Mexican banking sector's $10.05 billion consumer credit portfolio last year, for which it remains the country's largest private lender. It is also a leading player in the booming US-Mexico money remittance market. The bank, which has a 120-year history, operates a network of some 1,500 branches, which is why it seems there is always a Banamex office down the street anywhere one goes in Mexico.

* Manuel Medina-Mora, chairman and CEO

www.banamex.com

PANAMA

Banco General

Panama's second-largest private bank, Banco General is looking inward to expand its domestic operations in a bid to take market share away from its closest competitor, Banco del Istmo. The strategy is bearing fruit, as Banco General has already become the country's leading consumer and corporate lender. Total loans rose to $1.43 billion in 2003, compared with $1.38 billion in 2002. It continues to post better results than its competitors and can boast of having the country's lowest non-performing loan ratio, at just over 2%.

Established in 1955, Banco General grew through the acquisition in 1999 of Bancomer, a Panamanian bank focused on the country's growing mortgage sector, in a strategic move that allowed it to expand into other lending activities. Its conservative yet profitable lending practices led to sustained profitability in 2003, with retained earnings continuing to boost capital. Total assets rose to $2.5 billion last year, compared with $2.4 billion the year before.

* Raul Aleman, general manager

www.banco-general.com

PERU

BBVA Banco Continental

In 2003 BBVA Banco Continental pursued an aggressive plan to increase its efficiency ratio, reaching 41% in mid-2003, compared with 60% for the Peruvian banking system. Although BBVA Banco Continental-owned by Spain's BBVA and the local Brescia Group-is still ranked as Peru's second-largest bank, behind Banco de Credito, it is nevertheless the country's most profitable financial institution.

The bank posted a 58% rise in net profit, to $50 million last year, mainly on account of efficient cost-cutting measures that had been launched earlier and continued in 2003. Another factor in its success was its ability to slash non-performing loans to 3.7% in mid-2003 in a strategy that will prove particularly beneficial for long-term profitability now that the bank's fastest-growing business segments include mortgage and retail lending. In a strategy to maintain its retail customer base, the bank has launched customer loyalty plans that range from frequent contests to reward points.

* Pedro Brescia Cafferata, president

www. bbvabancocontinental.com

PUERTO RICO

Banco Popular de Puerto Rico

Banco Popular continues to be Puerto Rico's largest bank, with more than $36.4 billion in total assets in 2003, up from $33.7 billion in 2002, arid nearly 200 branches. Net income has risen steadily to $470.9 million last year, from $351.9 million in 2002 and $304.5 million in 2001. Popular Inc., the bank's holding company, with more than $35.8 billion in assets, also operates local securities, insurance and mortgage subsidiaries that allow the bank to offer its clients a broader portfolio of financial products.

Popular's reach extends far beyond the island. Its GM Group unit is Latin America's largest information systems integrated solutions and processing services provider. The bank operates eight branches in the US and British Virgin Islands, as well as a broad network of ATM and POS terminals in the Dominican Republic and Costa Rica. Its mainland US operations include Banco Popular N.A., the largest Hispanic bank in the US, with 32 branches in five states.

* Richard Carrion, chairman, president and CEO

www.bancopopular.com

TRINIDAD AND TOBAGO

Republic Bank

When Republic Bank was founded as Colonial Bank in 1837, its founders had little clue that the bank would one day go on to become a financial powerhouse throughout the Caribbean. Republic continues to grow through acquisitions that most recently led to last year's purchase of the Dominican Republic's Banco Mercantil, in a deal that boosted the Trinidadian bank's assets by 34%, to $25.8 billion.

The acquisition spree is far from over. Last year it also acquired the Barbados National Bank. It had already taken majority stakes in Trinidad's Bank of Commerce and Guyana's Bank of Industry and Commerce in 1997.

So far, the strategy has paid off, and last year's profits allowed the bank to install a new core computer system that should help further integrate its regional operations. Republic is not disregarding its loyal clients at home. It still operates the country's largest branch and ATM network.

* Ronald Harford, chairman

www.republictt.com

URUGUAY

ABN AMRO Uruguay

ABN AMRO Uruguay appears unsinkable. When Uruguay's banking sector was nearly crippled in 2002 by a financial crisis in neighboring Argentina, which wiped out almost 40% of Uruguayan bank deposits, the bank's assets fell 32.2% but its profits were up 55%. In fact, ABN AMRO was the country's only profitable bank amid the crisis, with ROE rising to 37.4% in 2002 from 28% in 2001.

The largest foreign bank in Uruguay, ABN AMRO's performance remained strong last year, when it also boosted its share of the local credit card market to 31%. Having access to ABN AMRO's international know-how means the bank can adapt quickly to changes in market conditions. Its portfolio of offerings includes payroll services and foreign trade operations, with both segments poised for growth amid the country's economic recovery. The bank operates a network of 23 branches throughout Uruguay and offers both basic and business online banking alternatives.

* Eric Simon, country representative

www.abnamro.com.uy

VENEZUELA

Banco Mercantil

Despite a turbulent business environment, Banco Mercantil continues to do the right things to retain its leadership position as Venezuela's largest private bank, with a 16.3% share of sector deposits, 15.2% of total assets and 1.4.6% of loans last year-not a small feat in a country plagued by political upheaval. Although its ratio of non-performing loans is high, at 5.6%, it is lower than the 7% ratio for the country's banking sector as a whole.

Much of Banco Mercantil's continued success is driven by smart management decisions, including a strategy to invest excess liquidity in safe but high-yielding government securities.

Mercantil Servicios Financieros, the bank's locally owned holding company, also controls Commercebank, a US bank with offices in Florida, Texas and New York. In addition to operating an extensive network of branches and ATMs throughout Venezuela, the bank maintains representative offices throughout Latin America, as well as in London and Zurich.

* Gustavo A. Marturet, president

www.bancomercantil.com