Global Finance: What is the Philippines economic growth outlook for 2024-25?

The outlook for domestic output growth over the medium term is largely intact. With 6.3% growth in the 2^nd quarter, it would likely settle within the government’s target in 2024 as a whole. We expect growth to be supported by robust construction spending and the timely implementation of various government programs.

GF: The Philippines Central Bank (BSP) was the first major central bank in Asia to cut rates following the widespread regional post Covid-19 monetary tightening. Is the bank comfortable acting ahead of the Fed?

Eli Remolona: The BSP takes a data-driven approach to policymaking. The cut in rates in August was driven by our projections of inflation and growth based on the latest data on domestic conditions. The timing of the FOMC’s actions did not play much of a role in our decision.

In fact, about two months before our latest policy rate cut, our forward guidance already indicated that we expected to shift to a less hawkish monetary stance. I also mentioned during an economic forum in early July that the BSP did not need to wait for the US Fed to cut rates before we do.   

The rate cut [in August] came amid a favorable inflation outlook. A key factor to this is the recent Executive Order lowering the tariff on rice imports. Rice is the staple in Filipino households, and so changes in rice prices have considerable impact on overall inflation. In addition, core inflation has continued to ease, with a September reading of 1.9%.

Our latest estimates show that even if some risks to inflation materialize, inflation will settle at 3.3 % this year, 2.9% next year, and 3.3% in 2026. These are all within the target range of 2-4%.

With inflation now on a target-consistent path, we have room for a calibrated shift to a less restrictive monetary policy stance.  

The reaction of financial markets to the BSP easing its policy rate earlier than the US Fed has been relatively muted, with the Philippine peso weakening only slightly versus the US dollar right after the recent policy decision and has since continued to appreciate.

GF: How has BSP’s prior policy-rate tightening impacted the Philippine’s key economic variables, and what direction are domestic interest rates headed?

Remolona: Previous policy rate increases had some dampening effect on demand, including credit activity. Nevertheless, the impact of tight financial conditions was something the domestic economy could absorb — as indicated by sustained GDP growth and improving employment conditions.   

On the domestic interest rate path, the current macroeconomic outlook, including target-consistent inflation, supports a calibrated shift to a less restrictive monetary policy stance. However, the BSP will continue to monitor lingering upside risks to prices, including those coming from higher electricity rates and external factors.

GF: What is the outlook for credit growth and credit quality in the Philippines over the next year?

Remolona: The country’s banking sector has been a reliable source of strength for the economy. Bank lending has consistently grown to support economic activities without compromising credit quality. We attribute this in part to prudent lending standards of banks.

Total loan portfolio of the country’s banking sector amounted to P14.2 trillion ($254 billion) as of end-July 2024, up by nearly 11% from a year ago. Of this loan portfolio, non-performing loans account for 3.58%, which is very manageable.

We expect the trend of robust loan growth and good credit quality to continue in the months ahead.

GF: How significant are ESG considerations and the net zero commitment to the BSP’s modus operandum over the medium term?

Remolona: The Philippines had committed to peak carbon emissions by 2030. At the same time, we recognize that climate change poses challenges to our mandates of promoting price and financial stability. This highlights the urgent need for central banks and supervisors to refine monetary and prudential tools to take account of ESG factors.

Firstly, monetary policy decisions will need to take increasing account of the physical risks of weather events. These threaten to present supply shocks that are more significant than the recent shocks in oil and food prices. In the case of the Philippines, these shocks led to an inflation rate of 8.7% in January 2023, the highest in 14 years. It is evident that we can no longer look through these shocks since they change inflation expectations and lead to significant second-round effects. 

Climate change also presents a major challenge to our mandate of promoting financial stability. We think climate risk is the ultimate systemic risk. While we have issued regulations that embed ESG considerations into bank’s risk management frameworks, we must enhance our surveillance tools further. 

We are collaborating with relevant government agencies and other stakeholders to leverage available data, models and expertise in order to strengthen our understanding of climate risk and its impact on the financial system. Our efforts to deepen the domestic capital market and provide alternative funding sources aim to channel funds toward eligible green or sustainable projects.  In addition, the BSP is pursuing an inclusive sustainability agenda. Our initiatives to increase capital flows and green finance to promote just transition and resilience building are also designed to benefit the most climate vulnerable segments, such as the agriculture sector, and small and medium enterprises. 

Moreover, the BSP is committed to incorporating sustainability in its own operations. As a signatory to the UN-supported Principles for Responsible Investments, we are dedicated to integrating ESG considerations into our investment practices.

Global Finance: What is Mongolia’s economic growth outlook for 2024-2025?

Byadran Lkhagvasuren: The Mongolian economy grew by 5.6% in the first half of 2024, mainly driven by high growth in the mining and transportation sectors as well as in the service sector, despite the sharp decline in the agriculture sector. The growth outlook for 2024 and 2025 remains favorable, supported by strong external demand and a significant rise in the Oyu Tolgoi mine’s copper concentrate production. Significant growth in coal exports and the transportation sector have been the main factors driving economic growth, which is expected to be sustained at around 6% this year and 8% next year. Certainly, any unpredictable changes in external conditions and policies of leading economies continue to be a main source of uncertainty.

GF: Mongolia’s foreign exchange reserves increased last year and external debt was reduced. What have been the benefits of this positive backdrop, and is it likely to continue?

Lkhagvasuren: As of July 2024, Mongolia’s foreign exchange reserves reached $4.7 million, reflecting a 23.8% increase from the last year. Several factors have strengthened Mongolia’s external position. In particular, the current account balance was in surplus, largely due to a strong recovery in coal exports in 2023. The government also implemented effective debt management strategies by refinancing parts of the sovereign bond, with no major external bond maturities until 2026. The Bank of Mongolia started repaying the PBoC [People’s Bank of China] swap line in late 2023 to reduce interest costs and improve the central bank’s balance sheet. Despite repaying 6 billion Chinese yuan [$843 million] of the swap usage, foreign exchange reserves remained robust. Based on our current projections, gross reserves are expected to increase in the short to medium term. Maintaining an adequate level of foreign exchange reserves is crucial for ensuring economic stability, fulfilling the country’s international financial obligations, reassuring foreign investors, and strengthening the national currency.

GF: How has the BOM’s rate policy impacted Mongolia’s key economic variables, and where are interest rates headed?

Lkhagvasuren: The tight monetary policy has effectively eased the demand-driven inflationary pressures and prevented inflation from the second-round effects. The supply-side price increases have also decelerated due to the reduced transportation costs for imported goods, while the favorable external conditions—with strong export performance—eased the exchange rate pass-through on inflation. As a result, inflation has declined to the midpoint of the target range in 2024 and is expected to remain within the target range for the medium term. Inflation may slightly rise next year, considering several factors causing inflationary pressures. Aside from the uncertainties surrounding the external environment, the expected increase in fiscal spending will fuel demand-driven pressures on inflation. The ongoing discussions about raising electricity and heating prices may have set the stage for cost-related price hikes. The future direction of the policy stance will depend on these risk factors for price increases, depending on developments in domestic and external markets. [In mid-September, the central bank cut rates 100 basis points to 10%.]

GF: What will be required over the next five years if Mongolia’s Vision 2050 is to be achieved?

Lkhagvasuren: As outlined in Vision 2050, achieving macroeconomic stability and transforming the middle class into the predominant group requires maintaining the inflation rate at its target level and pursuing a managed, flexible exchange rate to absorb and mitigate any external shocks. Moreover, given the Mongolian economy’s vulnerability to external shocks, diversifying the economic structure and setting priorities for investment projects—without compromising external and internal balances—is crucial for sustainable economic development.

With the growing impact of climate change, the Mongolian financial sector has been emphasizing the promotion of green finance initiatives. Mongolia has made ambitious commitments, as part of the Paris Agreement, to lower its carbon emissions by 22.7% against the business-as-usual scenario by 2030. In light of the achievement of sustainable goals, Mongolia became the second country in the world to develop and enforce a green taxonomy in the financial sector. The green taxonomy was approved by the Financial Stability Committee in 2019. Since then, banks have been reporting to the central bank on their green financing according to the taxonomy. The Financial Stability Committee approved the National Sustainable Finance Roadmap in 2022. This important document heightened the commitment of not only the BOM but of all relevant stakeholders in furthering the green finance cause. The goal of the Roadmap is to increase green lending to 10% in the banking sector and 5% in the non-bank financial sector by 2030.

Reserve Bank of Australia veteran Michele Bullock took the helm as the bank’s first female governor in September last year during intense soul-searching at the institution, which had come under critical scrutiny during the tenure of her predecessor, Philip Lowe. As such, Bullock has been hyped as a change agent at the RBA, although the only notable change under her watch has been the transfer of decisions on the crucial cash rate to an interest-rate-setting board, while another board takes care of the RBA’s day-to-day operations.

Since February, monetary policy decisions have been made at two-day meetings held eight times a year rather than the previous one-day, once-a-month regime. The cash rate remains at a 12-year high of 4.35% in the face of stubborn inflation, which hit 3.8% in the second quarter, outside the RBA’s 2%–3% target.

Central bank Governor Taleh Kazimov, in office since 2022, had a boost in July when Fitch Ratings upgraded Azerbaijan’s long-term foreign currency issuer default rating to BBB- from BB+ with a stable outlook. Fitch cited a robust external balance sheet, noting that the country’s sovereign currency assets—80% of which are held by the country’s sovereign wealth fund, SOFAZ, with the remainder at the central bank—will hit $74 billion this year. This equates to 98% of projected GDP and is well above the 55% recorded when the agency first rated Azerbaijan as investment grade in 2010.

Government debt is low, at around 23% of GDP, and headline inflation was a scant 0.7% in June. This allows for an increasingly relaxed monetary regime, with the refinancing rate held steady at that month’s central bank meeting following five consecutive rate cuts. Fitch estimates 2024 inflation at 2.5%, comfortably inside the central bank’s 4%, plus or minus 2%.

Bangladesh is in turmoil following Prime Minister Sheikh Hasina’s July flight from the country, which resulted from widespread student-led civil unrest. After 15 years at the helm of an often brutal regime, Hasina provided the last act of a dynasty in power on and off since independence in 1971. Nobel peace laureate Mohammad Yunus was appointed interim prime minister, and in August, he selected Ahsan H. Mansur to be central bank governor.

The political turmoil fuelled a spike in inflation, which hit 11.66% in July amid fast-dwindling foreign exchange reserves. Mansur announced plans to hike the benchmark rate by 50 basis points to 9%, and stated that rates would hit 10% within the coming months. Negotiations were opened, with the IMF agreeing to supplement a $4.7 billion bailout program hammered out in January 2023 by an additional $3 billion.

Bangladesh has suffered years of financial system dysfunctionality. Still, the full extent of the malfeasance of Hasina’s Awami League regime is set to emerge, as Mansur described the “designed robbery of the financial system” in a BBC interview given shortly after his appointment.

Deposits have fled, and non-performing loans have soared.

“They took the money and put it in Singapore, Dubai, London and elsewhere. So, the first effort would be to try to take people to task and get the money back,” said Mansur, who is establishing a banking commission to undertake a comprehensive audit of domestic banks, replace management and inject capital. He estimates that the country’s Islamic banks must be recapitalized to $15billion to $30 billion.

Neophyte Governor Chea Serey, who assumed office in July 2023, has enjoyed a “Goldilocks” opening act to her tenure, following in the footsteps of her well-respected and market-savvy father.

Executing monetary policy is a tricky balancing act in a country that uses the US dollars and a local currency. The Cambodian riel has been gifted a fortuitous tailwind in the form of buoyant international reserves that have surged 12.3% in 2023 to $20 billion, covering seven months of goods and services imports.

Riel stabilization has been achieved by prudent circulation management and foreign exchange market intervention, usually involving selling US dollars versus the domestic unit on the open market.

According to World Bank data, inflation fell to zero in March as food prices decelerated. The current account recorded an unprecedented surplus last year as the trade deficit contracted and tourism surged. Despite a slowdown in domestic credit growth, GDP expanded by 5.6% in 2023 and is forecast to hit 5.8% in 2024, according to the World Bank.

China’s GDP growth hit 5% in the first half of this year, a solid result considering the country’s ongoing real estate crisis, weak domestic demand and burdensome local government debt. However, the second quarter’s base effects account for some of this strength. But that growth rate comes in the context of deflation—China’s GDP deflator is zero and threatening to turn negative. Producer prices have been declining for two straight years, and consumer prices rose by an average of just 0.2% in the first half of the year.

The People’s Bank of China (PBoC) has indicated a sharp focus on the domestic bond markets as a monetary policy tool. In July, the bank launched temporary repo or reverse repos to optimize open market operations and ensure the banking system’s liquidity.

This indicates a radical shift in the PBoC’s monetary policy thinking under Pan Gongsheng, who took over as governor in July last year. In September, the PBoC cut its benchmark seven-day interest rate by 20 basis points to 1.5% and dropped commercial banks’ reserve requirements by 50 bps.

Pan has emphasized monetary policy stability amid widespread calls for radical easing, forecasting that inflation will increase to 1% by year end. The PBoC’s second-quarter monetary policy implementation report, said that prudent monetary policy should be “flexible, moderate, precise and effective.”

The Hong Kong Monetary Authority (HKMA) sets policy in lockstep with the United States to maintain the Hong Kong dollar’s peg to the US unit at a tight 7.75-7.85 per greenback. Reflecting Federal Reserve policy dynamics, it therefore mirrored the Fed’s 50 basis point cut on September 18, for a 5.25% benchmark rate. Governor Eddie Yue once again displayed his quiet competence, with the HKMA noting in a comment following that rate decision that Hong Kong’s financial and monetary markets continued to operate in a smooth and orderly manner, with the Hong Kong dollar exchange rate remaining stable.

GDP growth hit 7.8% in the first quarter, moderated to 6.7% in the second and is on track to hit the Reserve Bank of India’s (RBI) full-year 7.2% growth target.

Governor Shaktikanta Das voiced confidence when he spoke at a conference in August in Odisha, India: “I would like to say with all humility and sincerity and with all confidence that the Indian growth story is intact,” he said, noting the plus-7% growth registered across India’s main economic sectors in the first quarter, including investments (+7.5%), services (+7.7%), manufacturing (+7%) and construction (+10.5%). Crimped government spending and a weak performance from the agricultural sector (+2%) capped a stellar growth performance.

Retail inflation eased to 3.54% in July from 5.08% in June, versus a market consensus of 3.65%. It was the softest rise in consumer process since August 2019, and marked the first time inflation remained within the RBI’s target 4% range in five years, albeit assisted by base effects.

Das presides over an ever-strengthening domestic financial system, with robust capital adequacy, low levels of non-performing assets and solid profitability at the banks and non-bank financial companies (NBFCs). This system is anchored in an improving governance ecosystem focused on risk management and internal controls under the umbrella of ESG-focused structures.

“As risks evolve and new challenges emerge, the reserve bank as a regulator and supervisor constantly focuses on being vigilant, adaptive and proactive about the regulatory frameworks and supervisory systems to safeguard the stability of the financial system,” said Das in a speech to the College of Supervisors in Mumbai in June.

Bank Indonesia Governor Perry Warjiyo has placed the risk of capital outflows at the center of his radar amid calls for a reduction in policy rates as inflation moderated to just 2.13% in July, the slowest reading in two years. He might also have a sharp eye on the rupiah, which has fallen 6.6% against the US dollar this year, even against relatively high domestic interest rates—the benchmark rate sits at 6% after a 25 basis point cut on September 18.

“We held at 6.25% while waiting for better global conditions, when there’ll be room to cut,” said Warijo at a quarterly press briefing in Jakarta in August, referring to the decision to stay rates in July.

Kazuo Ueda is not scared of springing surprises on the market, as he did in July when he pushed for a hike in the policy rate to a target of “around 0.25%” from 0%-0.1%, contrary to the market consensus. In doing so, he continued to unwind 17 years of ultraeasy money in Japan—a process he kicked off at the start of his tenure in 2022. This unexpected hike came during a profound and prolonged period of yen weakness, and tightening did the trick for the yen, which surged against the dollar and Asian currencies.

The impact of the yen’s weakness on Japanese inflation might yet prove fortuitous, as wages continue to rise and the elusive prize of rising household consumption draws nearer. Core CPI hit 2.7% in July—a five-month high—as import-dependent Japan felt the full impact of all-time low yen weakness.

“Initial wage settlements … are at their highest level in three decades … and the probability of achieving a stable 2% inflation rate has increased enough to justify the outlined policy normalization,” said Ueda in a speech delivered to the Peterson Institute for International Economics in May.

National Bank of Kazakhstan (NBK) Governor Timur Suleimenov has presided over healthy domestic-demand-led GDP growth since assuming office in September last year, boosted by infrastructure project spending, oil sector investment, educational facility construction and housing modernization. Bank lending to small businesses increased by 24%, and the overall loan mix as of December was 53.3% for the consumer sector and 46.7% for the business sector. Growth came in at 5.1% for 2023 against a moderating inflationary backdrop; CPI declined to 9.5% in January versus 20.7% the previous year, still ahead of NBK’s 5% target. This has allowed for a reduction in the base rate since August 2023 in four increments totaling 225 basis points, bringing the rate to 14.25% in August. 

The National Bank of the Kyrgyz Republic (NBKR) held policy rates steady at 9% following its July meeting, in the face of moderating inflationary pressure and economic recovery. Real GDP increased 8.8% in the first quarter and inflation was subdued at 5.2%—inside the NBKR’s 5% to 7% target.

The Asian Development Bank forecasts GDP growth at 5% for this year, driven by reduced growth in construction and services. The country’s often-turbulent political backdrop has given way to relative stability since 2021, and the country has benefited from ADB financing in the form of public sector loans, grants and technical assistance initiatives totaling $2.6 billion. A notable ADB financing last year was a $40 million project to promote climate-resilient agricultural value chains.

The governor of the National Bank of Laos Republic, Bounleua Sinxayvolavong, was removed from office at the start of July in the face of a burgeoning economic and financial crisis exacerbated by the collapse of the Lao kip, which lost more than 30% of its value against the US dollar last year, propelling inflation that rising fuel prices had already stoked. Basic food security and nutrition are in jeopardy in the landlocked country, according to the Asian Development Bank.

Bounleua was replaced by acting Governor Vathana Dalaloy, who previously served as the central bank’s deputy governor.

The country is locked in a debt spiral—its external public debt-servicing costs surged to $950 million last year from $507 million in 2022, with the national debt totaling around 125% of GDP, and 44% of government expenditures going toward debt service.

Talk of a failed state is widespread amid stagnant wages and collapsing education and health services. The kip is shunned within the business community in favor of dollars or Thai baht, and the black market is the effective arena for business transactions; exports were valued at $8.2 billion in 2022, but only $2.7 billion entered the country. The received wisdom is that China, to whom much of Laos’ external debt is owed, will not allow the country to go bust. For now, chaos reigns.

Bank Negara Malaysia Governor Abdul Rasheed Ghaffour, in office since July last year, has kicked off his tenure in great style. In the second quarter, GDP surged to its highest level in 18 months to 5.9%, via a fortuitous mix of buoyant household spending and stronger exports and investment.

That represents an about-face from the start of this year, when the ringgit came under extreme pressure, collapsing to a 26-year low versus the US dollar in February and recovering subsequently by over 3%. The inflation dynamic is reasonably benign, with headline and core inflation averaging 1.8% in the first half, although BNM projects an average 2%-3.5% rate for the rest of the year, as fuel-subsidy cuts add to inflationary pressure. Benchmark rates are expected to remain unchanged at 3%.

Governor Byadran Lkhagvasuren is presiding over an enviable external position and growth dynamic as he approaches five years at the helm of the Bank of Mongolia (BOM). The current account balance is in surplus thanks to surging 2023 coal exports. The BOM has meanwhile executed deft debt management thanks to past liability exercises, with no debt maturities to repay until 2026. External sovereign debt and swap lines to the PBoC have been paid down (to the tune of 6 billion Chinese renminbi), and foreign exchange reserves have surged 23% to $4.7 billion.

Non-performing loans in the banking system fell to 5.3%, the lowest level since 2015, and of the 33.3% growth in credit last year, the bulk was in the retail segment, with loans to the mining sector moderating. At 5.5% in the first half, inflation was inside BOM’s 6% target level, plus or minus 2%, and likely to remain restrained. At the same time, the growth trajectory is positive. The economy grew 5.6% in the first half thanks to strong mining and transportation sectors and is forecast to hit 6% in 2024 and 8% in 2025.

Citing these accomplishments, global rating agency Fitch upgraded Mongolia’s long-term foreign currency rating to B+ with a stable outlook in mid-September.

The country faces various economic challenges, including ongoing conflict that disrupts land-border trade with China and Thailand and domestic supply chains. In the six months to March, merchandise exports and imports collapsed by 13% and 20%, respectively, according to the World Bank. A staggering 3.1 million individuals were internally displaced, according to a June report from the World Bank, and a third of the population is estimated to be in poverty.

Widespread electricity outages have forced businesses to rely on expensive diesel-generated power. Around 33% of Burmese businesses reported that power outages were their primary challenge in April, compared to 12% as recently as September.

Such a backdrop is inherently inflationary, and the ongoing kyat depreciation, which has dropped around 20% versus the US dollar this year, exacerbates the price pressure.

The World Bank estimates that GDP rose just 1% in the year to March, or around 10% below pre-pandemic levels. Labor market participation is low, with unemployment estimated at 8.1% as of the end of last year. Inflation is expected to moderate to 18% this year from 26.5% in 2023 but will continue to be pressured, not least due to ongoing central bank financing of the fiscal deficit.

Nepal Rastra Bank tightened monetary policy last year to diffuse inflationary and foreign exchange reserve pressure. It raised the policy rate and curbed lending to banks, which had ballooned by more than 500% during the Covid-19 pandemic. As a result, credit growth fell to 4.6% from 13.3% in 2022.

Moderating inflation allowed for a 100 basis points cut in the policy rate in December, and the inflation dynamic continued to improve, averaging 6.4% in the first half of this year on the back of subdued oil and commodity prices. Growth fell to just 1.9% last year from 5.6% the prior year, and is forecast by the ADB to hit 3.6% this year.

The Reserve Bank of New Zealand’s Adrian Orr presides over the third recession in less than two years. His campaign to overcome ingrained inflation—and hit the RBNZ’s 1%-3% target—has taken its toll on the country’s low-productivity economy.

Indeed, such is Orr’s hypervigilance on silencing inflation that he stated at an RBNZ press conference in May that the bank had considered raising rates at that month’s policy-setting meeting. In the event, the official cash rate was held steady at 5.5%.

“The disappointing part is how stubborn domestic inflation remains. We don’t determine productivity; we just deal with the product we’ve got,” said Orr in an interview in May. He noted that inflation for many parts of the economy had fallen, “but we are now at the stubborn tail, which is not surprising.” GDP growth was just 0.3% in the first quarter. The chorus from the New Zealand financial media is that Orr’s draconian inflation campaign is inflicting substantial damage on New Zealand’s economic fabric.

The hope is that Pakistan is turning the corner after over three years of economic turmoil. The signs are encouraging. From an all-time 22% high in benchmark rates, the State Bank of Pakistan has trimmed by 250 basis in two moves since June. That comes on the back of moderating inflation, which was 11.1% in July and hit the single-digit level—9.6%—in August for the first time in three years, having ballooned to 30% last year. In July, Pakistan reached a staff-level agreement with the IMF for a $7 billion bailout, and a new state budget containing ambitious tax collection levels was passed.

Eli Remolona, appointed governor of the Bangko Sentral Ng Pilipinas (BSP) in June 2023 by President Ferdinand Marcos Jr., hit the ground running in the first year of his governorship of the Philippines Central Bank. Former Federal Reserve economist Remolona inherited a 17-year policy-rate high of 6.5%. With the five-month headline CPI rate averaging 3.5% in the first half of 2024, inside the BSP’s 2%-4% target, the stage was set for a rate cut.

This well-telegraphed cut was the first from a major Asian central bank since the post-COVID tightening cycle kicked off. The August cut arrived as a 25 bps easing in the overnight borrowing rate. The bank expects to adopt a further 50 bps cut in October to match the Fed’s September rate cut.

GDP growth hit 5.7% in the first quarter and is forecast by the IMF to hit 6% in 2024, supported by recovering domestic demand and exports.

Incoming Monetary Authority of Singapore (MAS) Managing Director Chia Der Jiun faced the initial challenge of sticky inflation after assuming office in January—core CPI was 2.9%. He elected to retain a tight monetary stance as expressed in Singapore’s exchange-rate-based monetary policy band known as the Nominal Effective Exchange Rate, or S$NEER.

That was a savvy call; core prices increased by 2.4% in July, the lowest rise since 2022. That month, speaking at the release of the MAS’s annual report, Chia said that core inflation in the city-state is expected to ease significantly in the final quarter and that GDP growth of 2%- 3% is achievable as major sectors of the economy return to pre-pandemic growth rates, an outcome that would significantly improve on 2023’s anemic 1.1% GDP print.

At the annual report release, Chia announced the monetary authority’s commitment of 100 million Singapore dollars (about $76.6 million) to support the domestic financial industry in building quantum and AI technology capability, and he also highlighted the booming Singapore asset and wealth management industry. He inherits a tight ship: the MAS made a 2.8 billion Singapore dollar profit in the 2023-24 financial year. 

The Bank of Korea (BoK) has presided over interest rate extremes since the Covid-19 pandemic. It cut benchmark rates to a record 0.5% low in May 2020 and pushed them up to 3.5% in January, where they have remained. BoK Governor Rhee Chang-yong cited financial stability risk considerations as a determining factor for monetary easing; ensuring financial system stability is one of BoK’s core mandates.

“In terms of price stability alone, the mood is right to discuss interest rate cuts,” Rhee said at a press conference in July following BoK’s decision to leave rates unchanged for the 12th consecutive time, but “market expectations [for rate cuts] do look excessive in some ways.”

This caution is partially explained by the fact that South Korea has the highest household debt-to-GDP ratio, and the Bank of Korea is concerned about a potential surge in mortgage loans on the back of easier money. A weak won, which is off around 7% versus the US dollar this year, has enhanced inflationary stickiness—even though CPI moderated to 2.4% in June, just outside BoK’s 2% target.

The country is on track to reverse over two years of economic and financial system turmoil. Gross Official Reserves hit $5.4 billion in May, a $1 billion gain since the end of 2023—a singular rebound given the collapse of reserves to a record low in 2022—and the rupee appreciated against the US dollar and local Asian currencies.

GDP growth is forecast to hit 3% in 2024 following a 2.3% contraction last year, boosted by a 50 basis point cut in the benchmark standing deposit facility rate and the standing lending facility rate in March, to 8.5% and 9.5%, respectively, afforded by a sharp contraction in inflation, which rose a scant 2.4% in July. The only cloud hanging over a commendable performance by central bank Governor Nandalal Weerasinghe is the ongoing government offshore debt restructuring negotiations, in which new terms are being sought by holders of $12 billion of Sri Lanka’s foreign debt.

The Central Bank of the Republic of China (Taiwan) shocked markets in March with a policy rate increase from 1.875% to 2% following its quarterly meeting. Governor Yang Chin-long said the discount rate tightening was a “little surprising.” Still, he placed it in the context of an uncertain global inflationary outlook, with inputs including the strength of the Chinese economy, supply chain issues, geopolitical risks and climate change.

The central bank’s monetary tightening campaign has been explicit. Since March 2022, there have been six discount-rate hikes totaling 87.5 basis points, accompanied by three reserve ratio requirement (RRR) increases totaling 75 bps, with the last 25 bps RRR hike made in June. 

Taiwan’s inflationary backdrop has been clouded by a weak Taiwan dollar. The unit was down by more than 6% over the review period. It hit an eight-year low in July as local equities slumped, led by chipmaker Taiwan Semiconductor Manufacturing amid concerted foreign portfolio selling. Inflation surged to 3.08% in February, up from 2.8% the prior month. But the monetary tightening has begun to bite, and core CPI increased by a scant 1.99% in the year to July.

GDP growth declined to 1.31% last year due to soft global demand and weak domestic capital investment, even though post-Covid consumption picked up. Growth surged by 5.83% in the first half of this year, according to the Directorate General of Budget, Accounting and Statistics. The central bank forecasts full-year growth at 3.77%, up from an initial 3.22% projection.

The one-day repurchase rate remains at its highest level in more than a decade—2.5%. And action from the Bank of Thailand (BOT) is unlikely as the bank waits for signs of fiscal stimulus from the incoming administration led by Prime Minister Paetongtarn Shinawatra, who assumed office in August. Private domestic demand has weakened this year, prompting calls for a rate cut and increasing the likelihood of a strong fiscal stimulus package, including a 500-billion baht (around $14.6 billion) “digital wallet” handout to 50 million households.

Growth was robust at 6.2% in the first quarter. That builds on the 6% chalked up last year, propelled by expansionary fiscal policy, frothy private consumption and surging fixed investment. The inflationary dynamic is auspicious, with CPI falling to 8.1% in April from 12.3% at the end of 2022. The IMF projects real GDP growth at 5.4% this year, supported by strong domestic demand.

The State Bank of Vietnam (SBV) has monitored household growth closely over the past year. It has overseen 6% credit growth in the banking system, encouraged concessional lending in the residential property market, and pressed credit institutions to reduce operating costs so that lenders can offer lower loan rates to retail customers.

This has encouraged a healthy, diverse growth dynamic. GDP growth was a heady 6.9% in the second quarter of this year, marking the strongest reading since Q3 2022. First-quarter growth was revised up to 5.87%.

Headline CPI averaged 4.08% in the first six months of the year—the highest reading since January 2023, but inside SBV’s 4%-4.5% target—with price pressures emerging from the education and healthcare sectors. Core CPI chalked up a 2.75% increase. Still, the trajectory appears favorable: Headline CPI fell back to 3.45% in August.

The banking industry emerged triumphant in 2023, a year that had threatened to be catastrophic. Rapid industry intervention averted the nightmare scenario of a contagion-driven financial crisis fueled by multiple bank failures in the US and Europe.

Last year’s mini-crisis of bank failures was best seen as the result of idiosyncratic management lassitude at the eventually rescued banks. However, the exposed risks inherent in app-based banking and the potential for bank collapse based on rapid mass deposit withdrawals provided a wake-up call for the industry, most pointedly among the rapidly proliferating neobank challengers.

As a result, boosting the current account savings account ratio and improving the “stickiness” of deposits became a central focus for bank CEOs last year.

As in 2022, the net interest margin (NIM) environment was optimal due to tight central bank monetary policy. Last year, a long-absent dynamic entered the fray: positive return on equity, which reemerged after being negative or flat in the 15 years since the global financial crisis of 2007-2009 and averaged 9% last year.

Bank profits in the Asia-Pacific region soared, with many lenders scoring record high net income—even in sclerotic Japan, where the 12-year battle fought by the banking sector against negative interest rates would seem to be ending as that easy money regime draws to a close. China was a notable absentee from the party: A fraught property sector shredded sentiment.

Last year, the global banking industry showed greater cost efficiency and improved asset quality. Still, the direction of travel will be determined by economic growth; central bank base rate moves, particularly from the US Federal Reserve; the demand for credit; and the pace of loan delinquency.

As the cost of capital came into focus and banks looked to shrink cost-to-income (CTI) ratios, the industry shed 60,000 jobs globally last year, the highest tally since the crisis. Investment banking fee wallets collapsed as deal-making and listings shriveled.

At the same time, traditional bank lending faced the threat of a thriving private credit market engineered by the nonbank financial sector. Leveraged buyout funds were more likely to be supplied by a large hedge fund than a big bank and at more competitive rates.

Environmental, social, and governance (ESG) issues remained a dominant theme: in Europe as a total belt-and-suspenders operational input thanks to the tightening of the regulatory straitjacket, and in Asia as companies and banks played catch-up in the sustainability game during the start of an ESG-focused regulatory convergence manifesting in the region.

Sustainable finance dominates across the financing spectrum globally, whether in transition format, which dominates in Japan, or the full-on green/impact issuance typical in Europe and the US and burgeoning in Asia-Pacific, excluding Japan.

In Europe, banks had their most profitable year on record, thanks to the NIM effect, resilient asset quality, and low CTI ratios. Bank for International Settlements capital-requirement metrics were in rude health, with more capital returned to bank shareholders last year than at any other time since the crisis.

The banking industry emerged triumphant in 2023, a year that had threatened to be catastrophic. Rapid industry intervention averted the nightmare scenario of a contagion-driven financial crisis fueled by multiple bank failures in the US and Europe.

Last year’s mini-crisis of bank failures was best seen as the result of idiosyncratic management lassitude at the eventually rescued banks. However, the exposed risks inherent in app-based banking and the potential for bank collapse based on rapid mass deposit withdrawals provided a wake-up call for the industry, most pointedly among the rapidly proliferating neobank challengers.

As a result, boosting the current account savings account ratio and improving the “stickiness” of deposits became a central focus for bank CEOs last year.

As in 2022, the net interest margin (NIM) environment was optimal due to tight central bank monetary policy. Last year, a long-absent dynamic entered the fray: positive return on equity, which reemerged after being negative or flat in the 15 years since the global financial crisis of 2007-2009 and averaged 9% last year.

Bank profits in the Asia-Pacific region soared, with many lenders scoring record high net income—even in sclerotic Japan, where the 12-year battle fought by the banking sector against negative interest rates would seem to be ending as that easy money regime draws to a close. China was a notable absentee from the party: A fraught property sector shredded sentiment.

Last year, the global banking industry showed greater cost efficiency and improved asset quality. Still, the direction of travel will be determined by economic growth; central bank base rate moves, particularly from the US Federal Reserve; the demand for credit; and the pace of loan delinquency.

As the cost of capital came into focus and banks looked to shrink cost-to-income (CTI) ratios, the industry shed 60,000 jobs globally last year, the highest tally since the crisis. Investment banking fee wallets collapsed as deal-making and listings shriveled.

At the same time, traditional bank lending faced the threat of a thriving private credit market engineered by the nonbank financial sector. Leveraged buyout funds were more likely to be supplied by a large hedge fund than a big bank and at more competitive rates.

Environmental, social, and governance (ESG) issues remained a dominant theme: in Europe as a total belt-and-suspenders operational input thanks to the tightening of the regulatory straitjacket, and in Asia as companies and banks played catch-up in the sustainability game during the start of an ESG-focused regulatory convergence manifesting in the region.

Sustainable finance dominates across the financing spectrum globally, whether in transition format, which dominates in Japan, or the full-on green/impact issuance typical in Europe and the US and burgeoning in Asia-Pacific, excluding Japan.

In Europe, banks had their most profitable year on record, thanks to the NIM effect, resilient asset quality, and low CTI ratios. Bank for International Settlements capital-requirement metrics were in rude health, with more capital returned to bank shareholders last year than at any other time since the crisis.

In the Asia-Pacific (APAC) region last year—as in 2022—net interest margin (NIM) dynamics were optimal for banks in Southeast Asia, Australasia, Hong Kong and India. Lending rates followed central bank tightening moves, while deposit rates lagged; and across the region, there were some record profits.

In Japan, profits at the country’s five most prominent banking groups leapt 56% to a record ¥2 trillion (about $12.6 billion) in the fiscal second half as lending spreads widened.

By contrast, China’s banking system suffered from weak loan demand as the property crisis weighed on sentiment, and NIMs contracted for a second consecutive year.

Meanwhile, according to an International Data Corp. survey, most banks across APAC increased 2023 tech budgets to boost security, transform data and avoid downtime. Over 70% of banks in APAC expected environmental, social and governance (ESG) initiatives to boost profitability—albeit a challenging measure to acquire.

UOB has focused its growth strategy on ASEAN. Its expansion into the region via the $5 billion Singapore dollars (about $3.7 billion) acquisition of Citigroup’s regional consumer banking business in 2022 bore fruit in 2023, more than doubling its customer base outside Singapore.

The move aligns UOB, which also won the Best Bank in Singapore, with ASEAN’s rise as an economic powerhouse, rapidly transformed via megatrends like supply chain diversification, digitalization and investments in net-zero transitions and a rising middle class.

Last year, UOB fully integrated its acquired Indonesian and Malaysian businesses onto the bank’s platforms while the migration of the Thai and Vietnamese businesses will be completed in the first half of 2024 and 2025, respectively. In 2023, the bank’s financial data metrics were impeccable: a 27% increase in net profit to a record S$6.1 billion; a 2.3% rise in return on equity (ROE) to 14.2%; and gains in tier 1 equity capital and assets of 5% and 4%, respectively.

The Citigroup acquisition bore immediate fruit in the e-payments line, with 25% growth in customers in ASEAN, 26% growth in transaction value to S$129 billion and the capture of 40% market share in Malaysia via the DuitNow e-payment corridor and 60% in Thailand via PromptPay.

China’s banks faced a challenging 2023 due to feeble retail and mortgage loan demand, policy initiatives directing cut-rate lending to strategic sectors, and dwindling NIMs, which fell 22 basis points (bps) over the year, extending 2022’s decline.

Against this inauspicious backdrop, China Construction Bank (CCB) impressed judges with an array of initiatives demonstrating innovative technological thinking and a keen eye on ESG alignment, regional development and inclusivity.

Given the turbulent domestic property market, a particularly savvy initiative involved closed-loop services aimed at improving China’s rental-housing environment. CCB invested 4.9 billion renminbi (about $676 million) under its Housing Rental Fund; and via the CCB Home long-term rental program, the bank’s corporate lending to the rental sector exceeded 300 billion renminbi.

Digital capability led to an upgrade of the CCB Huidongni app, which provides inclusive loans, boosting this portfolio of offerings by 22% to 2.9 trillion renminbi. Rural revitalization was facilitated via the Yunongtong app, which provides basic financial services to farmers.

Meanwhile, HSBC had a banner year in Hong Kong, raking in $24.6 billion after-tax profit versus $8.3 billion in 2022. This was primarily based on revenue growth, which registered a heady 30% rise, allowing the bank to distribute its highest full-year dividend since 2008.

In the culmination of a four-year cost-to-achieve program, the bank eliminated recurrent resturcturing cost and reduced operating expenses by 2%.

Rising external interest rates, a weak economic recovery and risk management challenges put neighboring Macau’s banking environment under pressure. Nonperforming loans (NPLs) surged from 0.26% before the pandemic to 3%—a complex backdrop that demanded transformative action from ICBC (Macau).

In response, the bank focused on long-term sustainable development, transformed its operations, compressed its asset scale, optimized its liability structure and boosted noncredit profit lines.

Provisioning costs hit profits, but ICBC’s strategy of “basing on Macau, integrating into the Greater Bay Area, expanding in Portuguese-speaking countries and extending to the countries along the Belt and Road route” remained intact.

Taiwan’s E.Sun bank stunned last year with profits of $21.7 billion Taiwan new dollars (about $665 million), for a 38.1% gain, all the more impressive for being achieved by an 11.6% rise in fee income (to NT$21.5 billion), which broke the bank’s all-time quarterly record in the final quarter of 2023, when it booked a hefty NT$5.8 billion in fees.

The bank’s offshore business expansion also saw a massive return, as overseas profit surged 102.9% and contributed 35.8% of E.Sun’s overall profit.

Japan’s banks benefited from rising NIMs in dollar loans last year. At the same time, margins improved on longer-term yen loans thanks to the Bank of Japan (BOJ) easing caps on the 10-year Japanese government bond in its yield curve control program. The NIM at Japan’s three largest banks hit 56 bps, the highest since the BOJ started its negative interest rate regime in 2012.

Banking colossus MUFG Bank reaped ¥80 billion to its profit and loss statement from a bumper year at its domestic affiliates, including Morgan Stanley securities operations, where combined profits hit ¥381 billion in fiscal 2023. The company also benefited from a 33 bps increase on overseas lending spreads, principally in US dollar funding. Net operating profits across the group in the year to September rose 16% to ¥1.8 trillion.

MUFG demonstrated a solid commitment to shareholders last year. The group’s market capitalization in 2023 was at a 17-year high, valuing the enterprise at around the same level in dollar terms as Goldman Sachs.

Meanwhile, South Korea’s Hana Bank delivered a 34% gain in net income in fiscal 2023, with a notable 15.4% increase in fee income. In addition, it benefited from improved net lending margins thanks to the Bank of Korea’s base rate-tightening campaign.

Hana has led the way in Korean banking’s funding alternatives to the deposit base, with frequent issuance in the international debt capital markets. Last year, it innovated by visiting the euro market via a €600 million (about $642 million) covered social bond, building on US dollar issuance over the previous two years in a sustainability-linked format. This underscored Hana’s commitment to ESG alignment, the bank having joined the Equator Principles in 2021 and the Net-Zero Banking Alliance in 2022.

The post-Covid recovery went gangbusters in the Australian banking sector last year. KPMG Australia reported that the “Big Four” banks generated 32.5 billion Australian dollars (about $21.2 billion) in profit, for a 12.4% year-on-year (YoY) gain.

The country’s largest lender, Commonwealth Bank of Australia (CBA), led the pack with the biggest profit—a record AU$10.2 billion—besting the other three significant lenders (NAB, ANZ and Westpac) by around AU$ 3 billion each. NIM rose in the first half by 23 bps to 2.1%, and earnings growth‚ unsurprisingly, was driven by a 19% increase in net interest income. Volume growth was recorded across CBA’s product suite including home loans—which it dominates, providing 25% of retail mortgages in the country—and business loans.

CBA struck a cautious tone in its 2023 annual report, noting a rise in loan delinquencies. Still, shareholders had reason to smile: In August, it announced an AU$1 billion share buyback and paid a final dividend of AU$2.40 per share for a record annual AU$4.50 payout.

Meanwhile, ANZ New Zealand had a bumper year, but also stuck a cautious tone.

Despite going from the Covid fiscal stimulus tailwind to a series of rapid interest rate increases from 2022 to 2023, the bank achieved 2.3 billion New Zealand dollars (about $1.4 billion) in cash profit for fiscal 2023—a 10% YoY gain. Revenue rose 10% and home lending by 3%; but provisioning against sour loans increased, and profits fell 22% in the final quarter as NPLs rose above NZ$1 billion.

Demand for consumer loans propelled Indian banks’ loan portfolio growth into double digits last year. The State Bank of India (SBI), the country’s largest asset lender, reduced its recent focus on the retail segment for baseline expansion and turned its attention to corporates.

Overall loan growth was 15% last year; but the days of 30% to 33% annual unsecured retail loan growth ended, being crimped to 18% while corporate lending filled the gap.

The bank has an auspicious ratio of current account savings accounts (CASA) and focused last year on the cross-selling product opportunity afforded by its 22,400-branch network. SBI continued to reduce NPLs, reducing its gross nonperforming assets ratio by 72 bps, to 2.42%

Pakistan’s Habib Bank, the country’s oldest commercial bank, scored its highest-ever profit in 2023, pulling in 57.8 billion Pakistani rupees (approximately $208 million), a 68% surge.

Assets and deposits both hit record growth—each up by 19%—and all of the bank’s product offerings, including consumer loans, agriculture lending and microfinance, hit new benchmark highs. The lending margin backdrop was turbocharged by rising central bank policy rates, surging 159 bps. In contrast, fee income rose 34%, mainly on the back of HBL’s cards business, which dominates retail consumer credit in the country.

According to its website, the vision of the Commercial Bank of Ceylon (CBC) is “to be the most technologically advanced, innovative and customer-friendly financial services organization in Sri Lanka.” This might have proved challenging during the past few years of economic turmoil, but CBC is on its way.

In 2023, its tech-driven new product offerings impressed, particularly the Commercial Bank LEAP GlobalLinker, a pioneering scheme to create a digital business ecosystem in the country, aimed at small and midsize enterprises (SMEs). At the same time, CBC grabbed the most market share for deposits and loans in Sri Lanka and grew its ESG footprint with schemes such as collaboration with the Green Building Council, which will promote sustainable construction in the country.

Nepal’s Global IME Bank (GIB) serves 4.6 million domestic customers and focuses 55% of lending on the retail and SME segments. GIB has interests in hydropower, manufacturing, textiles, services, aviation, exports, trading and microfinance. It was the first handling bank unit of the Central Renewable Energy Fund. Its ESG credentials were further burnished by establishing a disaster recovery system in natural disaster prone western region of Nepal, about 125 miles west of Kathmandu.

Standard Chartered Bangladesh (SCB) has been serving the country for 119 years. It has facilitated investments in power, energy, transportation and urban development, with a keen eye on lending to the SME sector, It is the country’s only universal international bank.

An eye-opening innovation unveiled last year was the first-ever end-to-end digital cross-border letter of credit, which was utilized by Heidelberg Cement Bangladesh and was made possible by an amendment to Bangladesh’s Import Policy Order. Moreover, SCB arranged the first private sector “recourse” financing to help reduce greenhouse gas emissions in the country’s steel industry via solar power generation, air pollutant management systems and water treatment.

Malaysia’s Maybank is galvanized around its M25+ action plan, which aims at revenue diversification and operational efficiency while keeping a sharp eye on meeting sustainable goals. The bank operates around its pioneering Group Transition Finance Framework. In 2023 it received the highest rating in the Carbon Disclosure Project among local peers, scoring a B versus the Asia regional C rating.

Maybank’s 60 sen (about $0.13) dividend was the highest payout since the pandemic. Meanwhile, its ROE rose from 9.6% to 10.8%, and net profit grew 17.5% to 9.35 billion ringgit (about $2 billion).

In neighboring Brunei Darussalam, Baiduri Bank reported a blowout of 15.8% ROE, a 24% surge from the previous year. The operational efficiency required to achieve this stunning metric was made plain in the bank’s supertight 38.2 cost-to-income ratio, which squeezed in by 23%. Total assets grew 11.5%, and net profit surged 37%.

The bank trod new paths, including its presence in overseas syndicated loan groups and via innovative strategies from its treasury team in asset and liability management, focused on overseas financial markets, especially its neighbor Singapore.

Bangkok Bank (BBL) booked a handy 42% rise in profits in 2023 for 8% ROE, an impressive result given the bank’s relatively cautious lending stance: Its loan-to-deposit ratio was 84%, versus around 107% for the Thai banking system.

Thailand’s largest commercial bank, BBL has led, managed and participated in public debt issuance across the entire spectrum, from plain vanilla to structured and ESG-compliant debt.

The bank also rolled out game-changing products during 2023, including PromptBiz, an e-payments corridor that is part of the Bank of Thailand’s national digital service, and a digital-lending pilot project for microenterprises that utilizes digital data and end-to-end digital approval.

Higher NIMs and improved asset quality—which boosted non-interest income—allowed the Philippines’ Metropolitan Bank and Trust Co (Metrobank) to book a 29% gain in attributable net profit last year, with earnings surging 39% in the third quarter.

Metrobank kept costs low last year, reducing its cost-to-income ratio by more than 3% to 51.5%. Its trading and foreign exchange departments scored a 45.5% gain, booking 3.6 billion pesos (about $62.4 million) in trading profits.

Indonesia’s Bank Mandiri focused on corporate credit growth last year, increasing its loan portfolio in the segment by 18.3% to 490 billion Indonesian rupiah (about $30.2 million). The micro, small and midsize enterprise segments grew by 14% and 10.4%, respectively, and overall asset quality at the bank improved. NPLs fell by a chunky 86 bps to just 1.02% and are covered by 384%.

The bank also recorded the highest profit in its 25-year history, 55 trillion rupiah ($3.5 billion), for a 33.7% gain over 2022.

Vietnam’s Techcombank acquired 2.6 million new customers last year— double 2022’s customer growth. In the process, it boosted deposits by 26.9% and total credit assets, including loans and credit card assets, by 19.2%. The healthy deposit dynamic at the start of the year continued into the final quarter, with CASA rising to 40%. Vietnam’s cutthroat banking market softened Techcom’s asset yields with competitive loan pricing. However, after contracting in the first three quarters, its NIM expanded by 11.4% in the third quarter, which allowed pretax profits to rise 22% in 2023.

Advanced Bank of Asia (ABA), Cambodia’s largest commercial lender, wholly owned by the National Bank of Canada, increased profit by 5.4% in 2023, pulling in $276.5 million. Wholesale and retail trade loans dominated ABA’s loan portfolio, with the rest lent to the services sector, real estate, construction and manufacturing. Total asset value grew 27% over the year, and the bank continued to restructure loans that had become nonperforming during the pandemic.

Myanmar’s UAB Bank scored an eye-popping 17% ROE in 2023 and managed to subdue NPLs to 6%. UAB has become a model within the “S” of ESG, demonstrating corporate empathy within a country still reeling from the effects of the 2021 military coup. It has organized campaigns to donate rice, funded orphanages and monasteries, provided scholarships for the underprivileged, sponsored sporting and artistic talent and organized excursions for the elderly, all under the slogan “No one is left out.”

Afghanistan International Bank (AIB), one of the country’s largest commercial banks, enjoys its unique status as the country’s only US dollar clearer—with the ability to transfer internationally without country restriction—and as a conduit to multilateral lenders and nongovernment organizations. After-tax profit in 2023 was 1.3 billion Afghan afghanis (about $18 million), a 29% YoY gain.

Mongolia’s Khan Bank outpaced the competition in 2023. Its 424 billion tugrik (about $125 million) profit exceeded the combined earnings of the country’s four other large banks. This  was an impressive result given the expiration of the no-interest clause on demand deposits and current accounts that had been introduced due to the Covid-19 pandemic.

Roughly 1.7 million of Mongolia’s population of 3.5 million people use the digital platform from Khan Bank, and AI automation has helped streamline 10 processes across the application. This includes a digital signature feature that massively reduces paper usage and helps the bank become more eco-friendly.

Kazakhstan’s ForteBank—the country’s fifth-largest lender in terms of assets—enjoyed a one-notch long-term-issuer upgrade from Fitch Ratings in August to BB. Fitch cited the bank’s “intrinsic credit strength” and the reduction of its NPLs from 13% at the end of 2021 to 9% at the end of the first half of 2023.

Pasha Bank, Azerbaijan’s largest private bank by total equity, booked an extraordinary 510% profit gain last year via its diversified operational model, which includes investment banking, trade finance and asset management for businesses ranging from SMEs to the largest corporations. In 2023, the bank leveraged its 8.9 billion manat (about $5.2 billion) in consolidated assets to post industry-beating profits.

Tenge Bank, a subsidiary of preeminent Central Asian lender Halyk Bank, has made rapid progress since its start in 2019. It covers 90% of Uzbekistan country’s population via 17 branches and through its mobile app, Tenge24, which added online account opening and virtual card issuance in 2023.

Meanwhile, Halyk Bank Kyrgyzstan, a universal bank, provides financial services to large corporations, SMEs and retail customers. Since opening its doors, it has built up correspondent relationships with large banks in Germany, Russia, South Korea and Kazakhstan and serves the population via 19 branches. Kazakh parent Halyk Bank sold the bank last year to a consortium of buyers led by Visor International, an investment group with interests in Central Asia.  

The future path of ESG though, may well depend on choices made by the rest of the world, and particularly Asia. Why Asia? Although its per capita emissions are below those of the US and EU, the populous Asia-Pacific region (APAC) is currently a massive carbon producer. Asia is also rapidly becoming a pivotal player in the search for solutions to the climate crisis, and has the resources to achieve it.

“China and India produce one third of the world’s carbon emissions; the former makes over 60% of the solar panel supply and owns the bulk of the rare earth minerals required to manufacture EV batteries,” notes Drew Bernstein, co-chairman of accounting firm Marcum Asia. “Moreover, the region feels the effects of global heating more than anywhere else.”

Africa is certainly pinched between its huge burgeoning energy needs and massive financing gap. Latin America, grounded in agriculture, is investing in sustainable transition, but is a relatively small part of the world economy. By contrast, APAC is the behemoth, anchored by the mature economies of Japan and Australia and primed for future turbocharged growth by the Association of Southeast Asian Nations (ASEAN), which is forecast to be the world’s fourth-richest economic bloc by 2030.

Although its per capita emissions are below the US and EU, populous Asia is currently a massive carbon emitter, generating 17.2 billion metric tons of carbon dioxide via energy production in 2021 (51.2% of the global total), versus 4.5 billion from the US (13.6%) and 3.7 billion in Europe (11.1%), according to the International Energy Agency.

Asia’s wide range of economic development—from frontier markets such as Vietnam to the highly developed economies of Singapore and Japan—means that while the region’s energy and growth needs are significant, it also commands the wealth needed to finance change. Furthermore, cultural expectations in most Asian countries lean toward a strong role for governments in corporate affairs—and for stakeholder-capitalism approaches that seek long-term stability through balance among the needs of employers, employees, customers, citizens and even nature.

“We’re keenly aware of the growing importance that regulators, customers and stakeholders—including banks—place on ESG, climate change, and carbon emissions, in both managing risks and identifying opportunities,” says Gopul Shah, director of corporate treasury and structured trade finance at Singapore-based Golden Agri-Resources, (GAR) a regional agricultural giant specializing in palm oil. “There’s now a clear expectation for companies like GAR to disclose, comply, or explain what we’re doing in critical areas such as sustainable sourcing practices, investments in traceability or mapping and mitigating our carbon emissions.”

Together, these factors are making themselves felt on three fronts: a wave of new and more aggressive environmental reporting regimes across the region, a lively fintech business facilitating reporting connected to the new regulations, and a growing and innovative market in sustainable finance.

Thus far, the approach that Asian governments and corporates are taking to the business of sustainability resembles the European model more than the American. Consider Singapore and Hong Kong. Five years ago, lax environmental regulation and disclosure were among the attractions of these economies. Now, ESG regulation in both is tightening to meet international guidelines. Yet, the two jurisdictions continue to attract corporate interest as bases of operation and corporate treasuries, both from multinationals outside the region and from within APAC.

In fact, these two are effectively leading the ESG regulatory wave that is beginning to sweep the region. In North Asia, Japan is slated to adopt new sustainability disclosure rules by March 2025 consistent with criteria set by the International Sustainability Standards Board (ISSB). China’s three main stock exchanges—Beijing, Shanghai, and Shenzhen—recently unveiled new sustainability reporting guidelines that will require hundreds of large and dual-listed companies to disclose ESG-related information, including energy use, climate change, ecosystem and biodiversity protection, and supply chain security, starting in 2026.

“Mandatory reporting is expected to significantly impact Chinese companies, pushing them to prioritize and transparently report on their sustainability efforts,” says Polly Milne, project director at the Sustainability Group consultancy, based in London. This amounts to “a significant step towards increased corporate transparency and environmental responsibility that will align China with ESG disclosure rules in other countries, including the UK, Australia and Singapore.”

To be sure, not every jurisdiction is proceeding at the same pace. South Korea’s Financial Services Commission announced late last year that it was postponing mandatory ESG disclosure rules for listed companies until 2026 or later, citing delays in the US and other countries and requests from the Korean business community for more time. But new rules are coming nonetheless, initially for companies listed on the Korea Composite Stock Index that have more than 2 trillion South Korean won (about $1.5 billion) in assets.

But the US, where legislation under consideration excludes Scope 3 (supply chain) emissions, is looking more like a global outlier. “The international standard for ESG reporting is the ISSB, which includes Scope 3 emissions reporting as mandatory,” explains Benjamin Soh, co-founder and CEO of regional ESG-focused fintech Stacs. “In Asia, regulatory reporting will be adopted according to this standard for all listed companies.”

In measuring progress and meeting such goals, Asia benefits from a leading edge in technology—environmental as well as financial technology. Hong Kong-based Intensel, for example, uses satellite imagery and big climate and asset databases to provide real-time portfolio analysis.

Another entrant is ESGpedia, a digital platform developed by Stacs, a Singapore-based data and technology company that aims to bolster several green and sustainable-finance efforts, including ASEAN’s Single Access Point for ESG Data, a digital one-stop shop for corporate sustainability information; and the Monetary Authority of Singapore’s Greenprint ESG Registry, a blockchain-based network that is part of a wider effort “to harness technology and create a data-centric ecosystem to support the financial sector’s sustainability agenda.” As sustainability-focused regulations roll out across Asia, tools created by companies like Intensel and Stacs are expected to play a key role facilitating compliance.

As this suggests, APAC is also expected to drive the next stage of growth in sustainable finance, which has surged from less than $100 billion in 2015 to $4.6 trillion worldwide in 2022, according to Precedence Research, which predicts 20% annual growth for the market through 2032, when it could reach $29.1 trillion. “Much of that growth will come in [APAC] as it catches up with Europe and North America and, in some areas, overtakes them,” Societe Generale predicted in a January research note.

Investment bankers and institutional investors in the region expect the new environmental reporting regimes to reinforce North Asia’s existing preeminence in green and impact bond issuance and spawn a new boom in sustainable issuance in East and Southeast Asia. For Asia’s CFOs, challenges and opportunities abound: The former involve meeting a rising level of government regulation aligned with ever-converging regional green taxonomies; the latter involve an increasingly deep and sophisticated sustainable loan, bond and derivatives market.

Cross-border issuance within Asia gives corporate treasurers the opportunity to diversify their investor base while tapping a growing sustainable-funding market. In March, CapitaLand Investment (CLI), a Singapore real estate firm, issued its inaugural sustainability-linked Panda bond, with a three-year tenor at 3.5% per annum, raising one billion renminbi (about $138.7 million), the first such from a company based in the city-state. The deal was 1.65 times oversubscribed, indicating a strong underlying demand for sustainability-linked debt from Chinese investors.

Meeting key performance indicators (KPIs) linked to the interest rate on a loan or bond can deliver substantial bottomline benefits, the discount depending on the market, the bank and the corporate making the deal. “In Asia’s emerging markets, the discount could be as high as 25 basis points per annum,” says Stacs CEO Soh. “You’re saving a lot of money down the road.”

Another advantage of sustainability-linked issuance is that funds can be used for refinancing purposes. In the CLI deal, coupon payments are linked to a reduction of CLI’s energy consumption intensity at its properties in China, targeting a 6% decline.

These benefits are key for RGE, a Singapore-based, privately held multinational with global assets valued at more than $30 billion. RGE has business segments in palm oil, pulp and paper, viscose fiber, and energy provision. “To drive real sustainability impact and ensure that all our businesses have skin in the game,” says Patrick Tan, RGE’s head of banking, “we have committed 100% of our financing to sustainability-linked loans (SLLs).” Proceeds will support the growth of the company’s core businesses as well as its expansion into new initiatives such as sustainable aviation fuel. “SLLs are ideal for us as they are aligned to our DNA as well as our businesses’ sustainability goals,” Tan adds. “In 2023, we issued around $1.14 billion in SLLs and we expect to seek a similar or bigger funding amount this year to support our growth.”

From an issuer’s point of view, sustainability-linked bonds (SLBs) carry another attraction: callability. According to an International Finance Corporation February 2023 report, 65% of the outstanding global corporate SLB market is likely to be called, versus 23% of green bonds—with 69% tied to reduction of greenhouse gas emissions, followed by increased use of renewable energy—and step-ups for missing ESG-linked KPIs are relatively low, at a 25 basis point average.

“Issuers recognize the need to establish green credentials or risk being locked out of capital markets. However, not every issuer has eligible green assets that can be tagged to use-of-proceed instruments like green bonds,” says Clifford Lee, global head of Investment Banking at DBS. “SLBs play a critical role in bridging that gap by supporting companies as they undergo the green transition.”

The lack of standards for ESG factors in business remains a point of contention. GAR illustrates why: The company has been an early adopter of standards set in Singapore and has started implementing international Taskforce on Climate-related Financial Disclosures (TCFD) recommendations and reporting Scope 3, land use and forestry emissions. Do those efforts earn it high marks? Depends whom you ask. A- from Refinitiv, BB from MSCI and High Risk from Sustainalytics.

Elsa Pau, founder and CEO of Hong Kong-based BlueOnion, a fintech company that promotes responsible investing, argues that the diversity of views is healthy: “Different ESG ratings agencies look at companies from fundamentally different perspectives.”

Others, like Karl Schmedders, professor of finance at IMD business school in Lausanne, complain that inconsistency masks the compromises in the business model: “Why do the agencies that provide those ratings get involved? They in essence want to make money, and the enterprise enables greenwashing.”

Here, banks may be able to lend help to corporate clients as arbiters and assessors. “For commercial banks, ESG ratings serve more as a point of reference,” says RGE’s Tan. “For corporates that are transitioning to a greener future, banks may be better equipped than a standard set of ratings to dissect and identify factors that move the needle.”

As DBS’ Lee notes, ESG ratings can be useful in demonstrating a company’s adherence to ESG principles and exposure to ESG risks. However, as ESG ratings remain in an evolving stage of development, many companies continue to rely on their respective ESG financing frameworks to showcase ESG plans to investors.

“While banks expect sufficient ESG transparency from their clients to ensure they can address climate change or transition risks and opportunities, this is still one among many factors that lenders consider,” says GAR’s Shah. “Corporate credit rating, business risk and management profiling, cash flow, industry risk, governance and relationship history continue to remain primary considerations for lenders.”

Those figures have burnished the reputation of Prime Minister Sheikh Hasina, daughter of the nation’s founder and in power since 2009, who has championed the country’s textile industry as a powerful growth engine.

All has not been smooth sailing for the net oil-importing nation. Last year, rising fossil fuel prices increased inflation, shaving 1% off 7% forecast growth and creating a balance of payments crisis that led to intervention by the International Monetary Fund (IMF). But the country’s long-term growth trajectory remains intact.

When the country experienced an unprecedented reversal of its financial accounts last year, leading to a deterioration in the balance of payments and consequent pressure on Bangladesh Central Bank’s foreign exchange reserves and the taka, the bank, under program guidance from the IMF, tightened monetary policy, allowed greater exchange rate flexibility. 

“Due to active intervention by the central bank, there has been some convergence of formal and informal exchange rates for the taka,” says Salim Afzal Shawon, head of research at BRAC EPL, a Dhaka stock brokerage. “Whereas we have seen different formal and informal rates with as high as a 14%-plus gap in between, it has narrowed a bit recently, with some sign of steadiness, which should help improve onshore dollar liquidity.”

A wild card is Bangladesh’s high-risk exposure to climate change; the 2021 Global Climate Risk Index Report ranked it seventh among countries most affected by climate change between 2000 and 2019. That vulnerability may be a developmental capital blessing in disguise.

In December, the government established its Bangladesh Climate and Development Platform (BCDP), a collaborative initiative and the first of its kind in Asia, spearheaded by the Asian Development Bank and World Bank, aimed at mitigating and adapting to the effects of climate change and involving the participation of multilateral development banks and other bilateral partners—12 in total—including the Green Climate Fund.

The BCDP will “generate a robust pipeline of climate projects, integrated with a financing strategy” and the initiative aims to attract private capital via risk mitigation and direct funding, according to an IMF prepared statement. The initiative includes a Project Preparation Facility, which aims to coordinate development partners and support scalability in order to attract private investment.

In 2022, the top 10 largest private banks in the Asia-Pacific region (APAC) saw their assets under management (AUM) decline by $209 billion (11.7%) amid a turbulent year for global capital markets.

However, according to estimates from Accenture, AUM has rebounded this year as private banks compete for a share of Asia’s estimated $216.6 trillion of investor wealth, with $20.9 trillion held by ultrahigh net worth investors.

Advisory capability and the ability to navigate volatile offshore and onshore markets with asset selection are more crucial than ever. APAC private banks aim to more than double AUM and grow revenue by more than 60% by 2025.

APAC private banks are increasingly relying on “phygital” (hybrid physical and digital) relationship managers (RMs), who use artificial intelligence (AI) to optimize advisory services, boost revenue, and reduce cost-to-income ratios. This approach allows RMs to serve more clients more efficiently than standard physical models.

DBS Private Bank excels in Singapore’s shifting financial landscape, with a substantial 76% of recent client growth coming from international clients across the globe. The bank’s exceptional metrics include a 20% rise in total income for 2022, driven by record net new money inflows and one of the industry’s lowest cost-to-income ratios, at just 46%.

The bank actively participates in Singapore’s thriving single-family office (SFO) boom, attracting many SFOs established in the city-state. Additionally, DBS has introduced a multifamily-office structuring proposition that leverages Singapore’s variable capital company regime.

Clients monitor portfolios and receive AI-powered insights through the DBS digibank – wealth app, with an impressive 90% of clients using it to trade 24/7. Contrary to regional trends, the bank also expanded its RM pool by 5% in 2022.

DBS’ unique “one-bank” proposition harnesses its commercial and investment banking capabilities, offering business owners access to Singapore’s economic success story through local expertise and connections.

The private bank’s phygital approach combines RM expertise with data analytics, AI, and machine learning to redefine the client experience. RMs receive AI-guided “nudges” for client engagement, leading to increased adoption of wealth planning solutions. These nudges are delivered through the DBS digibank – wealth app, with 90% of clients actively using it to monitor portfolios and trade.

Like its APAC counterparts, Westpac Private Bank has witnessed growing demand for investment products aligned with environmental, social, and governance (ESG) concerns, especially from its millennial client base. The bank addresses this demand with a thematic approach, offering tailored investment opportunities typically reserved for institutions that cater to private bank clients.

For instance, the Global Energy Transition theme focuses on wind and solar energy and battery assets, emphasizing capital preservation and consistent cash flow generation.

In sustainable investing, Westpac Private Bank stands out as the first major Australian retail broker to introduce ESG risk ratings for individual companies, a collaborative effort between Westpac’s Private Wealth product development team and Sustainalytics. These ratings enable clients to assess the economic impact of ESG factors on companies.

Tailoring offerings, services, and performance to cater to a diverse clientele ranging from those with established fortunes to emerging tech magnates and the next generation demands a blend of expertise and vision. It also requires an ability to see past headwinds and help clients plot a long-term course.

This year has been a singular year for private banking, as providers watched the almost simultaneous fall of one of the largest private wealth managers in history, Credit Suisse; and one of the most innovative, Silicon Valley Bank (SVB). Despite which, the industry has shown resilience as historical powerhouses such as J.P. Morgan, UBS, Deutsche Bank, Citi, and Bank of America stepped up to prevent a financial crisis in the wake of the collapse of SVB, Signature Bank, and First Republic Bank—later reaping the rewards, increasing their clientele, staffing, and structural capacities.

Moreover, J.P. Morgan Private Bank kept improving its offerings and global presence. This year, it opened a new US Family Office Practice and added to its teams in Asia and Latin America while making changes in upper management in both regions.          —TM

Westpac Private Bank acts on the belief that commitment to diversity begins at home. The Australian market leader has set specific targets for gender representation within its leadership ranks, with the aim of filling 50% of leadership positions and at least 40% of board seats with women.

In March, the bank introduced a set of initiatives to support female entrepreneurs as part of its 500 million Australian dollar (about $318 million) commitment to women in business. The initiatives include offering startup loans of up to AU$50,000 with a three-year tenor and providing scale-up loans of up to AU$1 million to assist existing businesses in their growth, also with a three-year tenor.

“Boosting women’s entrepreneurship in Australia is important to the economy,” said Chris de Bruin, who has since stepped down as group chief executive of consumer and business banking, in commenting on the initiatives. “The longstanding gender pay gap represents a missed opportunity for innovation, social and economic value creation, and job creation.”          —Jonathan Rogers

DBS initiated its digitalization journey in 2014, with the aim of developing artificial intelligence (AI) and machine learning models and utilizing cloud and open-source technologies to facilitate a transformation into a fully digital bank.

Since then, the Singapore-based bank has achieved several breakthroughs in the field, reducing costs by 30 million Singapore dollars (about $22 million) while increasing revenue by SG$180 million.

Among the most important developments are an internal self-service AI platform, an AI protocol, and a knowledge repository, enabling rapid AI deployment at scale. DBS’ integration of its relationship management systems with AI, referred to as the “phygital” (hybrid physical and digital) dynamic, has also played an important role in delivering optimal client service to its private banking clients.    —JR

Having been the top-rated bank on the Dow Jones Sustainability Europe Index three years in a row, BBVA is an undisputed global leader in the field. The Spanish giant’s success rests on two pillars: alignment of all loans and investments with the Paris Agreement and a comprehensive range of sustainable products and services for the bank’s clients.

BBVA offers a family of sustainable mutual funds whose managers are committed to impact investing. It also constantly monitors the environmental, social, and governance (ESG) credentials of third-party funds through its proprietary Quality Funds platform. Sustainability-risk information goes digitally to private banking clients in compliance with the EU’s Sustainable Finance Disclosure Regulation. Finally, to ensure that its clients have confidence in its commitment, BBVA now requires all of its private bankers to hold an external sustainability certificate. —Jonathan Gregson

BTG has built an investment-solution ecosystem that aims to meet all of its wealth management clients’ medium- and long-term goals with an integrated, one-stop-shop approach. The platform leverages cutting-edge technology and up-to-date analytical information, enabling BTG’s team to upgrade clients’ financial experience into a user-friendly, easy-to-navigate environment.

One of the main features is constant dialogue with clients over their developing needs. For this, BTG focuses on three vital aspects: recruiting and nurturing top professionals for the front, back, and middle office and product areas; deepening its understanding of clients’ financial needs and objectives; and staying ahead by anticipating global and local market opportunities, especially during challenging periods.            —Estela Silva

Reliability, investment performance, and tailor-made solutions are requisites for high net worth (HNW) and ultrahigh net worth individuals (UHNWI) shopping for a private bank. Banque Richelieu Monaco, which takes home our award this year as Best Boutique Private Bank in the World, checks all of these boxes, along with above-average staffing and growth of assets under management (AUM).

With nearly 40% of its AUM base landing in the UHNWI category, Richelieu maintained its focus on offering rapid, tailor-made decision-making, enabling clients to navigate wealth management seamlessly. It was rewarded with stellar growth this year, as AUM grew 17% and net profits an impressive 47%.

Richelieu’s strategic focus encompasses markets including Monaco and other European countries, which account for 60% of AUM; while Africa, Asia, the Middle East, and the US account for the rest. Nonetheless, it has kept on building foreign partnerships, notably with Banque Richelieu GCC in Cyprus and Abu Dhabi. A recent collaboration with banking and wealth management software developer ERI has enabled the bank to improve efficiency and upgrade its technology offerings, improving client service.  —TM

Hana Private Bank has made a name for itself as an innovator by offering new digital assets, accessible and manageable on Hana’s 1Q Bank app, to its HNW clients. The new products include security token offerings and fractionalized stakes in blue-chip artworks by artists such as Picasso, Warhol, Kusama, and Basquiat using nonfungible tokenization backed by blockchain technology.

The South Korean bank established Hana Art Bank in July 2023 in alliance with an alternative investment platform company to appeal to “microcollectors” via fractional ownership.

Hana teamed with KPMG in February to launch two more new offerings: succession planning services, including valuation and M&A advisory; and a private community linking younger HNWIs with CEOs for networking and business-opportunity creation.          —JR

J. Safra Sarasin sees sustainability as the most critical aspect of its approach to socially responsible investment. The Swiss private bank has closely integrated two key sets of standards: the Paris Agreement on climate change and the UN’s Sustainable Development Goals. Both are embedded in Safra’s corporate strategy and core investment offering.

Safra has been ahead of the curve since it launched its first sustainable investment mandate in 1989, and it has consistently directed resources to companies that embrace energy efficiency and decarbonization. A founding signatory of the UN Principles for Responsible Investing in 2006, Safra launched its own proprietary Sustainability Matrix more than 20 years ago and today requires that all of its mandates be sustainable. —JG

As the private banking world buckles up to help manage one of the most significant generational wealth transfers in history over the next couple of decades, BTG Pactual Wealth Management is working to stay ahead of the pack. The bank’s Future Leaders program is dedicated to preparing heirs for roles in shaping future legacies through comprehensive education in legal, economic, and tax aspects of estate planning.

Recognizing the pivotal role women will play in guiding the next generation of wealth management, BTG also offers Financial Journey–Women Investors, a financial education and leadership initiative aimed at helping participants make informed financial decisions and explore diverse investment strategies.     —ES

Managing approximately $1.3 trillion across the globe, Scotiabank has evolved into a powerful worldwide force. Since 2018, the Canadian bank has grown and diversified on the back of a series of multibillion-dollar acquisitions in areas including asset management and foreign exchange hedging.

Intergenerational wealth transfer and transition services are central to Scotia Wealth Management’s Enriched Thinking offerings. Scotiabank backs these up with the stability of its Canadian operations and its expertise across the globe. This helps entrepreneurs facing uncertainty in their home country to invest in more-secure markets.

A tailored fee structure helps Scotiabank to create a more customized practice with each of its business clients, backed by a five-year program that identifies customer needs and delivers solutions in one plan. Thanks to this approach, Scotiabank’s commercial banking business has seen sixfold volume growth in referrals over the past six years, to $13 billion.       —Nic Wirtz

Combining a deep knowledge of local markets with best-in-class global capabilities, Fifth Third Private Bank won high marks this year for service to entrepreneurs amid a volatile global economy. Its team of senior strategists, CPAs, and attorneys combined to produce a financial advisory offering that earned Fifth Third outstanding numbers in its customer satisfaction survey.

The bank continued to improve its tailored offerings to business owners. Last year, it partnered with a group of universities across the US on an exclusive survey aimed at understanding the strategies that middle-market business owners use in planning and executing transitions. The research yielded insights into the hurdles facing wealth managers in this market segment, particularly in the post-pandemic landscape, prompting further improvements in Fifth Third’s offerings.          —TM

With dedicated teams spread across Western Europe, Switzerland and the US, Santander Private Bank has expanded its client base of family offices by 16% over the past year to 3,090 families globally.

Recognizing the unique needs of UHNW clients, the Spanish-based bank recently introduced a team focused on offering a comprehensive suite of strategic investment banking solutions for family offices. Santander’s flagship Private Real Estate Advisory (SPREA) program helps UHNW clients identify promising investment opportunities and efficiently execute transactions. SPREA has dedicated teams in key regions, including Spain, the US, Portugal, Mexico and Brazil.

This strategic positioning allows the bank to tap into cross-border investment flows between the continents on which it operates. In 2022 alone, SPREA enjoyed 20% YoY growth in net revenue while overseeing €321 million (about $343 million) in total transaction value, underscoring its success in serving UHNW clients’ real estate investment needs.  —ES

Emirates NBD is becoming more and more of a global bank. The Dubai-based bank has developed a strong network in emerging markets from Africa to Asia, with a presence in Egypt, Turkey, Bahrain, Russia, Singapore, Indonesia and China.

In 2022, the bank opened two additional branches in India to complement its Mumbai offices. It also expanded its network in Saudi Arabia, the Middle East’s biggest market, with a booking center and 13 branches.

In these countries, Emirates NBD offers first-class private banking services but is also leveraging its ability to act as a bridge institution facilitating wealth transfers and providing investment solutions to large expatriate communities from the Global South.

Adapting to youth and new technologies, Emirates NBD also operates Liv, a digital bank, and just launched ENBD X, a new mobile app with an embedded digital wealth platform that allows clients to access over 11,000 global and regional equities with just a click.     —Chloe Domat

The initial success of this strategy is reflected in the bank’s excellent financial performance, which underscored the resilience of its balance sheet. Notably, the Federal Reserve’s annual stress test reaffirmed PNC’s financial strength and stability across economic cycles even while other banks faced difficulties.

As its rivals stuck to the basics, PNC focused on environmental responsibility and economic empowerment through private bank inclusion, committing more than $1 billion to bolstering African American–owned businesses in underprivileged communities and comprehensive sustainable investment offerings.     —TM

The Netherlands’ leading bank, which has long provided bespoke private banking-style services to its wealthier clients, recently lowered its entry threshold to €500,000. Given that this is by far the fastest-growing segment of the private banking market, the move has yielded healthy growth in a challenging year.

ING’s new cutoff point is part of a broader strategy of guiding existing clients into more value-added services. The bank currently fields a team of 450 advisers and investment specialists furnishing a full range of discretionary, advisory, and execution-only services to the rapidly expanding clientele.

The bank differentiates between clients, says Katja Kok, head of Private Banking and Wealth Management, Netherlands. The advice on financial planning and asset management needed by an individual with €5 million in assets is “perhaps even more relevant for someone with an invested capital of €500,000,” she says.      —JG

Bradesco Global Private Bank is working to grow its HNW and UHNW client base by focusing on the midmarket. To appeal to prospective customers with a net worth ranging from $1 million to $24 million, the bank is increasing its international offering, promoting better services for multinational Latin American fortunes.

Since 2020, that strategy has including acquiring other providers, including the Brazilian private banking operations of JP Morgan and BNP Paribas, further cementing its position with the country’s inbound transnational wealth.

It is also pushing into US market, building on its 2020 acquisition of Coral Gables–based BAC Florida Bank. Bradesco aims to bridge the gap for US-based Latin American customers in search of a trusted brand to manage their transnational fortunes.   —ES

Catering to one in four of the world’s billionaires—nearly 15,000 HNW and UHNW clients in over 130 countries, and more than 1,700 family offices—Citi Private Bank’s strong position helped it weather the year’s challenging conditions, including higher interest rates and geopolitical tensions.

As a division of Citi Global Wealth, Citi Private Bank maintains clear strategic priorities, focusing on the high end of the UHNWI market and clients whose net worth exceeds $25 million. That concentration helped the bank to achieve robust client growth in 2023, adding over 900 new clients representing a 21% increase over the previous year, a new record for the bank. The average net worth of Citi newcomers rose as well, by 12% to $450 million. That growth spurt gives Citi Private Bank a total of $461 billion in client assets, an 11% increase from 2022. Despite the adverse market environment, total revenue remained steady.         —TM