BANK OF THE YEAR
This year may be remembered as the year the banking sector started to fight back against the regulators after years in the doldrums post the financial crisis.
Profitability is up, lenders are at last overcoming tough new regulatory hurdles and a stable future could be just around the corner. And the British government has made it easier for foreign banks to operate here.
Banks have now called on European governments to rein in the urge for more regulation. A KPMG report said governments should “recognise the risk that over-regulation in consumer and investor protection will take us towards the ‘stability of the graveyard’.”
Here is our pick of the top five in this much-maligned but vital sector.
AND THE NOMINEES ARE…
TOMORROW: BUSINESS SERVICES OF THE YEAR
Metro Bank, last year’s winner of this award, has continued to make quick progress, helped in part by the seven-day current account switching service which came in late last year. The high-street lender – which was established in 2010 – has more than 360,000 customer accounts. And over the past 12 months it has increased its number of branches, or stores as it calls them, from 20 a year ago to 27 today. Metro is looking at going public, with an IPO pencilled in for next year and it also expects to make its first profits then. It has also reported a surge in commercial loans to £960m, a year-on-year increase of 298 per cent.
BANK OF AMERICA MERRILL LYNCH
Bank of America Merrill Lynch’s investment banking arm is growing strongly this year, making the most of the IPO boom, jumping from seventh to fourth in Europe in Dealogic’s rankings. On M&A it has moved up from fourth to third place. And it has also dodged much of this year’s crunch in the Fixed Income Clearing Corporation (FICC) trading revenues. It is suffering from some legacy problems – Bank of America came to the rescue of Countrywide in the midst of the credit crunch, saving the financial system even more pain, but it is now performing strongly, increasing its dividend in 2014 for the first time in seven years.
Handelsbanken has come almost out of nowhere in the UK market in the last few years, quietly working its way up to 173 branches with remarkable modesty about its progress. It has also joined the boom in mortgage and business loans, with overall lending in the UK increasing 17 per cent on the year to £12.26bn. Mortgage lending jumped 29 per cent to £3.58bn, while business lending increased 13 per cent to £8.68bn. It is big on the traditional relationship retail banking model which suits the mood in the UK. The wider Handelsbanken success in Sweden has given it the financial heft and experience to break into the British industry and make startlingly rapid progress.
Canaccord Genuity is growing rapidly on mid-market deals, across the world, taking ground in an area that the bulge bracket banks don’t focus on. The Canadian bank’s innovative approach has helped its profits more than double compared with last year. Recent deals in Britain include the Game, Patisserie Valerie and Foxtons IPOs. Canaccord Genuity is also online discounter MandM Direct’s nominated adviser and joint bookrunner in its initial public offering, which is expected to value the group at between £140m to £170m.
Santander has worked hard to build its brand since the financial crisis, using its strong Spanish parent for support, and making the most of its scandal-free reputation. It is a big winner from the current account switching scheme, gaining more than 200,000 UK customers through the service in the past year. The bank – formerly known as Abbey National in the UK – is pushing hard to expand its small business lending operations, becoming a major player in what had been a very concentrated market – and it is making progress despite new regulations which tilt the playing field against SME lending.