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Korea’s banks face a difficult couple of years: the market has become extremely competitive, and analysts agree that raising profitability will be tough. As in Japan, the answer for the top banks might lie in expanding elsewhere in Asia, where there is still plenty of room for growth. Shinhan Bank, which retains the award for best bank in Korea that it won last year, has already begun that process by opening Shinhan Khmer Bank in Cambodia, as well as a branch in Beijing and a fourth in Dong Nai in Vietnam.

OGX, the Brazilian mining company owned by billionaire Eike Batista, and the Bolsa Mexicana de Valores, the Mexican stock exchange, both came to market last month with landmark IPOs. They were important deals in a number of respects, including getting Latin primary market issuance going again this year. At least as significant was the emergence of China’s sovereign wealth fund, China Investment Corporation, as an investor in Latin American IPOs.

Ceiba Investments, a closed-end fund that invests solely in Cuban assets, is set to list its shares on London junior market AIM this month.

Although the end of the property and construction boom made it a worrying year for Irish banks, Allied Irish has managed to turn in decent results and post gains in market share across a number of segments in its home market including business lending, personal lending, residential mortgages and deposit.

The biggest retailers will regret having been blind to opportunities in emerging Europe.

In Bolivia, political tensions continue to run high as disputes over an east-west split in the country intensify. Despite this the banking sector has grown in the past 12 months, with both Banco Mercantil Santa Cruz and Banco Nacional de Bolivia showing the strongest growth rates and market shares in terms of loans. However, it is Banco de Crédito de Bolivia that claims the highest net income for the past year. As of March 2008, BCP’s net income was ranked in first place in the industry, showing a 29% increase over the same period in 2007.

Despite a challenging political and economic environment in Hungary, OTP Bank continues to perform well, registering a net profit of Ft141.7 billion ($907.5 million) in 2007, up more than 11% on 2006. OTP dominates all segments of the Hungarian banking market, accounting for more than 50% of municipal loans and deposits, more than 30% of retail deposits and loans as well as 10% of the corporate segment. With more than 400 branches, it is by far the largest retail bank in Hungary, with almost 4.6 million customers, but also services more than 200,000 corporate clients. The bank has invested heavily in technology with the result that its award-winning OTPdirekt internet banking channel was used by more than 1.5 million customers in 2007, giving it a best-in-class 38% market share. Its telephone banking services have also proved a hit, servicing more than 50% of all Hungarians using mobile phones. In corporate banking, the bank offers an extensive range of services spanning leasing, forfaiting, factoring, project finance and syndicated loans in both forint and foreign currencies. The bank also has a highly successful asset management arm, OTP Fund Management, that manages building society, health fund and insurance portfolios as the portfolio of the National Deposit Insurance Fund, Investor Protection Fund and Guarantee Fund of Pension Funds, which were established by the Hungarian state to protect investors’ interests. OTP Fund Management has a 32.4% market share, with assets under management growing by 25% in 2007 to Ft815.1 billion.

DNB Nord Bankas has enjoyed another stunning year in Lithuania, with total assets increasing by 47.55% – well in advance of the growth of the broader market – giving it a market share in terms of assets of 13.2%. Loan growth was a dizzying 50.4%, with retail loans up 66.1% and corporate loans increasing by 36.4%. Deposits have not quite kept pace with loan growth but still rose 36.1%, with corporate deposits increasing by 51%.

Khan Bank again deserves to win the award for Mongolia’s best financial institution, having built on the country’s vast energy and minerals resources to create a lender with strong financial fundamentals. Its closest rival, Trade Development Bank of Mongolia, had a strong year but still failed to outclass Khan, which posted a 60% year-on-year jump in 2007 post-tax earnings to Tug19.3 billion ($16.7 million). Net interest income surged 57% to Tug53.7 billion, and the bank’s total equity nearly doubled, to Tug60 billion. Despite global market wobbles, Khan Bank managed to maintain a high capital adequacy ratio: at 11.44% it was slightly lower at end-2007 than a year earlier, but still above 2005 figures. Khan Bank’s executives are also expanding its branch network, having opened 45 new offices during 2007 and boosted headcount by a third, to 3,560.

The strong run in emerging market equities and the relative outperformance of non-US developed market stocks appears to have ended as a weak US housing market weighs down on consumers and credit markets and high commodity prices stoke inflation worldwide.

When good times turn to bad, banks have a chance to prove their mettle. Full-year results for all banks for 2007 inevitably included half a year of benign market conditions followed by a steady worsening as the US sub-prime crisis began to spread. By the end of the first quarter of 2008 – the cut-off of the 12 months that Euromoney’s Awards for Excellence are based on – it became clear that one of the Nordic region’s banks – Nordea – was weathering the storm far better than its peers.

Deutsche Bank