2008 In our 15th annual survey of top banking performers in emerging markets, we name those banks that are consistently providing high levels of service in fast-evolving markets.

The leading banks in many emerging markets are reporting big gains in earnings, at a time when money center banks in the industrialized economies are suffering significant losses as a result of the global credit crisis. Fast economic growth and lack of exposure to the US subprime mortgage problems are two reasons that well-managed banks in emerging markets are performing so well.

This out-performance is true not only of banks operating in the oil-rich countries of the Middle East and the fast-growing export economies of Asia but also in some African countries, as well as in Central and Eastern Europe and in Latin America.

International banks from the major industrialized nations and increasingly aggressive regional financial institutions are providing growing competition for local banks in emerging markets. Attracting and keeping talented employees is the biggest challenge facing most financial institutions operating in these markets.

While bankers in the developed economies are bracing for an economic slowdown, their counterparts in the emerging markets are more worried about a flare-up in inflation and keeping up with the fast pace of growth in their home markets. The emerging market banks are doing their best to keep costs under control and to meet the rapidly expanding requirements of their customers. Many of them are opening new branches and acquiring competitors.

In many emerging markets, banks are also extending a hand in providing desperately needed social services, including support for healthcare and education. Standard Chartered Bank Zambia, for example, is helping to distribute insecticide-treated mosquito nets to fight malaria. Bankers are also paying more attention to the effects of their lending policies on the environment and are introducing technology that makes doing business in emerging markets far simpler than it used to be.

In selecting this year's winners, we relied as always on input from industry analysts, corporate executives and banking consultants, as well as research by Global Finance's editorial team. Our selection criteria included knowledge of local conditions and customer needs, growth in assets, profitability, strategic relationships, experienced staff, innovative products, competitive pricing, level of non-performing loans and use of technology.

Altogether, we chose the best emerging market banks in five regions of the world and 91 countries. The winners are not always the biggest banks but, rather, the best banks-those with the qualities that corporations should look for when choosing a bank. These are banks with effective risk-management systems, first-rate service and good corporate governance. Many are involved with microfinance and lending to small and medium-size businesses, as well as meeting the needs of the growing ranks of major corporations in their countries.

Fast-growing emerging markets such as China and India are helping to keep the global economy afloat at a time when the developed economies of the United States, Europe and Japan are faltering. Strong spending by oil-exporting countries also is helping to support growth. The best banks in emerging markets are helping to ensure that banking systems in these countries offer the products and services necessary to promote development and, ultimately, improve the living standards of the majority of mankind. The winners of these awards are deserving of them because of their hard work and vision, not simply because they happened to be based in the right country at the right time. -Gordon Platt

CENTRAL & EASTERN EUROPE

Regional Winner: RZB/Raiffeisen International

The expansion of the RZB Group and Raiffeisen International in Central and Eastern Europe continues unabated. Building on its acquisition of Bank Aval in Ukraine in 2005, it acquired Russia's Russian Impexbank in early 2006 and the Czech Republic's eBanka in July of that year. The acquisition of Impexbank was particularly notable: When the local Raiffeisen Bank and Impexbank merged in November 2007, the new entity became the local number seven and the leading Western bank in Russia. This expansion has not come at the cost of profitability. Earnings have continued at record levels, with consolidated profit for the third quarter of 2007 of euro224 million-51% higher than the same quarter a year earlier and the best quarterly result in the group's history. Most impressively, it was the 11th consecutive quarter of record earnings for the bank. Consolidated profit reached euro626 million in the first three quarters-an increase of 43% compared with the same period of 2006. Over the past five years Raiffeisen International has increased its consolidated profit by an average of 55% a year.

* Herbert Stepic, deputy chairman and CEO

www.rzb.at

Raiffeisen's, Albanian flagship, the Savings Bank of Albania

ALBANIA

Raiffeisen Bank Albania

Raiffeisen Bank Albania is the largest bank in the country and occupies the number-one position for all major performance indicators. Its asset base is close to euro2 billion, and it has a network of 96 branches throughout the country-almost three times more than its nearest competitor. With 160 ATMs, 400 point-of-sale (POS) terminals and a team of mobile bankers, Raiffeisen-which, as Albanian Savings Bank, was bought in 2004-has a distribution network almost three times larger than its nearest competitor. Over the past three years Raiffeisen has been completely transformed from a state bank into a full-service bank, serving all sectors of the business and private individual markets. Its loan portfolio has grown from zero in 2004 to euro483 million by the end of 2007. Total assets grew 9% in 2007, net profits rose an astounding 37% on the previous year, and return on equity (ROE)-while down on 2006-was an extremely impressive 46.69%.

* Oliver Whittle, CEO

www.raiffeisen.al

BELARUS

Belagroprombank

Belagroprombank, a state-owned company, is the second-largest bank in Belarus (after Belarusbank) by assets but is growing rapidly. Its asset base grew an impressive 142.4% in 2007 while its deposit base grew 140.1% and its regulatory capital increased 121.8%. While return on equity is still a miserable 4.4%, Belagroprombank appears to have embraced the opportunities available: Its smart new logo reflects a new approach for the bank, with products targeting specific segments of the market. The bank is beefing up its retail offering with new products, including credit and debit cards, and is increasing its branch network. It has also opened its first branch in Italy following the growth of trade between that country and Belarus. International investors have welcomed the changes Belagroprombank is implementing. The bank accessed the syndicated loan market for the first time in August 2006 and returned in February this year to a rapturous welcome that resulted in the issue being doubled to $40 million.

Rumas Sergej Nikolayevich, chairman of the board of management

www.belapb.by

BOSNIA & HERZEGOVINA

Raiffeisen Bank Bosna i Hercegovina

Raiffeisen Bank remains the largest individual bank in Bosnia and Herzegovina and is the best, with an unrivaled offering for private individuals, small and medium-size enterprises (SMEs) and the largest entities in the country. The bank grew its total number of customers to nearly 709,000 in 2006-an increase of 16.8%. Moreover, at the end of 2007, its assets amounted to euro1.96 billion-23% higher than a year earlier-and ROE reached 17.7%. Raiffeisen ranks second after the combined forces of UniCredit HVB's three banks in Bosnia and Herzegovina for loan volume but is growing more rapidly at 15.64% growth in 2007 compared to HVB UniCredit's 10.53%. Similarly, while the UniCredit HVB group took in more deposits in 2007, Raiffeisen experienced the fastest growth at 15.62%.The bank plans to expand its network to 100 branches from the current 91 and to offer an increasingly sophisticated product range to its customers-including cash management, standard credit products and project finance.

Michael Muller, director, Raiffeisen Bank Bosna i Hercegovina

Michael Muller, director

www.raiffeisenbank.ba

BULGARIA

UniCredit Bulbank

During 2006-the last year for which figures are available- Bulbank, which is part of UniCredit, prepared the groundwork for its merger with HVB's Bank Biochim and Hebros Bank as part of the global merger of UniCredit Group and HVB Group in Bulgaria. The merger, which finally took effect in December 2006 and was completed by April 2007, has created a national leader in most market segments and business lines possessing a strong customer base, robust capital and sound asset quality. UniCredit Bulbank was ambitious in its goals for the merger, implementing a new technology platform for all three banks as part of the change. Nevertheless, over the year business did not suffer. Indeed, Bulbank exhibited healthy growth in income and volumes, confirming its strong focus on value creation and its prudent risk policy, and it increased net profit by 25.1% on 2005. Profitability improved markedly: The bank's return on average equity (ROAE) went up to 19.5% while the cost/income ratio further improved to 38.9%. Meanwhile, non-performing loans fell to just 1.5%- helping the bank to gain an S&P ratings upgrade to BBB+ in October 2006, equal to the sovereign rating of the country. Levon Harnpartzournian, chairman and CEO

www.bulbank.bg

CROATIA

Privredna Banka Zagreb

Privredna Banka Zagreb (PBZ) has been one of the leading banks in the Croatian banking sector ever since its establishment and is now part of Italy's Intesa Sanpaolo. PBZ now has more than 1.3 million retail and corporate clients and a network that includes more than 220 branches. The bank has been active in developing new products and plays a major role in financing the economy and the development of SMEs. In December 2006 PBZ acquired a controlling stake in LT Gospodarska Banka (LTG) in Bosnia and Herzegovina. Following the acquisition of UPI Banka by Intesa Sanpaolo in February 2006, LTG and UPI were merged in July 2007, giving Intesa Sanpaolo Group 77.17% of the total number of shares, of which Intesa Sanpaolo holds 58.22% and PBZ 18.95%. PBZ's profit before tax grew 18.6% in 2007 while net profit was 18.5% higher. The total assets of the PBZ Group increased 8.6% during the year.

Bozo Prka, president

www.pbz.hr

CZECH REPUBLIC

Ceskoslovenska Obchodni

Ceskoslovenska Obchodni (CSOB) operates in both the Czech Republic and Slovakia and is the largest bank in Central Europe, measured by total value of assets. In June 2007 Belgium's KBC Bank acquired full control of CSOB following sales by the remaining shareholders in the bank. CSOB represents a sizable component of KBC's value: When KBC took control, CSOB represented about 20% of KBC's market capitalization. CSOB Group recorded a 22% increase in net profit in 2007 while assets under management rose by 21% and lending by 26%. Despite strong business growth, CSOB's underlying operating expenses increased by only 3% as a result of strict cost controls. Meanwhile, the bank has continued to invest in innovations in the mortgage, credit and debit card and consumer banking market. CSOB's continuing strategy of multibranding and bancassurance appears to be working well.

* Pavel Kavanek, CEO

www.csob.cz

ESTONIA

Hansabank

Part of the Swedbank group since 2005, Hansabank is the largest financial institution in the Baltic region. After a recordbreaking third quarter, turbulence in the financial markets together with uncertainties in the Estonian real estate sector influenced the fourth-quarter results, and net income declined-a trend that is likely to continue in 2008 given slower lending growth, higher risk cost and a rising cost of funds. Hansabank has already instituted stricter lending policies in preparation for a worsening of credit quality in the economy as a whole, and lending growth fell from 32% at the end of the third quarter of 2007 to 25% for the final quarter. The bank's deposits grew by 15% to euro4.7 billion, with most of the growth coming from corporate clients. Despite the weaker outlook at the end of 2007, overall it was a strong year for the group: Net profit increased by 49% to euro484 million, ROE reached 29%, and the cost/income ratio was 41% in 2007-the latter two figures being all-time bests for the bank.

* Erkki Raasuke, chairman and CEO

www.hansa.ee

GEORGIA

Bank of Georgia

Bank of Georgia's total assets in 2007 grew by a whopping 146% to GEL2.9 billion ($2 million). Net loans and total deposits also increased by more than 140% on 2006 levels. Both net interest and non-interest income also posted healthy gains of 99% and 87% respectively. The bank's business may be expanding rapidly, but it managed to make a significant dent in its cost-to-income ratio, which declined from 56.7% in 2006 to 49.6% in 2007. In just two years it has also managed to significantly reduce its non- performing loan (NPL) ratio from 4.5% in 2005 to 1.5% in 2007. Bank of Georgia boasts the largest ATM network in the country and services a broad range of customer segments from retail banking through to corporate and investment banking.

* Irakli Gilauri, CEO

www.bog.ge

HUNGARY

OTP

OTP continues to be the largest bank in Hungary and has performed strongly in terms of growth, with an 11% increase in after-tax profit, although its otherwise excellent performance was hampered by the poor performance of its Serbian subsidiary. Overall, the group enjoyed annual volume growth, including a 28.8% year-on-year increase in gross loans and a 19% increase in deposits in the fourth quarter. Core banking activity in Hungary proved promising, with loans growing by 12.7% year-on-year in the full year while OTP Fund Management also managed to gain market share. However, if OTP is to retain its crown in future years, it will need to up its game. The group expects consolidated net profit to increase by at least 10%, but it has to be wary of changes in its domestic market. Its market share of total assets in Hungary in the financial year 2007 was almost flat while mortgage lending, consumer loans, retail deposits and corporate and municipal lending market share fell.

* Sandor Csanyi, chairman and CEO

www.otpbank.hu

LATVIA

SEB Banka

SEB Banka, which changed its name from SEB Unibanka on April 7 this year, is a leading bank in Latvia, servicing almost a quarter of all the Latvian residents' deposits and a fifth of Latvia's credit market as well as holding the leading position in the third- pillar pension system and life insurance services. The bank enjoyed a strong 2007 as a result of a prudent credit policy, the growing demand of the Latvian business community and population for savings and investment services, and the successful ongoing implementation of the SEB group business model. A steady rise in business volumes, efficiency and quality in 2007 resulted in an 81% increase in net profit. To be sure, this included profit from the sale of the bank's real estate, but even excluding this the bank's growth was 42% higher than in 2006. Increases in loans during the year of 19% nearly matched increases in deposits of 18%-setting the bank up comfortably for what is expected to be a slower growth rate, a more prudent economic development policy and weaker business activity and household spending in 2008.

* Ainars Ozols, president

www.seb.lv

LITHUANIA

SEB Bank

SEB Bank, which changed its name from SEB Vilniaus Bankas in January, is a market leader in Lithuania, with 1.6 million clients, a 39.2% market share of assets under management, 30.2% in deposits, 31.3% in loans, 42.4% in payment cards and a strong position in equity and bond brokerage and securities custody. The bank had a particularly successful year in 2007, with an increase in its customer service network to 72 branches, 250 new employees and a range of new services. Most important, SEB Bank was able to achieve this expansion-which included a 32.3% growth in assets-with an increase in its ROE from 21.1% in 2006 to 29.53% in 2007, a huge 74% increase in profit before tax and a 77% increase in net income. Shareholders' equity grew by 33% over the year.

* Audrius Ziugzda, president

www.seb.lt

MACEDONIA

Komercijalna Banka

In 2006, the last date for which results are available, Komercijalna Banka enjoyed its strongest year since its founding 51 years earlier. The bank achieved a gross profit a staggering 99% higher than in 2005-a record for the bank-while also improving its capital adequacy ratio to 11.8%, well above its goal of 8%. Meanwhile, return on equity was 18.5% and return on assets (ROA) 1.9%. The total resources of Komercijalna Banka increased 18% in 2006, with the most notable contributor to this growth being retail deposits, which increased 18%, and deposits from legal entities, largely corporates, which grew 25%. Corporate lending continued to grow during the year as the bank introduced new products and simplified procedures for loan approvals. The bank also made great strides in assessing its credit portfolio and credit risk.

* Hari Rostov, first general manager

www.kb.cotn.mk

MALTA

Bank of Valletta

Bank of Valletta retains its position as Malta's largest and most successful bank. In a November report on Bank of Valletta, Fitch Ratings said that its ratings reflect the bank's "position as the largest bank in Malta-its market share in deposits is 46% and loans 41%-its consistently sound profitability, satisfactory capitalization and liquidity, and reducing impaired loans." Bank ofValletta continues to benefit from the continuing recovery of the Maltese economy, helping to increase profitability in 2007. Operating profit rose 18% in 2007 on the back of dynamic loan growth and a favorable interest rate environment, which resulted in growing net interest revenue. The bank is also doing much internally to grow profit. Operating costs were tightly controlled and impairment charges minimal in 2007-falling from 7.4% at September 2006 to 4.8 % at the end of September 2007-while the bank grew its loan book by 12.5% during the year.

* Tonio Depasquale, CEO

www.bov.com

Tonio Depasquale, CEO, Bank of Valletta

MOLDOVA

Moldova Agroindbank

In 2006, the last year for which figures are available, Moldova Agroindbank celebrated 15 years since its founding. The year was a difficult one for the Moldovan economy, with increased costs for natural gas and imported fuel products, as well as the blocking of external markets for Moldovan products, hampering growth. Nevertheless, Moldova Agroindbank was able to broaden its customer base, improve its product range and hugely boost the bank's earnings power. Moldova Agroindbank is the largest bank in Moldova, with 20.7% of local banking assets, 18.8% of total share equity and a market share of 23.5% for lending and 21.8% for deposits. Its performance in 2006 was unstoppable: Profit increased by an astounding 80.5% compared to 2005-reaching the highest level in the bank's history. Net interest income increased 49% while non- interest expenses, due to prudent administration and a program of centralization, were up only 26.2% compared with 2005. The increased income growth and relatively slower expenses growth led to a considerable improvement in the bank's cost/income ratio, which hit 48%-still high by international standards but a decrease of 10% compared with 2005. * Natalia Vrabie, president

www.maib.md

POLAND

BPH

Following the merger of the vast majority of HVB-owned BPH with UniCredit-owned Bank Pekao at the end of November-following the parent banks' own merger-the new Bank Pekao is the largest bank in CEE in terms of market capitalization and the largest bank in Poland in terms of assets, credits, deposits and investment products. The new consolidated bank reported an increase in net profit of more than 20% and an increase in operating efficiency with an ROE of 23.7%. Surprisingly, it was the vastly smaller BPH-the assets of which were reduced by 80% following the absorption of much of the bank into Pekao-that looked most attractive in 2007 on a consolidated basis. BPH broke its records for its profitability and efficiency, with a total gross profit from continued and discontinued (merged with Pekao) operations 25% higher than in 2006 and a pre-tax ROE of nearly 30%. The break-up has not dented the bank's capital adequacy, which at the end of 2007 was 15.3% compared to 12.09% at the end of 2006. BPH's universal bank model remains a potent force in the Polish banking market, and its efforts to rebuild market share following the split are likely to be rigorous following the acquisition of UniCredit's stake by GE Capital.

Jozef Wancer, chairman, BPH

* Jozef Wancer, chairman

www.bph.pl

ROMANIA

BRD-Groupe Societe Generale

BRD-Groupe Societe Generale enjoyed another very strong year in 2007, with net banking income 42% higher, operating profit up 54% and net consolidated profit 36%) higher. Deposits grew 37%> in 2007 while loans increased by 50% as the bank's retail and corporate client base continued to swell.