Emerging Banking Report 2012 and the complete VELHON300 Ranking: Branch networks% expansion in emerging markets

• Publication date: June 2012
• Report size: 70 pages

Emerging Banking Report 2012: VELHON Partners is pleased to present the second edition of its annual Emerging Banking Report 2012 (EBR 2012). This project relies on the annual VELHON300 rankings, which offers qualified unit tracking of the banks posting the greatest banking branch openings growth in 2012. It makes it a unique benchmark tool for bankers, research firms, investment funds and financial sector players. The panel of b...

Emerging Banking Report 2012:

VELHON Partners is pleased to present the second edition of its annual Emerging Banking Report 2012 (EBR 2012). This project relies on the annual VELHON300 rankings, which offers qualified unit tracking of the banks posting the greatest banking branch openings growth in 2012. It makes it a unique benchmark tool for bankers, research firms, investment funds and financial sector players.
The panel of banks examined has been increased to 366 banks (from 334 in EBR 2011), representing more than 241,000 branches in 44 countries (compared to 39 in EBR 2011). This report offers a multi-criteria and multi-country panorama analysing the expansion and financial performances of banking networks in emerging countries. We added the analysis of key financial data (total balance sheet, interest income and the loan-to-deposit, operating expense, equity and provisions ratios). With the addition of cross-data analysis to the report, this tool enables the user to better understand the relationship between the expansion of banking networks and financial performances and, therefore, apprehend the financial relevancy of banking branch expansion strategies in emerging countries.

THE MAIN FINDINGS

The trend is toward normalisation
Following the 2006-2008 period, characterised by the relatively homogeneous development of banking markets (financial aggregates growing faster than GDP, catch-up of banking sectors and sophistication of business models leading to growth in the loan-to-deposit ratio), banks in emerging countries established, often ambitious, strategic growth plans. In the recent period, particularly in 2011, emerging country bank performances have entered a period of stabilisation

Banking networks: continued deceleration
Given the growth slowdown to 2.8% in 2011 from 4.1% in 2010, banking networks continued their deceleration begun in 2009. Indeed, the crisis has made it harder for sector players to generate sufficient investment capacity and to bring their new branches to profitability quickly.

Size premium
Aside from Eastern Europe, local banks are still the most dynamic, with average growth (excluding Europe) of 7.6% in 2011, versus 9.2% in 2010. The smaller banks were hit by a significant slowdown in 2011, as were the medium-sized banks. State-owned banks have maintained their expansion momentum (3% network growth). Foreign banks’ growth of 1.7% confirms the end of their period of expansion momentum, despite the existence of some targeted initiatives and a pick-up in Africa.

Expansion strategies have overall been effective although marked by diversity
Innovation and their mass-market commercialisation and servicing are specific to the banking distribution models of emerging countries. These strategies have already proven to be winners in terms of profitability and the management of operating expense ratios.

VELHON300 – 2011 results
Ranked number one, Brazilian bank Bradesco (12th in 2010 ranking) saw its network expand 28% with the opening of 1,009 branches yearly. It replaces State Bank of India (2nd in 2011 with 516 branches) as number one, which had been the leader since 2008.

The Complete VELHON300 Ranking:
The VELHON300 is a Benchmark that analyzes banking network performance in more than 300 banks in 44 emerging countries. We have followed banks in terms of branch opened in 2011.

Global Banking Industry

Preface
Executive Summary : the main findings
Scope of report
1. Context of challenges facing banks in emerging countries
1.1 A growing economic and banking force
1.2. Retail Banking is the future
2. Financial performances of banks
2.1. General return to normal
2.2. Zones become increasingly divergent
2.3. Big is beautiful
3. Toward emerging country-specific distribution
3.1. Need to strengthen profitability per client
3.2. Branches key to model mix of emerging bank distribution
4. The development of banking networks
4.1. Review of main findings of year-end 2010: deceleration already begun
4.2. 2011 : slowdown continues in uneven manner
4.3. The decisive role of endogenous factors
4.4. Financial performances and network growth
4.5. Africa : What expansion on 2020 horizon ?
5. Innovations and expansion : Successes of the year
5.1. Laureates of the VELHON300 – 2012
5.2. The 2012 Awards
Appendices
Methodology
List of countries and banks tracked by the EBR
Country Monographs
What is the VELHON300 tool?
Who are we

Banking in World

Iraq Polio, 60-69 Yrs, Male, Dalys

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• Industries : Banking
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