Ever wondered which European banks emerged as the most profitable in 2023, according to the Significant Bank Database? Let’s dive into the numbers!
When listing the ten most profitable banks (including subsidiaries), Eastern European banks dominate the leaderboard, with eight of the top ten hailing from Estonia, Bulgaria, Latvia, or Lithuania. Interestingly, six of these are branches of Swedish banks. Despite this strong regional representation, GDP growth appears to have no clear relationship with bank profitability among these top performers.
| Bank | ROA (%) | GDP growth (%) |
| Swedbank AS (EE) | 3.67 | -3.0 |
| DSK Bank (BL) | 3.43 | 1.8 |
| Swedbank AS (LV) | 3.28 | -0.3 |
| AS SEB banka (LV) | 3.28 | -0.3 |
| AS SEB Pank (EE) | 3.22 | -3.0 |
| AB SEB bankas (LT) | 2.69 | -0.3 |
| Finecobank (IT) | 2.62 | 0.9 |
| AS Citadele banka (LV) | 2.61 | -0.3 |
| Swedbank AB (LT) | 2.44 | -0.3 |
| Bank of America DAC (IE) | 2.42 | -3.2 |
Excluding subsidiaries from the analysis reshuffles the rankings significantly. Bulgarian DSK Bank, Italian Finecobank, and Latvian AS Citadele emerged as the top three most profitable banks in 2023. Their return on assets (ROAs) stood at an impressive 2–3 times the sample mean of 1.14%.
This adjustment also reduces the presence of Eastern European banks in the top ten from eight to four. The reason? Many leading banks in these regions are subsidiaries of Western European financial institutions. In contrast, the revised list includes four Nordic banks, two of which are based in Iceland.
| Bank | ROA (%) | GDP growth (%) |
| DSK Bank (BL) | 3.43 | 1.8 |
| Finecobank (IT) | 2.62 | 0.9 |
| AS Citadele banka (LV) | 2.61 | -0.3 |
| Bank of America DAC (IE) | 2.42 | -3.2 |
| Spar Nord Bank (DK) | 2.33 | 1.9 |
| Landsbankinn (IS) | 2.33 | 4.1 |
| Arion Banki (IS) | 2.32 | 4.1 |
| Sydbank (DK) | 2.31 | 1.9 |
| AS LHV Group (EE) | 2.31 | -3.0 |
| Nova Ljubljanska Banka (SI) | 2.23 | 1.6 |
Interestingly, GDP growth doesn’t provide a straightforward explanation for the extraordinary profitability. For example, the mean GDP growth of the sample countries was just 0.7% in 2023, and some of the most profitable banks operated in countries with GDP growth far below this average.
A simple bivariate regression of ROA against GDP growth yielded a statistically insignificant coefficient (0.06). This suggests that high profitability could have, on average, been influenced more by competitive market dynamics than by macroeconomic growth rates in 2023. However, a simple bivariate regression is insufficient for drawing robust conclusions.
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