Emerging Markets' Safest Banks

CONTINENTAL EROSION

 

By Andrew Cunningham

 

Global Finance presents its annual ranking of the Top 50 Safest Banks in the Emerging Markets.


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Banks in the Arabian Gulf and Asia have strengthened their hold on the rankings of safest banks in emerging markets, accounting for 43 of the safest 50 listed by Global Finance magazine, compared with 39 a year ago.

 
Ironically, the European banking markets caused some of the biggest changes to the Safest Emerging Markets Banks rankings over the past year: Only three Eastern European banks are included in the top 50, compared with six a year ago. Downgrades of the European banks have led to lower ratings for many of their Eastern European subsidiaries.


The downgrading of South African banks led to Absa Bank’s falling out of the global ranks, with the result that no sub-Saharan banks are included in the list.

 

TOP SCORERS

The four top-scoring banks each hold two AA- ratings and one A+ rating. The top three are unchanged from last year: China Development Bank receives the highest mark on the basis of its asset size, followed by Agricultural Development Bank of China and National Bank of Abu Dhabi. National Bank of Kuwait moves up one place to fourth, replacing Banco Santander Chile, which falls to 15th position.


Banco Santander Chile’s fall means that BancoEstado now ranks as the safest bank in Latin America, holding ninth position in the global scale.


150 Features_12 EM Safest Banks

Global Finance’s listing of the safest banks in emerging markets is based on ratings assigned by the three major credit rating agencies. To be eligible for consideration, banks had to be among the largest 500 emerging markets banks in the world, based on asset size, and they had to have at least two ratings. Subsidiaries of developed markets banks may be included, provided that they are not 100% owned. Eligible banks are awarded points corresponding to the level of each of the ratings they hold. If a bank has only two ratings, then an implicit score for the third rating is calculated by taking the average of the two actual ratings and deducting one point. If several banks have the same score, they are ranked by asset size.

 

Four countries supplied three-fifths of the Safest 50 banks—a greater concentration than last year. Saudi Arabia and South Korea supplied nine banks each, and China and the United Arab Emirates six each. From Latin America, only Chilean banks scored highly enough to rank in the top 50. Banks from the Arabian Gulf provided 22 of the top 50, the same number as last year.

 

Fitch Ratings / Standard & Poor's Moody's
AAA Aaa
AA+ Aa1
AA Aa2
AA- Aa3
A+ A1
A A2
A- A3
BBB+ Baa1

  

The top 50
Rank Bank Name Fitch rating S&P rating Moody's rating Total Points Reporting Assets ($mn) Country
1 China Development Bank A+ AA- Aa3 20 992,157 China
2 Agricultural Development Bank of China A+ AA- Aa3 20 310,029 China
3 National Bank of Abu Dhabi AA- A+ Aa3 20 69,617 United Arab Emirates
4 National Bank of Kuwait AA- A+ Aa3 20 48,912 Kuwait
5 Korea Finance Corporation AA- A+ Aa3 20 157,053 South Korea
6 Industrial Bank of Korea AA- A Aa3 19 161,241 South Korea
7 Qatar National Bank A+ A+ Aa3 19 82,955 Qatar
8 Samba Financial Group A+ A+ Aa3 19 51,406 Saudi Arabia
9 BancoEstado A+ A+ Aa3 19 40,045 Chile
10 Bank of Taiwan N/R A+ Aa3 18.5 129,803 Taiwan
11 Banco de Chile N/R A+ Aa3 18.5 41,699 Chile
12 National Commercial Bank A+ A+ A1 19 80,320 Saudi Arabia
13 Al Rajhi Bank A+ A+ A1 18 58,884 Saudi Arabia
14 Riyad Bank A+ A+ A1 18 48,237 Saudi Arabia
15 Banco Santander Chile A+ A Aa3 18 47,282 Chile
16 Abu Dhabi Commercial Bank A+ A A1 17 50,027 United Arab Emirates
17 Kuwait Finance House A+ A- Aa3 17 48,312 Kuwait
18 Banque Saudi Fransi A A Aa3 17 37,461 Saudi Arabia
19 SABB A A Aa3 17 36,975 Saudi Arabia
20 Union National Bank A+ N/R A1 17 22,456 United Arab Emirates
21 Industrial and Commercial Bank of China* A A A1 16 2,458,988 China
22 China Construction Bank A A A1 16 1,949,213 China
23 Bank of China A A A1 16 1,877,514 China
24 KB Kookmin Bank* A A A1 16 222,668 South Korea
25 Shinhan Bank A A A1 16 198,706 South Korea
26 NongHyup Bank A A A1 16 170,441 South Korea
27 Arab National Bank A A A1 16 31,353 Saudi Arabia
28 Agricultural Bank of China A N/R A1 15.5 1,853,313 China
29 Hana Bank* N/R A A1 15.5 133,409 South Korea
30 Land Bank of Taiwan* N/R A- Aa3 15.5 75,505 Taiwan
31 First Gulf Bank A+ N/R A2 15.5 42,881 United Arab Emirates
32 Abu Dhabi Islamic Bank A+ N/R A2 15.5 20,241 United Arab Emirates
33 Commercial Bank of Kuwait A+ N/R A2 15.5 13,332 Kuwait
34 Mega International Commercial Bank A- A A1 15 75,962 Taiwan
35 Chinatrust Commercial Bank A A A2 15 62,080 Taiwan
36 Česká spořitelna A A A2 15 44,764 Czech Republic
37 Komerční banka A A A2 15 37,854 Czech Republic
38 Banco de Crédito e Inversiones A- A A1 15 31,029 Chile
39 Commercial Bank of Qatar A A- A1 15 19,654 Qatar
40 Woori Financial Group* A- A- A1 14 210,480 South Korea
41 Emirates NBD A+ N/R A3 14 77,499 United Arab Emirates
42 Saudi Hollandi Bank A- N/R A1 14 15,346 Saudi Arabia
43 Doha Bank A A- A2 14 14,401 Qatar
44 BankMuscat A- A- A1 14 18,798 Oman
45 Korea Exchange Bank A- A- A2 13 87,181 South Korea
46 Saudi Investment Bank A- A- A2 13 13,852 Saudi Arabia
47 Cathay United Bank* N/R A- A2 12.5 57,404 Taiwan
48 Taipei Fubon Commercial Bank* N/R A- A2 12.5 49,699 Taiwan
49 PKO Bank Polski N/R A- A2 12.5 55,817 Poland
50 Suhyup Bank* N/R A- A2 12.5 18,557 South Korea

Source for ratings: Fitch Ratings, Standard & Poor’s, Moody’s Investors Service

N/R – No Rating

Ratings current on 15 October 2012

Source for reporting assets: Fitch Solutions, except *Moody’s Investors Service


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