SAFEST EMERGING MARKETS BANKS 2014

Safety In Numbers

 


The safest 50 EM banks are concentrated in 10 countries; Saudi Arabia, Korea and China account for more than half.


The safest banks in emerging markets continue to be concentrated in a small number of countries. Whereas 21 countries contribute banks to Global Finance’s ranking of the Safest Global Banks 2014, only 10 contribute banks to the ranking of the 50 safest banks in emerging markets.

The distinction is driven by the small number of emerging markets countries that enjoy high sovereign credit ratings, which in turn open the way for high ratings on their banks. Banks in countries with low sovereign credit ratings are effectively barred from receiving high ratings, even if they are strong on a stand-alone basis, owing to the danger that crises at the sovereign level could lead to failures of individual banks.

South Korea and Saudi Arabia each contribute nine banks to the Safest 50, China contributes 8, and Taiwan and the UAE six each. These five countries therefore account for more than two-thirds of the Top 50.

Chile continues to be the only Latin American country to contribute banks to the Top 50, despite recent rating upgrades to banks in Mexico and Peru. Four Chilean banks are included in the Top 50, the same as last year.

The Czech Republic is the only country from the region comprising Central and Eastern Europe and former Soviet Union to contribute banks to the Top 50.

National Bank of Abu Dhabi (NBAD) again heads the rankings of the safest emerging markets banks, with AA- ratings from each of the three major credit rating agencies—it is the only emerging markets bank to achieve this. NBAD ranks 25th in Global Finance’s Top 50 Global Safest Banks ranking. NBAD is followed by nine other banks that each have two AA- ratings and one of A+. The second-, third- and fourth-ranked banks are all Chinese; the next three and the ninth-ranked are South Korean. National Bank of Kuwait ranks eighth, and Chile’s Banco Estado, tenth.

One A rating and two of A- (worth 13 points) suffice to assure inclusion in this year’s emerging markets list, with a score of 12.5 enabling two banks to qualify in 49th and 50th places. Four other banks score 12.5 but are ranked outside the Top 50 based on their asset size: Poland’s Pekao, Taipei Fubon Commercial Bank, Qatar Islamic Bank and Suhyup Bank from South Korea.

Five of the six GCC states have banks in the Top 50. Qatar (with three), Kuwait (with two) and Oman (with one) join Saudi Arabia and the UAE, leaving Bahrain as the only GCC state without a representative, although Bahrain’s Gulf International Bank comes close, with 12 points.

STELLAR SAUDI BANKS

The performance of Saudi banks is remarkable. The Saudi commercial banking system comprises 12 domestic banks, so with nine banks in the Top 50, 75% of the Saudi banking system is represented in Global Finance’s ranking of the world’s safest emerging markets banks. (That contribution would be even greater if it were weighted for asset size.)


The regional list for emerging markets in Asia displays the dominance of Chinese and South Korean banks, which account for nine of the top 10 banks. Bank of Taiwan is the only interloper, in eighth position.As with the global list, no sub-Saharan banks other than those from South Africa come close to scoring highly enough for inclusion.

The eligibility criteria and scoring mechanism for the Safest Emerging Markets Banks are the same as those used for the global list. Banks must be among the biggest 500 in the world, ranked by assets, and they must be rated by at least two of the three major credit rating agencies. A sub-investment-grade rating from any of the agencies bars inclusion, regardless of the level of the other ratings. Eligible banks are then scored, with 10 points being awarded for an AAA rating (though no emerging markets bank carries such a rating) to 1 for BBB-. When a bank is rated by only two agencies, an implied score for the third rating is calculated by taking the average of the other two and deducting one point. We include regional lists only for those regions where the list differs from that of the global rankings (Asia, Middle East, Africa).

NEXT PAGE: METHODOLOGY


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METHODOLOGY | HOW WE MEASURE THE SAFETY OF BANKS

The safest banks chart compares the ratings for the world’s largest 500 banks, based on asset size. Long-term foreign currency ratings issued by Fitch Ratings, Standard & Poor’s and Moody’s Investors Service were used. Where possible, ratings on holding companies were used rather than operating companies, and banks that are wholly owned by other banks were omitted. Government import-export finance institutions were also omitted. Within each rank set, banks are organized according to asset size, based on data for the most recent annual reporting period, provided by Fitch Solutions and Moody’s. Ratings are reproduced with permission from the three rating agencies, with all rights reserved. A rating is not a recommendation to purchase, sell or hold a security, and it does not comment on market price or suitability for a particular investor.

NEXT PAGE: TOP 50 | SAFEST EMERGING MARKETS BANKS 2014


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SAFEST EMERGING MARKETS BANKS 2014 | TOP 50

Rank
Bank
Fitch
Moody’s
S&P
Total Score
Assets
$mn
Statement Date
Country

1

National Bank of Abu Dhabi

AA-

Aa3

AA-

21

88,512

12/31/13

UAE

2

China Development Bank

A+

Aa3

AA-

20

1,341,642

12/31/13

China

3

Agricultural Development Bank of China

A+

Aa3

AA-

20

364,583

12/31/12

China

4

Export-Import Bank of China

A+

Aa3

AA-

20

308,873

12/31/13

China

5

Korea Finance Corporation

AA-

Aa3

A+

20

245,217

12/31/13

South Korea

6

Industrial Bank of Korea

AA-

Aa3

A+

20

201,424

12/31/13

South Korea

7

Korea Development Bank

AA-

Aa3

A+

20

158,921

12/31/13

South Korea

8

National Bank of Kuwait

AA-

Aa3

A+

20

65,958

12/31/13

Kuwait

9

Export-Import Bank of Korea (KEXIM)

AA-

Aa3

A+

20

58,181

12/31/13

South Korea

10

BancoEstado

A+

Aa3

AA-

20

48,802

12/31/13

Chile

11

Qatar National Bank

A+

Aa3

A+

19

121,837

12/31/13

Qatar

12

Samba Financial Group

A+

Aa3

A+

19

54,676

12/31/13

Saudi Arabia

13

Bank of Taiwan*

N/R

Aa3

A+

18.5

142,745

12/31/13

Taiwan

14

Banco de Chile*

N/R

Aa3

A+

18.5

49,356

12/31/13

Chile

15

National Commercial Bank

A+

A1

A+

18

100,608

12/31/13

Saudi Arabia

16

Al Rajhi Bank

A+

A1

A+

18

74,632

12/31/13

Saudi Arabia

17

Riyad Bank

A+

A1

A+

18

54,732

12/31/13

Saudi Arabia

18

Banco Santander Chile

A+

Aa3

A

18

51,734

12/31/12

Chile

19

Abu Dhabi Commercial Bank

A+

A1

A

17

49,869

12/31/13

UAE

20

SABB

A

Aa3

A

17

47,281

12/31/13

Saudi Arabia

21

Banque Saudi Fransi

A

Aa3

A

17

45,348

12/31/13

Saudi Arabia

22

Union National Bank

A+

A1

N/R

17

23,838

12/31/13

UAE

23

Industrial and Commercial Bank of China

A

A1

A

16

3,100,051

12/31/13

China

24

China Construction Bank

A

A1

A

16

2,517,568

12/31/13

China

25

Agricultural Bank of China

A

A1

A

16

2,386,291

12/31/13

China

26

Bank of China

A

A1

A

16

2,273,581

12/31/13

China

27

Kookmin Bank

A

A1

A

16

251,335

12/31/13

South Korea

28

Shinhan Bank

A

A1

A

16

225,550

12/31/13

South Korea

29

Nonghyup Bank

A

A1

A

16

185,093

12/31/13

South Korea

30

Kuwait Finance House

A+

A1

A-

16

57,233

12/31/13

Kuwait

31

Arab National Bank

A

A1

A

16

36,783

12/31/13

Saudi Arabia

32

Land Bank of Taiwan*

N/R

Aa3

A-

15.5

81,246

12/31/13

Taiwan

33

FGB

A+

A2

N/R

15.5

53,106

12/31/13

UAE

34

Abu Dhabi Islamic Bank

A+

A2

N/R

15.5

28,090

12/31/13

UAE

35

Hana Financial Group

A-

A1

A

15

154,344

12/31/13

South Korea

36

Mega International Commercial Bank

A-

A1

A

15

93,986

12/31/13

Taiwan

37

Banco de Crédito e Inversiones

A-

A1

A

15

38,756

12/31/13

Chile

38

Commercial Bank of Qatar

A

A1

A-

15

31,075

12/31/13

Qatar

39

Bank of Communications

A

A2

A-

14

976,818

12/31/13

China

40

Woori Bank

A-

A1

A-

14

236,246

12/31/13

South Korea

41

Korea Exchange Bank

A-

A1

A-

14

101,036

12/31/13

South Korea

42

CTBC Bank

A

A2

A-

14

71,845

12/31/13

Taiwan

43

Česká spořitelna

A

A2

A-

14

48,694

12/31/13

Czech Republic

44

Komerční banka

A-

A2

A

14

43,429

12/31/13

Czech  Republic

45

BankMuscat

A-

A1

A-

14

22,072

12/31/13

Oman

46

Saudi Hollandi

A-

A1

N/R

14

21,458

12/31/13

Saudi Arabia

47

Doha Bank

A

A2

A-

14

18,405

12/31/13

Qatar

48

Saudi Investment Bank

A-

A2

A-

13

21,465

12/31/13

Saudi Arabia

49

Emirates NBD

A+

Baa1

N/R

12.5

93,141

12/31/13

UAE

50

Cathay United Bank*

N/R

A2

A-

12.5

66,661

12/31/13

Taiwan

  • Source for ratings: Fitch Ratings, Standard & Poor’s, Moody’s Investors Service   
  • Source for Reporting Assets: Fitch Solutions, except for * Moody’s Investors Service, and ** bank’s financial reports     
  • Ratings current as of August 14, 2014

NEXT PAGE: SAFEST EM BANKS OF ASIA 2014


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SAFEST EM BANKS 2014 | ASIA

Rank
Bank
Fitch
Moody’s
S&P
Total Score
Reporting Assets $mn
Statement Date
Country

1

China Development Bank

A+

Aa3

AA-

20

1,341,642

12/31/13

China

2

Agricultural Development Bank of China

A+

Aa3

AA-

20

364,583

12/31/12

China

3

Export-Import Bank of China

A+

Aa3

AA-

20

308,873

12/31/13

China

4

Korea Finance Corporation

AA-

Aa3

A+

20

245,217

12/31/13

South Korea

5

Industrial Bank of Korea

AA-

Aa3

A+

20

201,424

12/31/13

South Korea

6

Korea Development Bank

AA-

Aa3

A+

20

158,921

12/31/13

South Korea

7

Export-Import Bank of Korea (KEXIM)

AA-

Aa3

A+

20

58,181

12/31/13

South Korea

8

Bank of Taiwan*

N/R

Aa3

A+

18.5

142,745

12/31/13

Taiwan

9

Industrial and Commercial Bank of China

A

A1

A

16

3,100,051

12/31/13

China

10

China Construction Bank

A

A1

A

16

2,517,568

12/31/13

China

11

Agricultural Bank of China

A

A1

A

16

2,386,291

12/31/13

China

12

Bank of China

A

A1

A

16

2,273,581

12/31/13

China

13

Kookmin Bank

A

A1

A

16

251,335

12/31/13

South Korea

14

Shinhan Bank

A

A1

A

16

225,550

12/31/13

South Korea

15

Nonghyup Bank

A

A1

A

16

185,093

12/31/13

South Korea

  • Source for ratings: Fitch Ratings, Standard & Poor’s, Moody’s Investors Service   
  • Source for Reporting Assets: Fitch Solutions, except for * Moody’s Investors Service, and ** bank’s financial reports     
  • Ratings current as of August 14, 2014

NEXT PAGE: SAFEST EM BANKS OF MIDDLE EAST 2014


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SAFEST EM BANKS 2014 | MIDDLE EAST

Rank
Bank
Fitch
Moody’s
S&P
Total Score
Assets $mn
Statement Date
Country

1

National Bank of Abu Dhabi

AA-

Aa3

AA-

21

88,512

12/31/13

UAE

2

National Bank of Kuwait

AA-

Aa3

A+

20

65,958

12/31/13

Kuwait

3

Qatar National Bank

A+

Aa3

A+

19

121,837

12/31/13

Qatar

4

Samba Financial Group

A+

Aa3

A+

19

54,676

12/31/13

Saudi Arabia

5

National Commercial Bank

A+

A1

A+

18

100,608

12/31/13

Saudi Arabia

6

Al Rajhi Bank

A+

A1

A+

18

74,632

12/31/13

Saudi Arabia

7

Riyad Bank

A+

A1

A+

18

54,732

12/31/13

Saudi Arabia

8

Abu Dhabi Commercial Bank

A+

A1

A

17

49,869

12/31/13

UAE

9

SABB

A

Aa3

A

17

47,281

12/31/13

Saudi Arabia

10

Banque Saudi Fransi

A

Aa3

A

17

45,348

12/31/13

Saudi Arabia

11

Union National Bank

A+

A1

N/R

17

23,838

12/31/13

UAE

  • Source for ratings: Fitch Ratings, Standard & Poor’s, Moody’s Investors Service   
  • Source for Reporting Assets: Fitch Solutions, except for * Moody’s Investors Service, and ** bank’s financial reports     
  • Ratings current as of August 14, 2014

NEXT PAGE: SAFEST EM BANKS OF SUB-SAHARAN AFRICA 2014


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SAFEST EM BANKS 2014 | SUB-SAHARAN AFRICA

Rank
Bank
Fitch
Moody’s
S&P
Total Score
Reporting Assets $mn
Statement Date
Country

1

Standard Bank of South Africa

BBB

Baa1

BBB-

6

96,843

12/31/13

South Africa

2

FirstRand Bank

BBB

Baa1

BBB-

6

77,564

6/30/13

South Africa

3

Nedbank

BBB

Baa1

BBB-

6

66,650

12/31/13

South Africa

4

Investec Bank

BBB-

Baa1

BBB-

5

28,622

3/31/14

South Africa

  • Source for ratings: Fitch Ratings, Standard & Poor’s, Moody’s Investors Service   
  • Source for Reporting Assets: Fitch Solutions, except for * Moody’s Investors Service, and ** bank’s financial reports
  • Ratings current as of August 14, 2014


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