Safest Emerging Markets Banks 2015

Financial institutions from two regions dominate the ranking of the 50 Safest Emerging Markets Banks.


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THE SOVEREIGN CEILING


A quick glance at the chart listing the Safest Emerging Markets Banks might give the impression that financial institutions outside of Asia or the Middle East were excluded from consideration. All told, banks based in Gulf Cooperation Council countries (Saudi Arabia, Kuwait, Bahrain, Oman, Qatar, UAE) and Asian nations account for 44 of the 50 spots. Banks in the GCC region alone constitute close to half the list, with 23 entries.

The trend of regional and national concentration of safest banks goes on. Five out of the 10 countries represented on the list are GCC members. Three Asian nations—China, South Korea and Taiwan—account for 19 banks in the ranking. Chile and the Czech Republic are the only other countries to contribute any banks to the Safest 50.

The Middle East and Asia dominated last year’s Safest Emerging Markets Banks ranking as well. The reality is, many large banking systems in emerging markets, such as those in Brazil, India, Russia and Turkey, do not come close to having financial institutions that are rated highly enough to break into the Top 50. The reason? The low sovereign credit ratings assigned to the countries. Granted, the big-three credit rating agencies—Fitch, Moody’s and Standard & Poor’s—are now taking a more nuanced approach to the relationship between the rating of a country and the ratings of banks in that country. But in practice, a bank’s rating cannot exceed its country’s sovereign rating.

That’s not a problem for financial institutions in emerging markets in the Middle East, where country ratings are generally investment-grade. For the third year in a row, National Bank of Abu Dhabi is the World’s Safest Emerging Markets Bank. The company remains the only emerging markets bank to hold three AA- ratings. National Bank of Abu Dhabi also sits at number 29 in Global Finance’s overall ranking of the 50 Safest Global Banks.

Not surprisingly, no emerging markets financial services company holds a rating higher than AA-.

Out of the GCC countries, Saudi Arabia has a total of nine commercial banks in the top 50. The United Arab Emirates contributes six entries—five from the Emirate of Abu Dhabi and one from the Emirate of Dubai. Four banks from Qatar qualified, three from Kuwait and one from Oman. No bank from Bahrain made the cut.

Two new banks broke into the top 50 this year. Qatar Islamic Bank enters at number 44, and Kuwait’s Gulf Bank claims the 49th spot in the ranking.

Banks from Qatar made a big move up the rankings, thanks to credit rating upgrades by Fitch. The company hiked its ratings for seven Qatari banks in March, having reassessed the likelihood that they would be supported by the government of Qatar, which has an AA rating. As a result, Qatar National Bank rises four places to 7th, Commercial Bank of Qatar moves up eight spots to 30th, and Doha Bank climbs eight places to 39th.

In Asia, nine Korean banks scored high enough to be included in the ranking. China has eight entries and Taiwan, four.


Four financial services companies from Latin America cracked the list—all from Chile. The highest-scoring bank from the country is BancoEstado, which garners 20 points, putting it at number 10. Banco de Chile is three spots below that.

Besides Chile, the Czech Republic is the only other non-Asian or non-Middle Eastern nation to contribute banks to the 50 Safest Emerging Markets ranking. Komerční banka grabs the number 43 spot. Rival Česká spořitelna sits in 47th place.

Banks from Qatar made a big move up the rankings, thanks to credit rating upgrades by Fitch.

THE DROPOUTS

One A rating and two of A- (scoring a total of 13 points) were sufficient to ensure inclusion in this year’s ranking of the World’s Safest Emerging Markets Banks, which was the same criteria used in last year’s rankings. Emirates NBD claims the 50th spot with a score of 12.5. Three other banks, all based in Asia, scored 12.5 points, but didn’t make the top 50 because of their asset size. The trio: Cathay United Bank and Taipei Fubon Bank, both from Taiwan, along with Suhyup Bank from South Korea. Korea Finance Corporation merged with Korea Development Bank in December and so no longer exists as a separate institution.

METHODOLOGY | HOW WE MEASURE THE SAFETY OF BANKS

The safest banks chart is compiled by comparing 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 rather than operating companies were used, 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.

Top 50 Safest Emerging Markets Banks 2015
Rank Bank Fitch Moody’s S&P Total Score Reporting Assets $mn Country
1 National Bank of Abu Dhabi AA- Aa3 AA- 21 102,409 UAE
2 China Development Bank A+ Aa3 AA- 20 1,685,954 China
3 Agricultural Development Bank of China A+ A1 AA- 20 513,517 China
4 Export-Import Bank of China A+ Aa3 AA- 20 386,953 China
5 Korea Development Bank AA- Aa3 A+ 20 252,231 South Korea
6 Industrial Bank of Korea AA- Aa3 A+ 20 199,910 South Korea
7 Qatar National Bank AA- Aa3 A+ 20 133,614 Qatar
8 National Bank of Kuwait AA- Aa3 A+ 20 74,399 Kuwait
9 Export-Import Bank of Korea AA- Aa3 A+ 20 66,952 South Korea
10 BancoEstado A+ Aa3 AA- 20 46,291 Chile
11 Samba Financial Group A+ Aa3 A+ 19 57,973 Saudi Arabia
12 Bank of Taiwan N/R Aa3 A+ 18.5 146,756 Taiwan
13 Banco de Chile N/R Aa3 A+ 18.5 45,517 Chile
14 National Commercial Bank A+ A1 A+ 18 115,967 Saudi Arabia
15 Al Rajhi Bank A+ A1 A+ 18 82,056 Saudi Arabia
16 Riyad Bank A+ A1 A+ 18 57,224 Saudi Arabia
17 Banco Santander Chile A+ Aa3 A 18 50,272 Chile
18 Shinhan Bank A Aa3 A 17 232,554 South Korea
19 Abu Dhabi Commercial Bank A+ A1 A 17 55,553 UAE
20 Banque Saudi Fransi A Aa3 A 17 50,341 Saudi Arabia
21 SABB A Aa3 A 17 50,029 Saudi Arabia
22 Union National Bank A+ A1 N/R 17 25,449 UAE
23 Industrial and Commercial Bank of China A A1 A 16 3,368,190 China
24 China Construction Bank A A1 A 16 2,736,416 China
25 Agricultural Bank of China A A1 A 16 2,610,582 China
26 Bank of China A A1 A 16 2,492,463 China
27 Kookmin Bank A A1 A 16 250,572 South Korea
28 Kuwait Finance House A+ A1 A- 16 58,681 Kuwait
29 Arab National Bank A A1 A 16 43,912 Saudi Arabia
30 Commercial Bank of Qatar A+ A1 A- 16 31,773 Qatar
31 Land Bank of Taiwan N/R Aa3 A- 15.5 83,876 Taiwan
32 FGB A+ A2 N/R 15.5 57,772 UAE
33 Abu Dhabi Islamic Bank A+ A2 N/R 15.5 30,471 UAE
34 Nonghyup Bank A- A1 A 15 192,531 South Korea
35 Hana Financial Group A- A+ A 15 156,877 South Korea
36 Korea Exchange Bank A- A1 A 15 102,192 South Korea
37 Mega International Commercial Bank A- A1 A 15 99,167 Taiwan
38 Banco de Crédito e Inversiones A- A1 A 15 39,297 Chile
39 Doha Bank A+ A2 A- 15 20,747 Qatar
40 Bank of Communications A A2 A- 14 1,024,399 China
41 Woori Bank A- A1 A- 14 245,754 South Korea
42 CTBC Bank A A2 A- 14 107,839 Taiwan
43 Komerční banka A- A2 A 14 41,747 Czech Republic
44 Qatar Islamic Bank A+ N/R A- 14 26,403 Qatar
45 Saudi Hollandi A- A1 N/R 14 25,765 Saudi Arabia
46 Bank Muscat A- A1 N/R 14 25,301 Oman
47 Česká spořitelna A- A2 A- 13 39,528 Czech Republic
48 Saudi Investment Bank A- A2 A- 13 24,967 Saudi Arabia
49 Gulf Bank A+ Baa1 A- 13 18,207 Kuwait
50 Emirates NBD A+ Baa1 N/R 12.5 98,848 UAE
 STATEMENT DATE AS OF 12/31/14

 SAFEST BANKS IN EMERGING MARKETS BY REGION

Central & Eastern Europe
Rank Bank Fitch Moody’s S&P Total Score Reporting Assets $mn Country
1 Komerční banka A- A2 A 14 41,747 Czech Republic
2 Česká spořitelna A- A2 A- 13 39,528 Czech Republic
3 Bank Pekao A- A2 BBB+ 12 47,795 Poland
4 PKO Bank Polski N/R A2 BBB+ 11 70,911 Poland
5 ING Bank Śląski A- A3 N/R 11 28,473 Poland
6 Bank Zachodni WBK BBB+ A3 N/R 9.5 38,350 Poland
7 mBank BBB- Baa2 BBB 5 33,641 Poland
8 Banca Comercială Română BBB Ba1 N/R 0.5 16,715 Romania
STATEMENT DATE AS OF 12/31/14
Latin America
Rank Bank Fitch Moody’s S&P Total Score Reporting Assets $mn Country
1 BancoEstado A+ Aa3 AA- 20 46,291 Chile
2 Banco de Chile N/R Aa3 A+ 18.5 45,517 Chile
3 Banco Santander Chile A+ Aa3 A 18 50,272 Chile
4 Banco de Crédito e Inversiones A- A1 A 15 39,297 Chile
5 HSBC México A A3 BBB+ 12 40,444 Mexico
6 Scotiabank Perú A- A3 BBB+ 11 15,742 Peru
7 Banobras BBB+ A3 BBB+ 10 38,871 Mexico
8 Banco de Crédito PCB A- Baa1 BBB+ 10 38,744 Peru
9 Bancomext BBB+ A3 BBB+ 10 17,877 Mexico
10 Banco Santander Mexico BBB+ A3 N/R 9.5 63,639 Mexico
STATEMENT DATE AS OF 12/31/14
Asia
Rank Bank Fitch Moody’s S&P Total Score Reporting Assets $mn Country
1 China Development Bank A+ Aa3 AA- 20 1,685,954 China
2 Agricultural Development Bank of China A+ Aa3 AA- 20 513,517 China
3 Export-Import Bank of China A+ Aa3 AA- 20 386,953 China
4 Korea Development Bank AA- Aa3 A+ 20 252,231 South Korea
5 Industrial Bank of Korea AA- Aa3 A+ 20 199,910 South Korea
6 Export-Import Bank of Korea AA- Aa3 A+ 20 66,952 South Korea
7 Bank of Taiwan N/R Aa3 A+ 18.5 146,756 Taiwan
8 Shinhan Bank A Aa3 A 17 232,554 South Korea
9 Industrial and Commercial Bank of China A A1 A 16 3,368,190 China
10 China Construction Bank A A1 A 16 2,736,416 China
11 Agricultural Bank of China A A1 A 16 2,610,582 China
12 Bank of China A A1 A 16 2,492,463 China
13 Kookmin Bank A A1 A 16 250,572 South Korea
14 Land Bank of Taiwan N/R Aa3 A- 15.5 83,876 Taiwan
15 Nonghyup Financial Group A- A1 A 15 192,531 South Korea
  STATEMENT DATE AS OF 12/31/14
Middle East
Rank Bank Fitch Moody’s S&P Total Score Reporting Assets $mnMerge Cells Country
1 National Bank of Abu Dhabi AA- Aa3 AA- 21 102,409 UAE
2 Qatar National Bank AA- Aa3 A+ 20 133,614 Qatar
3 National Bank of Kuwait AA- Aa3 A+ 20 74,399 Kuwait
4 Samba Financial Group A+ Aa3 A+ 19 57,973 Saudi Arabia
5 National Commercial Bank A+ A1 A+ 18 115,967 Saudi Arabia
6 Al Rajhi Bank A+ A1 A+ 18 82,056 Saudi Arabia
7 Riyad Bank A+ A1 A+ 18 57,224 Saudi Arabia
8 Abu Dhabi Commercial Bank A+ A1 A 17 55,553 UAE
9 Banque Saudi Fransi A Aa3 A 17 50,341 Saudi Arabia
10 SABB A Aa3 A 17 50,029 Saudi Arabia
  STATEMENT DATE AS OF 12/31/14
Sub-Saharan Africa
Rank Bank Fitch Moody’s S&P Total Score Reporting Assets $mn Statement Date Country
1 Standard Bank BBB Baa2 BBB- 5 97,674 12/31/14 South Africa
2 FirstRand Bank BBB Baa2 BBB- 5 80,283 6/30/14 South Africa
3 Nedbank BBB Baa2 BBB- 5 65,128 12/31/14 South Africa
4 Investec Bank BBB- Baa2 BBB- 4 27,323 3/31/15 South Africa
Source for ratings: Fitch Ratings, Standard & Poor’s, Moody’s Investors Service
Source for Reporting Assets: Fitch Solutions

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