Best Banks In The World 2019: Banking Transformed

With its annual World’s Best Bank awards, Global Finance honors financial institutions that stand out in the qualities that corporations look for when choosing a bank. The winners are not necessarily the biggest banks, but rather, the best.

One common theme among many of this year’s winners is that they have taken the lead in adopting the latest banking technology to transform their institutions into banks of the future. They have expanded their digital and mobile channels and closed some of their brick-and-mortar branches.

“There’s a new kind of promise in the banking industry—and possibly no better time than now for transformation,” Deloitte says in its 2019 banking industry outlook. “Economic fundamentals are strong, the regulatory climate is favorable, and transformation technologies are more readily accessible, powerful and economical than ever before.”

Global corporate lending is growing in the US and Asia, although Europe remains in the doldrums. Competition for corporate loans is expected to intensify in 2019, along with further easing of credit underwriting standards in the first half of this year, Deloitte’s report says. “But given the higher likelihood of a downturn in the next several years, banks should adjust their risk appetite accordingly,” it adds. “To alleviate this risk, banks should strengthen their specialized lending expertise, which if executed well can result in a superior ability to screen, value collateral, structure loans to minimize potential losses and manage the workout of problem loans.”

The banking industry is on more solid ground today than when the global financial crisis hit more than a decade ago. There are, however, some signs of excess. Terms for leveraged loans have become more borrower-friendly, causing the leveraged loan market to surpass $1 trillion, rivaling the size of the high-yield market. No one knows what will happen if the economy tanks and these risky loans cannot be repaid.

Prudent lending standards were one factor Global Finance took into account when selecting the World’s Best Banks. All selections were made by the editors of Global Finance after extensive consultations with corporate financial executives, bankers and banking consultants, and analysts throughout the world. Banks were invited to submit entries supporting their selection. Our criteria included growth in assets, profitability, strategic relationships, customer service, competitive pricing and innovative products/solutions. In addition, a poll of Global Finance’s corporate readership was conducted in order to increase the accuracy and reliability of the results.    

Methodology

Global Finance editors, with input from industry analysts, corporate executives and technology experts, selected the winners for the Best Bank Awards using entries provided by banks and other providers, as well as independent research, based on a series of objective and subjective factors. It is not necessary to enter in order to win, but experience shows that the additional information supplied in an entry can increase the chance of success. In many cases, entrants are able to present details and insights that may not be readily available to the editors of Global Finance.

Judgements were based on performance over the period from January 1, 2018 to December 31, 2018. We applied an algorithm to shorten the list of contenders and arrived at a numerical score, with 100 equivalent to perfection. The proprietary algorithm includes criteria—such as knowledge of local conditions and customer needs, financial strength and safety, strategic relationships and governance, competitive pricing, capital investment and innovation in products and services—weighted for relative importance.

Once we have narrowed the field, our final criteria include scope of global coverage, size of staff, customer service, risk management, range of products and services, execution skills and smart use of technology. In the case of a tie, our bias leans toward a local provider rather than a global institution. We also tend to favor privately owned banks over government-owned institutions. The winners are those banks and providers that best serve the specialized needs of corporations as they engage in global business. The winners are not always the biggest institutions, but rather the best—those with qualities that companies should look for when choosing a provider.