Digging Deep

Author: Andrew Cunningham

Global Finance’s country-by-country ranking provides an objective and transparent listing of the safest banks worldwide.

Global Finance’s first-ever country-by-county ranking of the safest banks in the world comprises banks from 104 countries, the vast majority of which are in emerging markets. Many hold credit ratings deep in sub-investment-grade territory.

Although some aspects of the methodology used to calculate the safest bank in each country differ from the methodology used for the Safest Global, Safest Emerging Markets and Safest Commercial Bank rankings, the principles remain the same. Banks are ranked based on long-term foreign currency ratings publicly assigned by Fitch, Moody’s and S&P. As such, the country rankings retain the objectivity and transparency that characterizes Global Finance’s other “Safest” rankings.

To be eligible for inclusion in the country-by-country list, banks must be among the biggest 1,000 banks in the world, ranked by assets. In contrast, the size requirement for the other three “Safest” lists is that a bank must be among the biggest 500. Furthermore, banks need have a rating from only one, not two, of the three major rating agencies to be eligible for inclusion in the country-by-country list. When a bank has only one rating, it is given an implied second rating one notch below the actual rating, and an implied third rating one notch below the second rating. A negative score reflects one or more ratings which are below investment grade. As with the other “Safest” rankings, banks that are 100% subsidiaries of other banks are not eligible for inclusion, but there is no exclusion for banks owned by governments or government agencies.

Global Finance has introduced the country-by-country rankings to provide insight into banks in the large number of countries that do not feature in its Safest 50 rankings. For example, India, Indonesia, Turkey and Nigeria rank among the world’s biggest economies and have large banking systems, but none of their banks scores highly enough to be ranked among the 50 Safest Emerging Markets Banks or even among the emerging markets regional lists.

As with Global Finance other listings, banks that hold the same ratings are ranked on the basis of asset size, reflecting the strong positive correlation between large asset size and high ratings. In low-rated countries, banks often have the same ratings because they are constrained by the low sovereign rating assigned to their home country.

For example, several Indian banks hold ratings of BBB- from Fitch, Baa3 from Moody’s and BBB- from S&P—the highest ratings those agencies assign in the country—so State Bank of India is ranked first on the basis of its asset size.

In Indonesia, Bank Mandiri and Bank Rakyat Indonesia share the same ratings (BBB-, Baa3, BB+), but Mandiri gains precedence based on size. However, these are the only two banks with those ratings—others are either rated lower or are unrated by one of the agencies.

In Nigeria, First Bank of Nigeria, Zenith Bank and Guaranty Bank share B+ ratings from Fitch and BB- ratings from S&P, so First Bank is ranked first, based on asset size. (Moody’s rates no banks in Nigeria.) In the Philippines, Metrobank takes precedence over the smaller Bank of the Philippine Islands, but the ratings of these two banks (BBB- from Fitch and Baa3 from Moody’s) exceed those of all other rated Filipino banks.


Despite the constraints of low sovereign ceilings, in many of the major economies there is a clear winner that holds ratings higher than its peers, even if such ratings are very low. Banco Macro leads Argentina’s banks, with a CCC from Fitch and a Caa2 from Moody’s, beating the larger Banco de Galicia y Buenos Aires, which holds the same Caa2 from Moody’s but a CCC- from S&P and no rating from Fitch.

Maybank, with three A- ratings, ranks ahead of its rivals, regardless of asset size (although it is by far the biggest bank in Malaysia). CIMB and Public Bank (Malaysia) have only two A- ratings.

Perhaps the most striking feature of the country-by-country rankings is the small number of banks rated in sub-Saharan Africa.

Apart from South Africa, whose banks feature in the regional lists for both the Safest Global and the Safest Emerging Markets, only four sub-Saharan countries have banks rated by any of the three major credit-rating agencies.

Fitch and S&P each rate 10 Nigerian banks, though not exactly the same 10, so 14 Nigerian banks have a rating from one or both of the agencies. But beyond South Africa and Nigeria, the world’s three international rating agencies can boast only four bank ratings between them in sub-Saharan Africa. Angola’s Banco Angolano de Investimentos has ratings from Fitch and Moody’s, Ghana’s GCB Bank is rated by Moody’s, and Ecobank Togo is rated by Fitch. n


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