World’s Safest Banks 2016: Global Top 50

Global Finance Magazine's16th annual ranking of the World's Safest Banks illustrates howsovereign rating upgrades impact the perceived strengthof a country's financial institutions.


Rating upgrades are again driving changes in Global Finance’s ranking of the World’s 50 Safest Banks. Three new banks entered the ranking this year following rating upgrades, and several of those that were included in last year’s list have improved their position, also as a result of upgrades.

These movements continue a trend that began last year: The overall standard for inclusion in the Top 50 is getting tougher, and the ranking as a whole is being shaped not by banks’ ability to avoid downgrades—as was the case for several years after the global financial crisis—but by their ability to earn upgrades.

Two Swedish banks, Swedbank and SEB, enter the 2016 Safest 50, at 30th and 44th positions, respectively. U.S. Bancorp reenters the rankings at 41st.

Pushed out of the ranking are US bank AgFirst, Lichtenstein’s LGT Bank and Chile’s Banco del Estado, all of which have the same ratings as last year but no longer have sufficient asset size to be included. When banks have the same rating score, they are ranked in order of asset size, reflecting the strong positive correlation between high ratings and large asset size.

Last year, all banks with two AA- ratings and one of A+ (or an equivalent combination) earned a spot on the list. This year, those scores were not sufficient to guarantee inclusion, and six banks with two AA- and one A+ (or equivalent) fell short because of their smaller asset size. In addition to the three banks already mentioned that fell out of the ranking, the six included Münchener, Hypothekenbank, BBBank and TeamBank, all from Germany.

The top end of the ranking continues to be dominated by European banks that are either state-owned or enjoy some form of sponsorship from their government or regional authorities. The first nine banks in the ranking are the same as last year, although France’s Caisse des Dépôts et Consignations (CDC) and Luxembourg’s Banque et Caisse d’Epargne swapped places (with CDC now ranked ninth following a downgrade from Moody’s). Dutch lenders Bank Nederlandse Gemeenten and Nederlandse Waterschapsbank were both upgraded by S&P and now fall only one point short of the maximum score of 30.

Four banks hold three AAA ratings: KfW, Zürcher Kantonalbank, Landwirtschaftliche Rentenbank and L-Bank, with KfW again heading the ranking based on its asset size. The safest private-sector bank is TD Bank in 10th place, the same as last year. Germany’s DZ Bank and Deutsche Apotheker und Ärztebank both improved their positions following upgrades from Moody’s, rising ten places to 11th and four places to 19th. Korean banks also improved their position following upgrades from both Fitch and S&P.

The Safest Global 50 comprises 23 European banks, six from Canada, and four from Australia. China, Singapore, South Korea and the United States contribute three each. Hong Kong, New Zealand, Kuwait, Qatar and the UAE contribute one each. No Japanese bank scores highly enough to be included in the Safest 50 Global banks.

Many household names do not come close to scoring highly enough for inclusion in the Global Safest 50. The rating agencies are demonstrating that they are more comfortable with—and are willing to award higher ratings to—banks that are rooted in stable economies with developed financial markets, which have diversified businesses, both geographically and in terms of product offerings, but which are not trying to be dominant players in every market and in every area of banking.


There is significant change in the regional lists for Latin America and the Middle East. No Brazilian banks now feature in the Latin American list following rating downgrades earlier this year, and no Saudi banks feature in the Middle East list. Most Russian banks fail to score highly enough to be included in the rankings of Central and Eastern European and former Soviet banks.

To be eligible for inclusion in the Safest 50 Global Banks, banks must fall within the largest 1,000 banks in the world, ranked by assets, and they must have ratings from at least two of the three major credit-rating agencies, Fitch, Moody’s and S&P. Rating scores are based on long-term foreign currency ratings with a score of 10 being awarded for a AAA rating, nine for AA+, and so on. When a bank has only two ratings, an implied score for the third rating is calculated by taking the average score for the two ratings and deducting one point.


Methodology

BEHIND THE RANKINGS

Our ratings apply to the world’s largest 500 banks by asset size. We calculate the rankings based on the long-term foreign currency ratings issued by Fitch Ratings, Standard & Poor’s and Moody’s Investors Service. Where possible, ratings on holding companies rather than operating companies were used, and banks that are wholly owned by other banks were 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.

Fitch Ratings /
Standard & Poor’s
Moody’s
AAA Aaa
AA+ Aa1
AA Aa2
AA- Aa3
A+ A1
A A2
A- A3
global Top 50
Rank Group Name Country Ratings Total Score Assets$ mn StatementDate
Fitch Moody’s S&P
1 KfW Germany AAA Aaa AAA 30 547,603 12/31/15
2 Zürcher Kantonalbank Switzerland AAA Aaa AAA 30 155,640 12/31/15
3 Landwirtschaftliche Rentenbank Germany AAA Aaa AAA 30 101,571 12/31/15
4 L-Bank Germany AAA Aaa AAA 30 79,660 12/31/15
5 Bank Nederlandse Gemeenten (BNG) Netherlands AA+ Aaa AAA 29 162,777 12/31/15
6 Nederlandse Waterschapsbank Netherlands N/R Aaa AAA 29 91,720 6/30/15
7 NRW.BANK Germany AAA Aa1 AA- 26 151,885 12/31/15
8 Banque et Caisse d’Epargne de l’Etat Luxembourg N/R Aa2 AA+ 24.5 48,309 6/30/15
9 Caisse des Dépôts
et Consignations
France AA Aa2 AA 24 169,672 12/31/15
10 TD Bank Canada AA- Aa1 AA- 23 844,128 10/31/15
11 DZ Bank Germany AA- Aa1 AA- 23 444,574 12/31/15
12 DBS Bank Singapore AA- Aa1 AA- 23 323,819 12/31/15
13 Svenska Handelsbanken Sweden AA Aa2 AA- 23 298,803 12/31/15
14 OCBC Bank Singapore AA- Aa1 AA- 23 275,967 12/31/15
15 Korea Development Bank South Korea AA- Aa2 AA 23 263,959 12/31/15
16 United Overseas Bank Singapore AA- Aa1 AA- 23 223,503 12/31/15
17 Export-Import Bank of Korea South Korea AA- Aa2 AA 23 70,369 12/31/15
18 Banque Cantonale Vaudoise Switzerland N/R Aa2 AA 23 43,373 12/31/15
19 Deutsche Apotheker- und Ärztebank Germany AA- Aa1 AA- 23 39,678 12/31/15
20 Royal Bank of Canada Canada AA Aa3 AA- 22 821,072 10/31/15
21 Commonwealth Bank of Australia Australia AA- Aa2 AA- 22 670,798 6/30/15
22 National Australia Bank Australia AA- Aa2 AA- 22 669,507 9/30/15
23 ANZ Group Australia AA- Aa2 AA- 22 623,835 9/30/15
24 Westpac Australia AA- Aa2 AA- 22 569,335 9/30/15
25 Industrial Bank of Korea South Korea AA- Aa2 AA- 22 204,557 12/31/15
26 Société de Financement Local (SFIL) France AA- Aa3 AA 22 91,108 12/31/15
27 Pictet & Cie Switzerland AA- Aa2 N/R 21.5 34,519 12/31/14
28 Rabobank Netherlands AA- Aa2 A+ 21 729,856 12/31/15
29 Nordea Sweden AA- Aa3 AA- 21 704,266 12/31/15
30 Swedbank Sweden AA- Aa3 AA- 21 254,580 12/31/15
31 Hang Seng Bank Hong Kong A+ Aa2 AA- 21 172,173 12/31/15
32 National Bank of Abu Dhabi UAE AA- Aa3 AA- 21 110,705 12/31/15
33 AgriBank United States AA- Aa3 AA- 21 99,507 12/31/15
34 Caisse centrale Desjardins Canada AA- Aa2 A+ 21 37,458 12/31/15
35 Kiwibank New Zealand AA Aa3 A+ 21 12,514 6/30/15
36 China Development Bank China A+ Aa3 AA- 20 1,685,954 12/31/15
37 Sparkassen-Finanzgruppe (Sparkasse) Germany A+ Aa2 N/R 20 1,353,868 12/31/14
38 Scotiabank Canada AA- Aa3 A+ 20 654,664 10/31/15
39 Agricultural Development
Bank of China
China A+ Aa3 AA- 20 513,517 12/31/14
40 Bank of Montreal Canada AA- Aa3 A+ 20 490,622 10/31/15
41 U.S. Bancorp United States AA A1 A+ 20 421,853 12/31/15
42 Export-Import Bank of China China A+ Aa3 AA- 20 386,983 12/31/14
43 CIBC Canada AA- Aa3 A+ 20 354,131 10/31/15
44 SEB Sweden AA- Aa3 A+ 20 295,702 12/31/15
45 DNB Norway N/R Aa2 A+ 20 254,171 12/31/15
46 HSBC France France AA- A1 AA- 20 183,406 12/31/15
47 Qatar National Bank Qatar AA- Aa3 A+ 20 147,969 12/31/15
48 CoBank United States AA- N/R AA- 20 107,428 12/31/14
49 National Bank of Kuwait Kuwait AA- Aa3 A+ 20 77,752 12/31/15
50 OP Corporate Bank
(formerly Pohjola)
Finland N/R Aa3 AA- 20 61,062 12/31/15
TOP 10 SAFEST BANKS BY REGION
North America
Rank Group Name Country Ratings Total Score Assets$ mn StatementDate
Fitch Moody’s S&P
1 Toronto-Dominion Bank Canada AA- Aa1 AA- 23 844,128 10/31/15
2 Royal Bank of Canada Canada AA Aa3 AA- 22 821,072 10/31/15
3 Agribank United States AA- Aa3 AA- 21 99,507 12/31/15
4 Caisse centrale Desjardins Canada AA- Aa2 A+ 21 37,458 12/31/15
5 Scotiabank Canada AA- Aa3 A+ 20 654,664 10/31/15
6 Bank of Montreal Canada AA- Aa3 A+ 20 490,622 10/31/15
7 U.S. Bancorp United States AA A1 A+ 20 421,853 12/31/15
8 Canadian Imperial Bank of Commerce (CIBC) Canada AA- Aa3 A+ 20 354,131 10/31/15
9 CoBank United States AA- N/R AA- 20 107,428 12/31/14
10 Agfirst United States AA- N/R AA- 20 30,621 12/31/15
Latin America
Rank Group Name Country Ratings Total Score Assets$ mn StatementDate
Fitch Moody’s S&P
1 Banco del Estado de Chile Chile A+ Aa3 AA- 20 46,017 12/31/15
2 Banco de Chile Chile N/R Aa3 A+ 18.5 44,162 12/31/15
3 Banco Santander Chile Chile A+ Aa3 A 18 48,992 12/31/15
4 Banco de Credito e Inversiones Chile A- A1 A 15 40,683 12/31/15
5 BBVA Bancomer Mexico A- A3 BBB+ 11 98,575 12/31/15
6 Scotiabank Perú Peru A- A3 BBB+ 11 17,621 12/31/15
7 Banobras Mexico BBB+ A3 BBB+ 10 37,319 12/31/15
8 HSBC Mexico Mexico A Baa2 BBB+ 10 32,557 12/31/15
9 Nacional Financiera Mexico BBB+ A3 BBB+ 10 22,365 12/31/15
10 Banco Nacional de Comercio Exterior Mexico BBB+ A3 BBB+ 10 18,659 12/31/15
CENTRAL, EASTERN EUROPE AND FSU
Rank Group Name Country Ratings Total Score Assets$ mn StatementDate
Fitch Moody’s S&P
1 Komerční banka Czech Republic A- A2 A 14 35,915 12/31/15
2 Česká spořitelna Czech Republic A- A2 A- 13 38,655 12/31/15
3 ING Bank Śląski Poland A A3 N/R 12.5 27,913 12/31/15
4 Bank Pekao Poland A- A2 BBB+ 12 43,266 12/31/15
5 Bank Zachodni WBK Poland BBB+ A3 N/R 9.5 35,813 12/31/15
6 Bank Handlowy w Warszawie Poland A- A3 N/R 8 12,690 12/31/15
7 mBank Poland BBB Baa2 BBB 6 31,664 31-Dec-15
8 BRD – Groupe Société Générale Romania BBB+ Ba1 N/R 3 12,099 12/31/15
9 Banca Comercială Română Romania BBB Ba1 N/R 0.5 15,035 31-Dec-15
10 Vnesheconombank Russia BBB- Ba1 BB+ -1 60,130 31-Dec-15
Asia
Rank Group Name Country Ratings Total Score Assets$ mn StatementDate
Fitch Moody’s S&P
1 DBS Bank Singapore AA- Aa1 AA- 23 323,819 12/31/15
2 OCBC Bank Singapore AA- Aa1 AA- 23 275,967 12/31/15
3 Korea Development Bank South Korea AA- Aa2 AA 23 263,959 12/31/15
4 United Overseas Bank Singapore AA- Aa1 AA- 23 223,503 12/31/15
5 Export-Import Bank of Korea South Korea AA- Aa2 AA 23 70,369 12/31/15
6 Industrial Bank of Korea South Korea AA- Aa2 AA- 22 204,557 12/31/15
7 Hang Seng Bank Hong Kong A+ Aa2 AA- 21 172,173 12/31/15
8 China Development Bank China A+ Aa3 AA- 20 1,685,954 12/31/15
9 Agricultural Development
Bank of China
China A+ Aa3 AA- 20 513,517 12/31/14
10 Export-Import Bank of China China A+ Aa3 AA- 20 386,983 12/31/14
AustralAsia
Rank Group Name Country Ratings Total Score Assets$ mn StatementDate
Fitch Moody’s S&P
1 Commonwealth Bank of Australia Australia AA- Aa2 AA- 22 670,798 6/30/15
2 National Australia Bank Australia AA- Aa2 AA- 22 669,507 9/30/15
3 ANZ Group Australia AA- Aa2 AA- 22 623,835 9/30/15
4 Westpac Australia AA- Aa2 AA- 22 569,335 9/30/15
5 Kiwibank New Zealand AA Aa3 A+ 21 12,514 6/30/15
6 Suncorp Metway Australia A+ A1 A+ 18 47,393 6/30/15
7 AMP Bank Australia N/R A2 A+ 15.5 12,603 12/31/15
8 Bendigo and Adelaide Bank Australia A- A2 A- 13 50,709 6/30/15
9 Bank of Queensland Australia A- A3 A- 12 34,328 8/31/15
10 Macquarie Group Australia A- A3 BBB 10 150,655 3/31/16

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