World’s Safest Banks 2016: A Retrospective

Ten years ago, Global Finance’s ranking of the world’s safest banks included such household names as Citigroup, Royal Bank of Scotland, Deutsche Bank and the Spanish giants, Santander and BBVA.

None of these now feature in the Safest 50—indeed, several would fail to reach the Safest 100.

A comparison of the safest 50 global banks in 2006 with those of 2016 illuminates not only the devastation wrought by the global financial crisis of 2008 and the European sovereign and banking crises that followed it, but also the changing attitudes of the rating agencies as to what constitutes a “safe” bank.

Of the 50 safest banks that appeared in 2006, only 16 appear in this year’s ranking. Eight of those that have fallen out would now rank between 51st and 100th. These include Wells Fargo (10th in 2006), BNP Paribas (15th) and ABN Amro (39th). Many others fall far short of the top 100, while others have been acquired and folded into other banks. Crédit Lyonnais, now controlled by Crédit Agricole, was ranked 29th in 2006. Fortis, ranked 41st in 2006, now falls largely under the umbrella of BNP Paribas. Wachovia (42nd in 2006) has been acquired by Wells Fargo.

In 2006, Depfa Bank ranked 46th. Now it is in wind-down, running off its assets.

But many banks have stood the test of time. Royal Bank of Canada, 26th in 2006, ranks 20th this year. National Australia Bank and Commonwealth Bank of Australia ranked 32nd and 33rd; this year they rank 22nd and 21st, respectively.

Rabobank was rated the third-safest bank in the world in 2006, with two AAA ratings and one of AA+. Today the bank has ratings of AA, AA- and A+, but hangs on at 28th.

The safest bank in the world in 2006 was France’s Caisse des Dépôts et Consignations, with three AAA ratings. Second-placed Bank Nederlandse Gemeenten also had three AAA ratings. KfW was in fourth place with AAA ratings from Moody’s and S&P but no rating from Fitch. This year, CDC ranks ninth, with three AA ratings, and BNG is fifth. Some banks from the 2006 list have appeared in recent years, just not this year.

The survivors from 2006 tend to fall into one of two categories: state-owned or state-sponsored banks in countries that have been able to maintain very high ratings even through the European sovereign and banking crisis, or banks that have stable and secure business franchises and are based in countries, such as Canada and Australia, that have advanced economies and well-developed financial markets.

WINNERS FOR FIVE YEARS STRAIGHT

In contrast to the significant changes that have been seen in the Safest 50 rankings over the past 10 years, a relative consistency has characterized the past five years’ rankings.

Over the past five years, 68 different banks have appeared in the Safest 50 Global Banks ranking. Thirty-three have appeared in each of those years: 14 European banks, six from Canada, four from Australia, three from Singapore and from the GCC, two from China and one from the US.

KfW has topped the list every year. The best-performing private-sector bank has been TD Bank, which has been ranked 11th in three of the years and 10th in two. The three large Singaporean banks, DBS, Oversea-Chinese and United Overseas, are the next-best performers over the five years, after Toronto Dominion Bank.

CoBank is the only US bank to have appeared in all five years. U.S. Bancorp and AgriBank have appeared in four of the five years.