The key factor shaking up the rankings this year is the tightening of regulatory oversight worldwide.

Author: David Sanders

European banks continue to dominate our Safest Bank ratings, while this year Canadian banks crept higher in the ranking due to a sovereign upgrade. But the big driver of bank security in the new era has been regulation. Although banks have benefitted from sustained worldwide economic growth in recent years, the financial profile of many institutions improved as a direct result of the heightened regulatory environment post-financial crisis. Rules now require higher levels of bank liquidity and capitalization, with generally improving trends in asset quality across many developed markets.

Still, major challenges may arise from the planned shift to more restrictive monetary policy, potentially damaging trade wars, Brexit disruption and persistent geopolitical tensions. In this considerable uncertainty, the Global Finance annual rankings of the World’s Safest Banks provide an important measure of clarity.

The World's Safest Banks 2018 

Regulatory changes have been a catalyst for bank restructuring, and since our last ranking there have been a number of significant new mandates. Notably, the finalization of Basel III (designed to strengthen capital requirements and reduce bank leverage), the adoption of IFRS 9 (to harmonize definitions and accounting principles around financial instruments) and the implementation of recovery and resolution plans are global in scope.

Banks must address additional mandates related to consumer privacy under Europe’s General Data Protection Regulation (GDPR), and securities-trading transparency and investor protection under the revised EU Markets in Financial Instruments Directive (MiFID II). In November, the European Banking Authority released the results of its latest stress test (which applies to 70% of EU banking sector assets), detailing the capital impact of a set of adverse assumptions. The Bank of England has imposed ring-fence requirements to separate retail and consumer business from wholesale and markets-related banking. UK banks must also issue additional subordinated liabilities up to a minimum buffer requirement to protect senior creditors.

Meanwhile, in the US, elements of Dodd-Frank have eased; this mainly impacts regional and community banks. Going forward, the refinement of capital and liquidity requirements, compliance with stress tests, and ensuring robust recovery and resolution plans will continue to underpin regulatory oversight. Such mandates ultimately contribute to the resilience of the sector.

After the 2008 crisis, central banks injected significant liquidity into the financial system through highly accommodative monetary policy (quantitative easing), hiking the threat of asset bubbles and inflation. This stance has shifted. The US Federal Reserve is now well into a tightening phase; its European counterpart is expected to follow, possibly in mid-2019. While rising rates in some regions could benefit banks’ net interest margins, innovation is needed to maintain profitability. Fintech has brought fresh competition in finance, and banks must develop or acquire robust online platforms to grow their consumer business.

In this era of heightened scrutiny, with the prospect of rising interest rates that may pressure economic growth, the sector faces additional challenges. Achieving earnings growth will be particularly daunting given the considerable costs related to regulatory compliance, new technology investment and maintaining legacy systems. Moreover, robust risk management is critical to manage global risks, ensure data security and prevent cyber threats. Banks must continue to identify cost efficiencies while focusing on revenue initiatives.

We apply a straightforward approach to ranking the World’s Safest Banks, using long-term foreign-currency debt ratings from the three major international rating agencies. (Details p. 19)

Overall, the Global Top 50 banks include institutions that exhibit considerable stability. As a result, scores remain in a narrow range. The score for inclusion among the Global Top 50 was relatively unchanged at 18.5 points (versus 19 in 2017) out of a top score of 30.

As in the past, sovereign-rating changes can have a large impact on movements year-over-year. For example, the Canadian banks rose in our 2018 rankings due to an upgrade by Moody’s in July 2018 following Canada’s adoption of new bank resolution regulations. The upgrades boosted the rankings for Toronto-Dominion (11th), Royal Bank of Canada (12th), The Bank of Nova Scotia (27th), Bank of Montreal (32nd) and Canadian Imperial Bank of Commerce (33rd and a new entrant).

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. All ratings in the tables were valid as of August 17, 2018.

WORLD'S SAFEST BANKS 2018 — The Global Top 50

Rank

Company Name

Country

Fitch

Moody’s

S&P

Total Score

Assets ($ Mil.)

Statement Date

1

KfW

Germany

AAA

Aaa

AAA

30

566,486

31-Dec-2017

2

Zuercher Kantonalbank

Switzerland

AAA

Aaa

AAA

30

167,945

31-Dec-2017

3

Landwirtschaftliche Retenbank

Germany

AAA

Aaa

AAA

30

108,711

31-Dec-2017

4

L-Bank

Germany

AAA

Aaa

AAA

30

84,640

31-Dec-2017

5

BNG Bank N.V.

Netherlands

AA+

Aaa

AAA

29

167,932

31-Dec-2017

6

Nederlandse Waterschapsbank

Netherlands

NR

Aaa

AAA

29

101,924

30-Jun-2017

7

Kommunalbanken

Norway

NR

Aaa

AAA

29

47,738

31-Dec-2017

8

NRW.BANK

Germany

AAA

Aa1

AA—

26

175,242

31-Dec-2017

9

Banque et Caisse d'Epargne de L'Etat

Luxembourg

NR

Aa2

AA+

24.5

54,305

31-Dec-2017

10

Caisse des Depots et Consignations

France

AA

Aa2

AA

24

207,623

31-Dec-2017

11

The Toronto-Dominion Bank

Canada

AA—

Aa1

AA—

23

1,012,760

30-Apr-2018

12

Royal Bank of Canada

Canada

AA

Aa2

AA—

23

940,707

31-Oct-2017

13

DZ BANK

Germany

AA—

Aa1

AA—

23

606,359

31-Dec-2017

14

DBS Bank

Singapore

AA—

Aa1

AA—

23

387,337

31-Dec-2017

15

Ocersea-Chinese Banking Corporation

Singapore

AA—

Aa1

AA—

23

340,370

31-Dec-2017

16

Svenska Handelsbanken

Sweden

AA

Aa2

AA—

23

336,116

31-Dec-2017

17

United Overseas Bank

Singapore

AA—

Aa1

AA—

23

268,287

31-Dec-2017

18

Korea Development Bank

South Korea

AA—

Aa2

AA

23

246,231

31-Dec-2017

19

The Export-Import Bank of Korea

South Korea

AA—

Aa2

AA

23

78,826

31-Dec-2017

20

Deutsche Apotheker- und Aerztebank

Germany

AA—

Aa1

AA—

23

49,583

31-Dec-2017

21

Banque Cantonale Vaudoise

Switzerland

NR

Aa2

AA

23

46,602

31-Dec-2017

22

Swedbank

Sweden

AA—

Aa2

AA—

22

268,778

31-Dec-2017

23

Industrial Bank of Korea

South Korea

AA—

Aa2

AA—

22

255,805

31-Dec-2017

24

SFIL

France

AA—

Aa3

AA

22

71,010

31-Dec-2017

25

Banque Pictet & Cie

France

AA—

Aa2

NR

21.5

29,711

31-Dec-2017

26

Commonwealth Bank of Australia

Australia 

AA—

Aa3

AA—

21

734,723

31-Dec-2017

27

The Bank of Nova Scotia

Canada

AA—

Aa2

A+

21

709,899

31-Oct-2017

28

ANZ Group 

Australia

AA—

Aa3

AA—

21

703,415

30-Sep-2017

29

Nordea Bank

Sweden

AA—

Aa3

AA—

21

697,527

31-Dec-2017

30

Westpac Banking Corporation

Australia

AA—

Aa3

AA—

21

667,786

30-Sep-2017

31

National Australia Bank

Australia

AA—

Aa3

AA—

21

617,969

30-Sept-2017

32

Bank of Montreal

Canada

AA—

Aa2

A+

21

550,361

31-Oct-2017

33

Canadian Imperial Bank of Commerce

Canada

AA—

Aa2

A+

21

438,427

31-Oct-2017

34

SEB

Sweden

AA—

Aa2

A+

21

310,925

31-Dec-2017

35

HSBC France

France

AA—

Aa3

AA—

21

200,935

31-Dec-2017

36

First Abu Dhabi Bank

UAE

AA—

Aa3

AA—

21

182,156

31-Dec-2017

37

Federation des Caisses Desjardins

Canada

AA—

Aa2

A+

21

115,943

31-Dec-2017

38

AgriBank

United States

AA—

Aa3

AA—

21

104,500

31-Dec-2017

39

Sparkassen-Finanzgruppe (Sparkassen)

Germany

A+

Aa2

NR

20

1,235,669

31-Dec-2017

40

UBS

Switzerland

AA—

Aa3

A+

20

939,089

31-Dec-2017

41

Rabobank

Netherlands

AA—

Aa3

A+

20

723,167

31-Dec-2017

42

DNB Bank

Norway

NR

Aa2

A+

20

326,832

31-Dec-2017

43

Hang Seng Bank

Hong Kong

A+

Aa3

AA—

20

189,201

31-Dec-2017

44

CoBank

United States

AA—

NR

AA—

20

129,211

31-Dec-2017

45

National Bank of Kuwait

Kuwait

AA—

Aa3

A+

20

86,279

31-Dec-2017

46

OG Corporate Bank

Finland

NR

Aa3

AA—

20

165,621

31-Dec-2017

47

AgFirst

United States

AA—

Aa3

NR

20

37,811

31-Dec-2017

48

Farm Credit Bank of Texas

United States

AA—

Aa3

NR

20

22,837

31-Dec-2017

49

U.S. Bancorp

United States

AA—

A1

A+

19

462,040

31-Dec-2017

50

Bank of Taiwan

Taiwan

NR

Aa3

A+

18.5

165,621

31-Dec-2017


Top 10 Safest Banks by Region — North America

Rank

Company Name

Country

Fitch

Moody’s

S&P

Total Score

Assets ($ Mil.)

Statement Date

1

TD Bank

Canada

AA—

Aa1

AA—

23

1,012,760

30-Apr-2018

2

Royal Bank of Canada

Canada

AA

Aa2

AA—

23

940,707

31-Oct-2017

3

The Bank of Nova Scotia

Canada

AA

Aa2

AA—

21

709,899

31-Oct-2017

4

Bank of Montreal

Canada

AA—

Aa2

A+

21

550,361

31-Oct-2017

5

Canadian Imperial Bank of Commerce

Canada

AA—

Aa2

A+

21

438,437

31-Oct-2017

6

Federation des Caisses Desjardins

Canada

AA—

Aa2

A+

21

115,943

31-Dec-2017

7

AgriBank

United States

AA—

Aa3

AA—

21

104,500

31-Dec-2017

8

CoBank

United States

AA—

NR

AA—

20

129,211

31-Dec-2017

9

AgFirst

United States

AA—

Aa3

NR

20

37,811

31-Dec-2017

10

Farm Credit Bank of Texas

United States

AA—

Aa3

NR

20

22,837

31-Dec-2017


Top 10 Safest Banks by Region — Latin America

Rank

Company Name

Country

Fitch

Moody’s

S&P

Total Score

Assets ($ Mil.)

Statement Date

1

Banco del Estamdo de Chile

Chile

A

A1

A+

17

61,588

31-Dec-2017

2

Banco Santander Chile

Chile

A

A1

A

16

58,229

31-Dec-2017

3

Banco de Chile

Chile

NR

A1

A

16

53,374

31-Dec-2017

4

Banco de Credotp e Onversiones

Chile

A

A2

A

15

55,075

31-Dec-2017

5

HSBC Mexico

Mexico

A

Baa1

BBB+

11

36,028

31-Dec-2017

6

Scotiabank Peru

Peru

A—

A3

BBB+

11

18,762

31-Dec-2017

7

Banco Mercantil del Norte

Mexico

BBB+

A3

BBB+

10

53,727

31-Dec-2017

8

Banobras

Mexixo

BBB+

A3

BBB+

10

38,762

31-Dec-2017

9

Nacional Financiera

Mexico

BBB+

A3

BBB+

10

26,254

31-Dec-2017

10

Banco Nacional de Comercio Exterior

Mexico

BBB+

A3

BBB+

10

21,808

31-Dec-2017

                 

Top 10 Safest Banks by Region — Western Europe

Rank

Company Name

Country

Fitch

Moody’s

S&P

Total Score

Assets ($ Mil.)

Statement Date

1

KfW

Germany

AAA

Aaa

AAA

30

566,486

31-Dec-2017

2

Zuercher Kantonalbank

Switzerland

AAA

Aaa

AAA

30

167,945

31-Dec-2017

3

Landwirtschaftliche Rentenbank

Germany

AAA

Aaa

AAA

30

108,711

31-Dec-2017

4

L-Bank

Germany

AAA

Aaa

AAA

30

84,640

31-Dec-2017

5

Bank Nederlandse Gemeenten

Netherlands

AA+

Aaa

AAA

29

167,932

31-Dec-2017

6

Nederlandse Waterschapsbank

Netherlands

NR

Aaa

AAA

29

101,924

30-Jun-2017

7

Kommunalbanken

Norway

NR

Aaa

AAA

29

47,738

31-Dec-2017

8

NRW.BANK

Germany

AAA

Aa1

AA—

26

175,242

31-Dec-2017

9

Banque et Caisse d'Epargne de L'Etat

Luxembourg

NR

Aa2

AA+

24.5

54,305

31-Dec-2017

10

Caisse des Depots et Consignations

France

AA

Aa2

AA

24

207,623

31-Dec-2017


Top 10 Safest Banks by Region — Central, Eastern Europe and Former Soviet Union

Rank

Company Name

Country

Fitch

Moody’s

S&P

Total Score

Assets ($ Mil.)

Statement Date

1

Ceska Sporitenlna

Czech Republic

A—

A2

A

14

62,431

31-Dec-2017

2

Komercni Banka

Czech Republic

A—

A2

A

14

47,158

31-Dec-2017

3

ING Bank Slaski

Poland

A

A2

NR

14

36,197

31-Dec-2017

4

Bank Pekao

Poland

A—

A2

BBB+

12

53,275

31-Dec-2017

5

Bank Zachodni WBK

Poland

BBB+

A3

NR

9.5

43,856

31-Dec-2017

6

mBank

Poland

BBB

Baa1

BBB+

8

37,751

31-Dec-2017

7

Banca Comerciala Romana

Romania

BBB+

Baa3

NR

5

18,169

31-Dec-2017

8

BRD-Groupe Societe Generale 

Romania

BBB+

Baa3

NR

5

14,070

31-Dec-2017

9

Vnesheconombank

Russian Federation

BBB—

NR

BBB—

2

58,611

31-Dec-2017

10

OTP Bank

Hungary

NR

Baa3

BBB—

2

51,059

31-Dec-2017


Top 10 Safest Banks by Region — Asia

Rank

Company Name

Country

Fitch

Moody’s

S&P

Total Score

Assets ($ Mil.)

Statement Date

1

DBS Bank

Singapore

AA—

Aa1

AA—

23

387,337

31-Dec-2017

2

Oversea-Chinese Banking Corporation

Singapore

AA—

Aa1

AA—

23

340,370

31-Dec-2017

3

United Overseas Bank

Singapore

AA—

Aa1

AA—

23

268,287

31-Dec-2017

4

Korea Development Bank

South Korea

AA—

Aa2

AA

23

246,231

31-Dec-2017

5

The Export-Import Bank of Korea

South Korea

AA—

Aa2

AA

23

78,826

31-Dec-2017

6

Industrial Bank of Korea

South Korea

AA—

Aa2

AA—

22

255,805

31-Dec-2017

7

Hang Seng Bank

Hong Kong

A+

Aa3

AA—

20

189,201

31-Dec-2017

8

Bank of Taiwan

Taiwan

NR

Aa3

A+

18.5

165,621

31-Dec-2017

9

China Development Bank

China

A+

A1

A+

18

2,450,812

31-Dec-2017

10

Agricultural Development Bank of China

China

A+

A1

A+

18

808,118

31-Dec-2017


Top 10 Safest Banks by Region — Middle East

Rank

Company Name

Country

Fitch

Moody’s

S&P

Total Score

Assets ($ Mil.)

Statement Date

1

First Abu Dhabi Bank

UAE

AA—

Aa3

AA—

21

182,156

31-Dec-2017

2

National Bank of Kuwait

Kuwait

AA—

Aa3

A+

20

86,279

31-Dec-2017

3

Qatar National Bank

Qatar

A+

Aa3

A

18

222,824

31-Dec-2017

4

Abu Dhabi Commercial Bank

UAE

A+

A1

A

17

72,159

31-Dec-2017

5

Kuwait Finance House

Kuwait

A+

A1

NR

17

57,524

31-Dec-2017

6

Unition National Bank

UAE

A+

A1

NR

17

29,277

31-Dec-2017

7

Al Hilal Bank

UAE

A+

A1

NR

16.5

12,195

31-Dec-2017

8

Abu Dhabi Islamic Bank

UAE

A+

A2

NR

15.5

33,568

31-Dec-2017

9

Al Ahli Bank of Kuwait

Kuwait

A+

A2

NR

15.5

14,455

31-Dec-2017

10

Quatar Islamic Bank

Quatar

A

A1

A—

15

41,312

31-Dec-2017


Top 10 Safest Banks by Region — Australasia

Rank

Company Name

Country

Fitch

Moody’s

S&P

Total Score

Assets ($ Mil.)

Statement Date

1

Commonwealth Bank of Australia

Australia

AA—

Aa3

AA—

21

734,723

31-Dec-2017

2

ANZ Group

Australia

AA—

Aa3

AA—

21

703,415

30-Sep-2017

3

Westpac Banking Corporation

Australia

AA—

Aa3

AA—

21

667,786

30-Sep-2017

4

National Australia Bank

Australia

AA—

Aa3

AA—

21

617,969

30-Sep-2017

5

Suncorp-Metway

Australia

A+

A1

A+

18

48,782

30-Jun-2017

6

Kiwibank

New Zealand

AA—

A1

A

18

15,103

30-Jun-2017

7

AMP Bank.

Australia

NR

A2

A

14

115,306

31-Dec-2017

8

Bendigo and Adelaide Bank

Australia

A—

A3

BBB+

11

54,931

30-Jun-2017

9

Bank of Queensland

Australia

A—

A3

BBB+

11

40,799

31-Aug-2017

10

Macquarie Group

Australia

A—

A3

BBB

10

146,651

31-Mar-2018


Top 10 Safest Banks by Region — Africa

Rank

Company Name

Country

Fitch

Moody’s

S&P

Total Score

Assets ($ Mil.)

Statement Date

1

Standard Bank of South Africa

South Africa

BB+

Baa3

NR

—1

144,463

30-Jun-2018

2

Absa Bank

South Africa

BB+

Baa3

NR

—2

80,126

31-Dec-2017

3

FirstRand Bank

South Africa

BB+

Baa3

BB

—2

82,844

30-Jun-2017

4

NedBank

South Africa

BB+

Baa3

BB

—2

73,284

31-Dec-2017

5

Investec Bank

South Africa

BB+

Baa3

BB

—2

52,048

31-Mar-2018

6

BMCE Bank

Morocco

BB+

Ba1

NR

—4

33,509

31-Dec-2017

7

Attijariwafa Bank

Morocco

BB+

Ba2

BB

—5

50,867

31-Dec-2017

8

Groupe Banque Centrale Populaire

Morocco

NR

Ba2

BB+

—5.5

40,036

31-Dec-2017

9

Zenith Bank

Nigeria

B+

B2

B

—14

15,434

31-Dec-2017

10

Guaranty Trust Bank

Nigeria

B+

B3

B

—15

10,969

31-Dec-2017

Asset figures from Fitch, Moody’s, and company reports. Ratings valid as of Aug. 17, 2018.