Banks from the four big GCC economies account for 40 of the Safest Banks in the Middle East. The United Arab Emirates (UAE) contributes 12, Saudi Arabia 10, and Kuwait and Qatar nine each. The two smaller GCC economies, Oman and Bahrain, contribute four and three, leaving Israel to complete the picture with three banks. Banks in other Middle Eastern countries do not come close to reaching the 50 Safest.

All banks in the 50 Safest Middle Eastern list hold investment-grade ratings. Middle Eastern banks outside the GCC and Israel do not. Moroccan banks come closest, while those in Egypt, Lebanon, Tunisia and Jordan remain deep in sub-investment grade territory.

Domestic Bahraini banks also hold sub-investment grade ratings, so they fall outside the 50 Safest. The three Bahraini banks that are included in the ranking—Gulf International Bank, Ahli United Bank and Bank ABC—are able to pierce the Bahrain sovereign-rating ceiling through a combination of foreign ownership and diversified earnings from international, rather than Bahraini, business.

Nine of the 12 UAE banks in the 50 Safest are based in either Abu Dhabi or Dubai, the two emirates that dominate the UAE federation, but the smaller emirates of Sharjah, Ras al-Khaimah and Fujairah contribute one bank each (leaving only the tiny emirates of Umm al-Quwain and Ajman unrepresented).

Of Qatar’s 10 commercial banks, nine feature in the ranking. The 10th, Masraf Al Rayan gets an A1 from Moody’s—a very high rating for a Middle East bank—but it is unrated by S&P and Fitch and thus ineligible for inclusion: Banks must hold at least two ratings to be included in the list.

Similarly, nine of Kuwait’s 11 banks are included. The other two, Kuwait International Bank and Industrial Bank of Kuwait, hold A+ ratings from Fitch but no ratings from Moody’s or S&P.

Saudi banks have remained in the top 50 despite a series of steep downgrades last year. Nonetheless, the strongest Saudi bank, National Commercial Bank, ranks only 25th. Moody’s remains the most confident on the Saudi banking system, rating the biggest banks at A1, while S&P continues to be bearish, rating the banks a full four notches lower, at BBB+.

The ratings on Qatari banks remain under pressure as a result of the diplomatic spat between Qatar and some of its neighbors. Fitch downgraded several Qatari banks by one notch on in late August (after our 50 Safest rankings had been compiled) and both Moody’s and S&P have Qatari banks on negative outlooks. If these negative outlooks lead to rating action, then Qatari banks will slip several places down the rankings. n

How things have changed!

Only 18 of the banks in the 2007 World’s Safest Banks ranking made this year’s list. Seven have fallen out of the Safest 50 but remain in the safest 100, while 17 would not even be included among the safest 100 banks in the world. (Another eight banks from the 2007 list are no longer included because they have been taken over by other banks—HBOS, which was acquired by Lloyds, is an example).

Australian and Canadian banks have been the most resilient. The four Australian banks that featured in 2007 all have a place in this year’s list, as do the four Canadian banks from 2007. DBS and United Overseas Bank, both from Singapore, have moved from near the bottom of the Global 50 in 2007 to near the top today. They have also been joined by the other big Singaporean bank, Oversea-Chinese Banking Corporation (OCBC), which was not among the 2007 top 50.

Banks that benefit from some form of government or regional support have generally retained their places. These banks now dominate the Global rankings, taking the top nine places; whereas in 2007, banks such as Rabobank, UBS and Lloyds sat among them, with exceptionally high ratings.

France’s Caisse des Dépôts et Consignations, which is sponsored by the French government, was ranked as the strongest bank in 2007 and still places highly—ninth in this year’s list. Landwirtschafltliche Rentenbank was third in 2007 and is third this year.

It is extraordinary to see that seven commercial banks held a triple-A rating in 2007, in each case from Moody’s: Rabobank, UBS, Lloyds, Wells Fargo, Royal Bank of Scotland, Royal Bank of Canada and Toronto-Dominion Bank. Moody’s had Aa1 ratings on a further 26 commercial banks in 2007, including Dexia and Wachovia, neither of which still exists as an independent bank.

In 2017, five commercial banks have Aa1 ratings, and no commercial bank has an Aaa rating. Again, Moody’s is the most optimistic agency—all of those Aa1 ratings are assigned by Moody’s. The highest rating awarded by Fitch and S&P to commercial banks is AA, one notch below.

Although it is not visible in the ranking from 2007, a comparison of ratings in 2006 and 2007 would show that the rating agencies upgraded many of the banks over the course of the year, showing extraordinary confidence in their earnings and strength, just months before the collapse of the global financial system.

Of course, the rating agencies could justify their position by saying that in most cases failing banks were bailed out by their governments or taken over by stronger institutions, with the result that bondholders were protected.

Rabobank was ranked the fourth-safest bank in 2007, with two AAA and one AA+ ratings. It has now fallen to 24th in the Global list and is only 10th in the Commercial Banks list. In contrast, Toronto-Dominion Bank ranked 27th in 2007, but rises to 19th this year.

Singapore’s DBS was 40th in 2007 but placed 11th in this year’s Global list and was the second on our Safest Commercial Bank list. DZ Bank, the safest commercial bank this year, was not included in the 2007 rankings; nor was KfW, which has occupied the top slot on the World’s Safest Bank list for six years running. 

This year’s list features 106 countries, a net increase of two over last year. Fitch withdrew its rating on Tai Fung Bank, with the result being that there are no longer any rated banks in Macau to rank. The three new countries are Honduras, Kosovo and Tanzania, where first-time ratings have been assigned to Inversiones Atlántida, ProCredit Bank and CRDB Bank.

New winners earn their position in a variety of ways: a rating upgrade, a downgrade of rival banks or a change in asset size.

In Austria, BAWAG replaces Erste Bank after an upgrade from Moody’s and a first-time rating of A- from Fitch. BNP Paribas Fortis replaces KBC after an upgrade from Fitch. Česká Spořitelna replaces Komerční Banka in the Czech Republic following an upgrade from S&P. And in Hungary, OTP replaces the Hungarian Export-Import Bank after upgrades from both Moody’s and S&P.

In Turkey, Garanti Bankasi replaces Türk Ekonomi Bankasi by holding onto relatively high ratings after the three agencies reassessed their ratings on both the Turkish government and the local banks, downgrading some.

In Ukraine, Alfa-Bank (not related to Alfa Bank of Russia) becomes the safest bank by holding on to its ratings after last year’s winner, PrivatBank, was downgraded by Moody’s and Fitch.

National Bank of Greece loses its position as Greece’s safest bank as a result of a decline in its asset size. In line with the methodology used for our other rankings, when banks have the same score, the bank with the largest asset size is ranked first, reflecting the strong positive correlation between asset size and high ratings.

In some countries, nearly all banks have ratings deep in sub-investment-grade territory. In Central Asia, even the safest banks are often rated in the single-B range. Of the eight countries in sub-Saharan Africa, only South Africa has banks rated investment-grade. Elsewhere, ratings are single B or even lower.

In Western Europe, only Greece and Cyprus have banks with an aggregate rating below investment grade. The safest banks in all the other 20 Western European countries have investment-grade ratings.

Asia earns a huge range of ratings. The safest banks in Singapore and South Korea, DBS and Korea Development Bank, are among the safest in the world. In contrast, the safest bank in Pakistan has a single rating of Caa1 from Moody’s; while in Mongolia, Trade and Development Bank has a Caa2 from Moody’s and B- from S&P. 

Asian banks account for 35 of the 50 biggest emerging-markets banks. China contributes 21 of these, but South Korea also contributes seven and India four. The remainder are based in Taiwan (two banks) and Malaysia (one bank). Chinese banks contribute the 13 biggest emerging-markets banks, the same as last year. All except the 13th, China Everbright Bank, also feature in the rankings of the 50 biggest banks worldwide. The biggest non-Chinese bank is State Bank of India, in 14th place.

South Korea contributes the second largest contingent of banks to the 50 biggest, led by KEB Hana, in 26th place, closely followed by Woori, Kookmin, Shinhan and Korea Development Bank.

Brazil has six banks in the 50 biggest and Venezuela two. No other Latin American country has banks big enough to qualify for the ranking, which is based on dollar-denominated asset size. Itau Unibanco Holding is the largest Brazilian bank, at 16th, followed by Banco do Brasil, Caixa Economica Federal and Banco Bradesco.

Appreciation of the Venezuelan currency pushed Banesco Banco Universal up eight places and enabled Mercantil Banco Universal to enter the rankings at 44th. Banks in Chile, Mexico and Peru, among the safest in the region, fall far short of the asset size needed to reach the ranks of the 50 biggest.

The Gulf States contribute four banks to the emerging-market list, two from the UAE, one from Qatar and one from Saudi Arabia. First Abu Dhabi Bank, the result of the merger earlier this year of National Bank of Abu Dhabi (NBAD) and First Gulf Bank, ranks 38th, compared to 45th for NBAD last year.

Russia contributes two banks, Sberbank and VTB. Both Turkish banks that featured last year, Is Bankasi and Ziraat Bankasi, drop out of this year’s ranking.

The six biggest emerging-market banks show assets of more than $1 trillion each, and the biggest 14 each show assets greater than $500 billion. The 50th-largest emerging-market bank is Bank of Baroda, with assets of $107.2 billion. The 50th last year was Punjab National Bank with $101.6 billion. The combined assets of the 50 biggest banks are $29.8 trillion, compared to $27 trillion last year, an increase of 10.4%. 

* New to the list this year

Source: Asset values from Fitch Ratings in most cases; where not available, company reports

Our annual look at the safest banks in the commercial space shows Germany’s DZ bank replacing TD Bank as the world’s safest commercial bank as result of the Canadian bank’s one-notch downgrade by Moody’s in May.

The first six banks on the list are tied with 23 points each, representing two ratings of AA and one of AA-, or an equivalent configuration. DZ is the largest and therefore ranks first, in line with our methodology of ranking banks with the same score by asset size, reflecting the strong positive correlation between asset size and high ratings.

The three big Singaporean banks—DBS, Oversea-Chinese Bank and United Overseas Bank—rank second, fourth and fifth. Sweden’s Svenska Handelsbanken places third.

No commercial bank enjoys an AAA rating from any of the agencies, and only Moody’s has assigned ratings of AA+ (Aa1 in Moody’s notation). Svenska Handelsbanken and RBC are the only banks receiving a AA rating from Fitch.

Global Finance’s ranking of the world’s safest commercial banks excludes banks that are majority-owned by governments or that enjoy sponsorship from their governments or regional bodies.

European banks contribute 19 of the 50 safest commercial banks. This is fewer than the 25 that Europe contributes to the Global Top 50 rankings, but nonetheless shows that strong European banks are not primarily a result of state ownership or sponsorship.

However, the removal of those state-owned/sponsored banks—which include the nine highest-ranked banks in the global list—does open the way for some banks that do not score highly enough for inclusion in the Global Top 50. Nine US banks feature among the 50 Safest Commercial Banks, compared to only five in the global list. Five Australian banks feature in the commercial list, compared to four in the global list. One Japanese bank, Bank of Tokyo-Mitsubishi, slides into the commercial ranking in 50th place.

In contrast, China contributes no banks to the safest-commercial ranking. The two Chinese banks in the global list are both state owned, and none of the privately owned Chinese banks come close to scoring highly enough for inclusion in the 50 Safest Commercial Banks. South Korea contributes one bank to the commercial rankings, compared to three for the global ranking.

One Latin American bank scores highly enough for inclusion—Banco Santander Chile at 45th, with a score of 18.

A score of 17 is the minimum requirement for inclusion in this year’s commercial-bank rankings, equivalent to two ratings of A+ and one of A. However, a score of 17 was not in itself sufficient. Three banks scoring 17 occupy the final positions in the ranking; eleven other banks, including Banco de Chile, scored 17 points but had fewer assets. 

Our annual look at the safest banks in the commercial space shows Germany’s DZ bank replacing TD Bank as the world’s safest commercial bank as result of the Canadian bank’s one-notch downgrade by Moody’s in May.

The first six banks on the list are tied with 23 points each, representing two ratings of AA and one of AA-, or an equivalent configuration. DZ is the largest and therefore ranks first, in line with our methodology of ranking banks with the same score by asset size, reflecting the strong positive correlation between asset size and high ratings.

The three big Singaporean banks—DBS, Oversea-Chinese Bank and United Overseas Bank—rank second, fourth and fifth. Sweden’s Svenska Handelsbanken places third.

No commercial bank enjoys an AAA rating from any of the agencies, and only Moody’s has assigned ratings of AA+ (Aa1 in Moody’s notation). Svenska Handelsbanken and RBC are the only banks receiving a AA rating from Fitch.

Global Finance’s ranking of the world’s safest commercial banks excludes banks that are majority-owned by governments or that enjoy sponsorship from their governments or regional bodies.

European banks contribute 19 of the 50 safest commercial banks. This is fewer than the 25 that Europe contributes to the Global Top 50 rankings, but nonetheless shows that strong European banks are not primarily a result of state ownership or sponsorship.

However, the removal of those state-owned/sponsored banks—which include the nine highest-ranked banks in the global list—does open the way for some banks that do not score highly enough for inclusion in the Global Top 50. Nine US banks feature among the 50 Safest Commercial Banks, compared to only five in the global list. Five Australian banks feature in the commercial list, compared to four in the global list. One Japanese bank, Bank of Tokyo-Mitsubishi, slides into the commercial ranking in 50th place.

In contrast, China contributes no banks to the safest-commercial ranking. The two Chinese banks in the global list are both state owned, and none of the privately owned Chinese banks come close to scoring highly enough for inclusion in the 50 Safest Commercial Banks. South Korea contributes one bank to the commercial rankings, compared to three for the global ranking.

One Latin American bank scores highly enough for inclusion—Banco Santander Chile at 45th, with a score of 18.

A score of 17 is the minimum requirement for inclusion in this year’s commercial-bank rankings, equivalent to two ratings of A+ and one of A. However, a score of 17 was not in itself sufficient. Three banks scoring 17 occupy the final positions in the ranking; eleven other banks, including Banco de Chile, scored 17 points but had fewer assets. n