The World’s Safest Banks 2010
In a global economy that has been plagued by troubles in the world’s financial systems, the words “safe” and “bank” still give investors pause. The shakeup of banking systems around the world raises the question: "Which banks are the safest?" These rankings are being published first on CNBC.com.
For the past 19 years, Global Financehas compiled a list of the World’s 50 Safest Banks, and in the current recessionary environment of increased regulation and oversight, long-term safety of banks is of key interest. According to Global Finance, the companies who ranked highly this year were the ones that "cleaned up their balance sheets and strengthened their capital positions."
This ranking of safe banks was created through the comparison of long-term credit ratings (from Moody’s Standard & Poor’s and Fitch) and analysis of total assets owned by the 500 largest banks in the world.
For ease of comparison, we’ve listed the highest ranking bank in each country, as well as key statistics for each country’s banking system. The size of the banking system was determined by the total value of assets owned by the country's banks and financial institutions.
It may be a surprise where you’ll find the safest banks in the world... click ahead to find out!
By Paul Toscano
Posted 30 Aug 2010
Japan
Safest Bank: Shizuoka Bank (#50 Overall)
Japan Banking Industry Stats
Size: $9.54 trillion
Key Interest Rate: 0.10%
Number of banks: 145*
Shizuoka Bank enters into the rankings as the 50th safest bank in the world, and safest in Japan, according to Global Finance. The Japanese Bankers association lists Shizuoka’s total assets at 108.11 billion as of Sept 2009, making it Japan’s third largest regional bank by assets.
The bank operates 167 branches and 23 sub-branches, catering to domestic customers in Tokyo, Osaka, Nagoya and Shizuoka, in addition to overseas customers in New York, Los Angeles, Burssels, Hong Kong, Shanghai and Singapore.
According to the company, the Bank's capital adequacy ratio is 14.12% on a consolidated basis and is one of the highest ratios among Japanese banks. The bank’s Tier I ratio was 13.76%, which is higher than the BIS standard of 8%. Shizuoka has a market cap of approximately $5.66 billion.
*Includes city banks, regional banks, member banks of the Second Association of Regional Banks, trust banks and bank holding companies.
Kuwait
Safest Bank: Nat’l Bank of Kuwait (#38 Overall)
Kuwait Banking Industry Stats
Size: $142.41 billion
Key interest rate: 1.5%
Number of banks: 21*
Under the supervision of Kuwait’s central bank there are 5 commercial banks, 6 Islamic banks** and 1 specialized bank, along with 9 international branch banks incorporated within the country, as of July 2010.
According to the central bank, The National Bank of Kuwait operates 75 branches within the country and 14 branch offices abroad. The Bank holds an A+ rating from S&P, an AA- rating from Fitch and an Aa2 rating from Moody’s.
Accoring to the company’s FY 2009 statements, the bank recorded $924.8 million in profits and listed just over $45 billion in assets, which comprises more than one-third of the Kuwaiti financial system.
*Figure includes Specialized banks, Islamic banks, Commercial banks and foreign branch units incorporated within Kuwait as of June 2010.
**Islamic banks are financial institutions specifically catering their practice to suit Islamic laws regarding the creation of wealth.
Italy
Safest Bank: Intesa Sanpaolo (#35 Overall)
Italy Banking Industry Stats
Size: $5.014 trillion
Key interest rate: 1%
Number of banks: 785
Italy’s Intesa Sanpaolo is only Italian bank to make this year’s list, and is ranked at #35 overall. According to the company, it serves approximately 11.3 million customers in over 5,900 branches. The bank has a strong presence in the Italian market, as well as international presence in Central-Eastern Europe and the Mediterranean.
The bank operates public finance, corporate and investment banking, commanding an Italian market share of 16% in loans,17.6% in deposits, and 25.8% in pension funds, according to the company as of March 2010. Intesa Sanpaolo had a market cap of $26.75 billion euro as of August 2010.
Finland
Safest Bank: Pohjola Bank (#33 Overall)
Finland Banking Industry Stats
Size: $366 billion
Key interest rate: 1%
Number of banks: 360
Finland’s Pohjola Bank, ranked 33rd overall, is the country’s only bank to make the list. Traded on the Helsinki Stock Exchange (OMX), the institution has a market cap of $2.7 billion as of August 2010. The bank operates 582 branches in the country and offers banking services through 220 member banks as the central bank in the OP-Pohjola group.
The OP-Pohjola group listed earnings before tax at EUR 464 million in 2009 and has approximately 4.1 million customers.
United States
Safest Bank: BNY Mellon (#30 Overall)
US Banking Industry Stats*
Size: $11.28 trillion
Key interest rate: 0%-0.25%
Total commercial banks: 1,744**
In the Global Finance rankings of the world’s safest banks, the US banking industry only has 4 names making it to the top 50, with BNY Mellon ranking the best in the country at #30 overall. JPMorgan Chase (#40), Wells Fargo (#43) and U.S. Bancorp (#48) are the other US banks making this year’s list.
BNY Mellon is the 9th largest bank in the country by assets, according to the Federal Reserve, with $235.69 billion in total assets in Q2 2010. As of this writing, the bank's stock is also favored by analysts.
*US Federal Reserve data as of 3/31/10
**Insured US-Chartered Commercial Banks that have consolidated assets of $300 million or more
Sweden
Safest Bank: Nordea Bank (#27 Overall)
Sweden Banking Industry Stats
Size: $1.077 trillion
Key interest rate: 0.5%
Total commercial banks: 30
The four largest banks in Sweden - Nordea, Swedbank, Svenska Handelsbanken and SEB - account for approximately 75% of the country’s market share, according to the Swedish Bankers Association. Two Swedish banks make Global Finance’s list this year, Nordea Bank at #27 overall and Svenska Handelsbanken at #29.
According to the company, Nordea Bank has about 10 million customers and operates 1,400 branches. The bank’s two largest stakeholders are the Sampo Group, a Finnish banking group that holds 20.6% of the company and the Swedish Government, which owns a 19.9% stake.
Singapore
Safest Bank: DBS Bank (#23 Overall)
Singapore Banking Industry Stats
Size: $733.85 billion
Key interest rate: 0.146%
Total commercial banks: 120
In Singapore, the safest bank in 2010 is DBS Bank, which operates a regional network of over 200 branches across 50 cities throughout Asia. With primary operations in Singapore and Hong Kong, the company reports that nearly 85% of its annual net profits come from those markets, reporting 4 million customers in Singapore and 1 million in Hong Kong.
DBS holds credit ratings of AA- and Aa1 and according to the company, it is the largest commercial banking group in Southeast Asia. DBS is listed on the Singapore Exchange (SGX).
Other Banks in Top 50
Oversea-Chinese Banking Corp
United Overseas Bank
United Kingdom
Safest Bank: HSBC Holdings (#19 Overall)
UK Banking Industry Stats
Size: $11.032 trillion
Key interest rate: 0.5%
Total commercial banks: 64
One of the largest banking systems in the world, the UK only manages to get 4 out of the 64 UK-based commercial banks on the top 50 list. Ranked 19th on the list, HSBC, with a market cap of $112.09 billion, is the country’s largest and safest bank.
Other Banks in Top 50
Barclays Bank
Lloyds Banking Group
Nationwide Building Society
New Zealand
Safest Bank: ASB Bank (#17 Overall)
New Zealand Banking Industry Stats
Size: $261.87 billion
Key interest rate: 2.75%
Registered banks: 19
New Zealand also manages to make the list, with ASB Bank Limited ranked at #17. This Kiwi bank is part of the ASB group, which composed of 7 banking and financial firms, and is the country’s only bank on the list. Although ASB is headquartered and operates in New Zealand, the firm is Australian-owned.
Spain
Safest Bank: Banco Santander (#14 Overall)
Spain Banking Industry Stats
Size: $3.69 trillion
Key interest rate: 1%
Total financial institutions: 477
Despite Spain’s economic troubles over the past year, four of the country’s banks make it on to this year’s list. Banco Santander is ranked #14 worldwide, commanding a market capitalization of $102.81 billion.
Banco Santander is the major bank of Grupo Santander, which has operations in Europe, Asia, North America, Latin America and Africa. Groupo Santander is one of the largest banking groups in Europe with over 1.111 trillion euro in assets in 2009.
Other Banks in Top 50
Banco Bilbao Vizcaya Argentaria
Banco Espanol de Credito
la Caixa
Australia
Safest Bank: National Australia Bank (#11 Overall)
Australia Banking Industry Stats
Size: $2.533 trillion
Key interest rate: 4.5%
Number of banks: 58
In this year’s rankings, Australia’s safest bank is the National Bank of Australia, with a market cap of approximately 49.17 billion AU and has operations catering to 10.93 million customers throughout Australia, New Zealand, the UK, the United States and Asia.
The NAB group reported assets of $654.1 billion AU in 2009 and maintains AA ratings from the three major ratings agencies.
Other Banks in Top 50
Westpac Banking Corporation
Commonwealth Bank of Australia
Australia & New Zealand Banking Group
Canada
Safest Bank: Royal Bank of Canada (#10 Overall)
Canada Banking Industry Stats
Size: $1.880 trillion (Canadian)
Key interest rate: 0.75%
Total domestic banks: 22
In Global Finance’s 2010 report, Canada is home to the top 4 safest banks in North America, led by the Royal Bank of Canada (RBC). With over 18 million customers, RBC operates in 55 countries, and is also the country’s largest financial institution with a market cap of $68.04 billion.
Other Banks in Top 50
Toronto-Dominion Bank
Scotiabank
Caisse centrale Desjardins
BMO Financial Group
CBIC
Germany
Safest Bank: Landwirtschaftliche Rentenbank (#4 Overall)
Germany Banking Industry Stats
Size: $12.29 billion
Key interest rate: 1%
Number of banks: 1,838
With five banks listed on Global Finance’s World’s 50 Safest Banks, Germany places four banks in the top ten, which includes Landwirtschaftliche Rentenbank at #4 overall. Last year’s safest bank, KfW, still ranks highly at #8.
Other Banks in Top 50
Landeskreditbank Baden-Wuerttemberg-Foerderbank
KfW
NRW Bank
Deutsche Bank AG
Landesbank Baden-Wuerttemberg
Switzerland
Safest Bank: Zuercher Kantonalbank (#3 Overall)
Switzerland Banking Industry Stats
Size: $2.536 trillion
Key interest rate: 0.25%
Number of financial institutions: 278
The Swiss banking system is represented in Global Finance's rankings by three banks, led by Zuercher Kantonalbank with international players Credit Suisse and UBS finding themselves lower in the list. Zuercher Kantonalbank, a cantonal bank , has assets of $114.14 billion and places third overall on this year’s list.
Other Banks in Top 50
Credit Suisse
The Netherlands
Safest Bank: Bank Nederlandse Gemeenten (#2 Overall)
Netherlands Banking Industry Stats
Size: $2.79 trillion
Key interest rate: 1%
Number of banks: 777
The Bank Nederlandse Gemeenten (BNG) is one of the three Dutch banks finding itself in the top ten safest banks in the world. A government-owned bank (50% by the Dutch government and 50% by municipalities), BNG is joined in by the other Dutch firms Rabobank, and Nederlandse Waterschapsbank at the top of Global Finance’s list.
Other Banks in Top 50
Rabobank Group
Nederlandse Waterschapsbank
France
Safest Bank: Caisse des Dépôts et Consignations (#1 Overall)
France Banking Industry Stats
Size: $10.42 trillion
Key interest rate: 1%
Number of financial institutions: 714
France is home to the world’s safest bank in 2010, Caisse des Dépôts et Consignations (CDC), according to Global Finance. France also has a strong showing in this year’s list, with six banks in the top 50.
The Caisse des Dépôts group is a public financial institution that performs public-interest missions on behalf of France’s central, regional and local governments. The bank was created in 1816 to restore confidence after the Napoleonic Wars.
Although the bank has always had autonomy, CDC remains "under Parliament's supervision and guarantee," according to French law. The bank’s connection to the French government also helps it maintain AAA-credit ratings.
The CDC group is a public/private mix of companies and has been successful in growing profits even throughout the global financial crisis, posting a 35% gain in recurring profits between 2007 and 2009 and a net banking income of 6.46 billion euro in 2009.
Other Banks in Top 50
BNP Paribas
Credit Agricole
Societe Generale
Banque Federative du Credit Mutuel
Credit Industriel et Commercial