Top 50 Safest Banks In Europe 2020

Global Finance names the 50 Safest Banks in Europe.

Following a period of some relief during the warmer months, the widely predicted second wave of the Covid-19 pandemic has emerged in Europe. France, Spain and the UK have seen sharp increases in cases and positivity rates since September while Germany has experienced a slower resurgence. Governments are responding with new regulations aimed at containing the virus, including partial lockdowns and limits on social interaction.

Global Finance determined its 50 Safest Banks in Europe at an exceedingly difficult time for the industry, one requiring them to innovate and to control their risk exposure. With the end of the health crisis and full economic recovery likely some way off, the stresses on the banking sector are unlikely to diminish soon. Many institutions are responding by expanding digital platforms, introducing new online products and creating revenue opportunities to counteract margin compression, improving operational efficiency and rationalizing branch networks. Revenue and profitability remain under pressure, given an expected increase in credit costs related to rising loan delinquencies and nonperforming assets, particularly in such heavily impacted sectors as small and medium-sized enterprises (SMEs), tourism and hospitality, retail, energy and airlines, making effective risk management all the more important.

Recognizing the risk of asset quality erosion, governments and regulators have responded with relief measures for banks, including loan forbearance, deferral of interest and extension of debt repayment terms into 2021. Moreover, central banks have launched new loan guarantee programs designed to protect banks from significant credit losses and promote lending at this critical time. France, Germany, Spain, the UK, Italy, the Netherlands and other countries have committed €2 trillion ($2.4 trillion), fully covering loans to SMEs and guaranteeing some large corporate exposures.

More broadly, to address the economic downturn and facilitate credit flow to retail and corporate borrowers, regulators have enacted policies that afford banks greater flexibility with liquidity, capital buffers and collateral requirements. The European Banking Authority has postponed its annual stress test until January 2021 to provide operational relief to the sector. In March, the European Central Bank launched its initial €750 billion Pandemic Emergency Purchase Programme, boosted to €1.35 trillion in June, that provides liquidity by purchasing private and public sector debt. The European Commission, the European Investment Bank and the European Stability Mechanism have made over €540 billion available to help individuals and businesses, and to provide liquidity support for SMEs and larger companies and funds for health care treatments and vaccines.

In the UK, in addition to rate cuts, the Bank of England has suspended capital buffers, potentially releasing £190 billion (about $246.8 billion) for lending, and is promoting lending to SMEs through its Term Funding Scheme and Bounce Back Loan Scheme.

Shuffling The Deck

As banks look to balance the need to shore up their businesses with the prerequisite to keep their balance sheets right-side up, rating agency actions have shuffled the deck, affecting Global Finance’s Safest Banks rankings. Rating upgrades have generally been the result of improvements in bank resolution strategies, loss-absorbing capacity and improved capital buffers. This benefitted BNG Bank, which joins a select group of institutions with triple-A ratings from each of the three major agencies, the others being KfW, Zuercher Kantonalbank and Landwirtschaftliche Rentenbank.

Other banks that rose in the rankings this year include DNB Bank and Komercni Banka (both up 8 places), BPCE (6), Natixis (5), and ING Bank Slaski, the Polish subsidiary of Netherlands-based ING Groep (7).

Some rating downgrades, notably for Societe Generale and Danske Bank, reflect profitability concerns; while operational problems negatively impacted Swedbank as Swedish regulators discovered serious risk management deficiencies in the institution’s anti-money laundering procedures. Revenue and profitability concerns, combined with a planned corporate restructuring, prompted downgrades of HSBC Holdings by Fitch and Standard & Poor’s &P, and of the HSBC France subsidiary by S&P, knocking it down more than ten places.

New entrants to this year’s top 50 include Swedish Export Credit, Credit Industriel et Commercial, and AXA Banque. Belgium’s Belfius Bank benefited from “fallen angels” and Denmark’s Nykredit Realkredit and Jyske Bank rose with upgrades.
 

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Europe’s Top 50 Safest Banks

Rank	Company Name	Country	Fitch	Moody’s	S&P	Total Score	Assets ($ Mil.)	Statement Date
1	KfW	Germany	AAA	Aaa	AAA	30	568,486	12/31/19
2	Zuercher Kantonalbank	Switzerland	AAA	Aaa	AAA	30	172,514	12/31/19
3	BNG Bank	Netherlands	AAA	Aaa	AAA	30	168,162	12/31/19
4	Landwirtschaftliche Rentenbank	Germany	AAA	Aaa	AAA	30	101,969	12/31/19
5	Nederlandse Waterschapsbank	Netherlands	NR	Aaa	AAA	29	93,559	12/31/19
6	Landeskreditbank Baden-Wuerttemberg (L-Bank)	Germany	AAA	Aaa	AA+	29	87,175	12/31/19
7	Kommunalbanken	Norway	NR	Aaa	AAA	29	51,118	12/31/19
8	NRW.BANK	Germany	AAA	Aa1	AA	27	166,206	12/31/19
9	Swedish Export Credit Corporation	Sweden	NR	Aa1	AA+	26	31,543	12/31/19
10	Caisse Des Depots et Consignations	France	AA	Aa2	AA	24	202,754	12/31/19
11	DZ BANK	Germany	AA–	Aa1	AA–	23	628,410	12/31/19
12	Svanska Handelsbanken	Sweden	AA	Aa2	AA–	23	329,363	12/31/19
13	Banque et Caisse d’Epargne de l’Etat	Luxembourg	NR	Aa3	AA+	23	53,743	12/31/19
14	Banque Cantonale Vaudoise	Switzerland	NR	Aa2	AA	23	49,926	12/31/19
15	Deutsche Apotheker- und Aerztebank	Germany	AA—	Aa2	AA–	22	55,384	12/31/19
16	DNB Bank	Norway	NR	Aa2	AA–	21.5	270,614	12/31/19
17	SFIL	France	NR	Aa3	AA	21.5	76,246	12/31/19
18	Banque Pictet & Cie	Switzerland	AA–	Aa2	NR	21.5	37,932	12/31/19
19	Nordea Bank	Finland	AA–	Aa3	AA–	21	623,320	12/31/19
20	SEB	Sweden	AA–	Aa2	A+	21	306,507	12/31/19
21	Sparkassen-Finanzgruppe	Germany	A+	Aa2	NR	20	1,423,277	12/31/18
22	UBS	Switzerland	AA–	Aa3	A+	20	971,916	12/31/19
23	Rabobank	Netherlands	AA–	Aa3	A+	20	663,481	12/31/19
24	HSBC France	France	AA–	Aa3	A+	20	267,011	12/31/19
25	OP Corporate Bank	Finland	NR	Aa3	AA–	20	73,481	12/31/19
26	BNP Paribas	France	A+	Aa3	A+	19	2,431,852	12/31/19
27	Credit Agricole	France	A+	Aa3	A+	19	2,259,132	12/31/19
28	Swedbank	Sweden	A+	Aa3	A+	19	258,394	12/31/19
29	LGT Bank	Lichtenstein	NR	Aa3	A+	18.5	35,089	12/31/19
30	Groupe BPCE	France	A+	A1	A+	18	1,503,189	12/31/19
31	Banque Federative du Credit Mutuel	France	A+	Aa3	A	18	640,282	12/31/19
32	Natixis	France	A+	A1	A+	18	576,498	12/31/19
33	ABN AMRO Bank	Netherlands	A+	A1	A	17	420,997	12/31/19
34	BNP Paribas Fortis	Belgium	A+	A2	A+	17	351,845	12/31/19
35	BGL BNP Paribas	Luxembourg	A+	A2	A+	17	63,509	12/31/19
36	Nationwide Building Society	United Kingdom	A	A1	A	16	304,334	4/4/20
37	Komercni Banka	Czech Republic	A	A1	A	16	47,341	12/31/19
38	SBAB Bank	Sweden	NR	A1	A	16	49,358	12/31/19
39	EFG International	Switzerland	A	A1	NR	15.5	50,793	12/31/19
40	ING Bank Slaski	Poland	A+	A2	NR	15.5	41,722	12/31/19
41	Lansforsakringar Bank	Sweden	NR	A1	A	15.5	39,961	12/31/19
42	AXA Banque	France	A	NR	A+	15.5	17,460	12/31/19
43	HSBC Holdings	United Kingdom	A+	A2	A–	15	2,715,152	12/31/19
44	Societe Generale	France	A–	A1	A	15	1,523,679	12/31/19
45	Erste Group Bank	Austria	A	A2	A	15	276,013	12/31/19
46	Nykredit Realkredit	Denmark	A	A3	A+	15	241,216	12/31/19
47	Banco Santander	Spain	A–	A2	A	14	1,709,222	12/31/19
48	Danske Bank	Denmark	A	A3	A	14	563,377	12/31/19
49	Belfius Bank	Belgium	A–	A1	A–	14	193,720	12/31/19
50	Jyske Bank	Denmark	NR	A2	A	14	93,640	12/31/19
Asset figures from Fitch, Moody’s, and company reports. Ratings valid as of Aug. 17, 2020.