Almost one in four countries experienced a change of their Safest Bank in 2018, as winners were rewarded for improved financial profiles, higher ratings and asset growth.
Which banks are their country’s safest? Ratings fluctuations—sparked variously by macroeconomic turmoil, political upheavals and market shifts—reshuffled the deck this year such that 25 banks, almost one in four, fell out of our 2018 Country Winners group. That compares with turnover of just 13 institutions last year. Our universe covers 106 countries, unchanged year-over-year, but including a new entrant, Stanbic Bank of Uganda.
For the World’s Safest Banks by Country rankings, we consider the largest 1,000 banks globally by assets, rather than the top 500 as in most of our other rankings. Furthermore, only one agency rating is required for eligibility. Consequently, any rating fluctuation and any decision by an agency to initiate coverage can result in significant changes compared with the prior year.
Among notable shifts in fortune, Austria’s Erste Group improved its financial profile, prompting a Moody’s upgrade and returning it to the top spot, which it held in 2016, replacing BAWAG Bank. In Latin America, HSBC Mexico exhibited better operating performance, earning a Moody’s upgrade and replacing Banobras. In Panama, Banco General added a Moody’s rating, which tied it with 2017 incumbent Bladex—but it won the country ranking due to its larger asset size, an important element of our methodology. Size was the decisive factor in Bulgaria as well, where United Bulgarian Bank edged out Societe Generale Expressbank; in Ukraine, where CB Privatbank replaced Alfa-Bank; and in Australia, where Commonwealth Bank of Australia was ranked ahead of ANZ Group by virtue of a larger balance sheet.
Thanks to an initial rating by Moody’s, BRAC Bank improved, and replaced City Bank in Bangladesh. The Indonesian banking sector has stabilized, and Moody’s upgraded a number of banks, pushing Bank Central Asia to the top spot ahead of last year’s winner, Maybank Indonesia, which doesn’t carry a Moody’s rating.
Latin America and Central & Eastern Europe displayed greater fluctuations in rankings than any other region, based on our country-winner segmentation. These developing- and emerging-market economies and their banking systems are vulnerable to geopolitical turmoil and currency instability and frequently display a lack of resilience in times of global financial stress and volatility in global markets. The significant economic and financial stress and associated currency crisis in Turkey in 2018 is an example of this heightened financial sensitivity and how these factors can destabilize year-over-year rankings. This year’s winner, Yapi ve Kredi Bankasi, has a significantly lower score (-8) than the winner last year, Turkiye Garanti Bankasi (-3).