Global Finance’s top 50 emerging markets honorees dealt with their unique challenges in their own way.
No two emerging markets are ever alike—therefore, the institutions making up Global Finance’s rankings of the Safest Emerging Markets Banks face unique dynamics in each respective region. With the outlook for global growth subdued, many banks face downside risk from post-pandemic inflation, slowing business volumes, asset-quality deterioration and pressure on profitability. The impact of these challenges and of central banks’ policy responses is playing out in various ways across the globe.
While many central banks are aggressively raising interest rates to combat inflation, in the Asia-Pacific region, the People’s Bank of China is cutting rates to reverse the country’s economic deterioration. Beijing also faces significant risks from a burgeoning real estate crisis and ongoing trade tension with the US.
A significant contributor to persistent inflationary pressure globally is the energy sector, which saw OPEC+ members—specifically, Saudi Arabia and Russia—cut oil production earlier this year to boost prices. Saudi Arabia recently extended its one million-barrel-per-day output cuts to the end of the year. Given the possibility of falling demand, stemming from China’s slowing economy and a weaker overall global economic outlook, the near-term movement in oil prices remains a question mark, particularly with renewed hostilities erupting in the Middle East. But higher prices remain a source of economic stress for some emerging market countries.
Banks domiciled in the Middle East have benefited from the uptick in oil as sovereign rating upgrades in the region also lifted the banking sector—most dramatically in Saudi Arabia, whose rating S&P raised in March citing structural improvements that support GDP growth and which Fitch upgraded the following month citing the kingdom’s strong fiscal balance sheet. Saudi GDP grew 8.7% in 2022 on the strength of higher oil prices and Riyadh’s ongoing national development program, Vision 2030, which aims to overhaul the economy to boost living standards, diversify away from oil and stimulate job growth, particularly for the younger demographic.
Vision 2030 is expected to benefit the banking sector through participation in financing large infrastructure projects, expansion of mortgage lending and a drive to improve financial literacy. Saudi banks have enjoyed positive ratings moves beyond the upgrades to the sovereign, suggesting the government’s greater capacity to support the country’s banking sector. The development program was a factor as S&P upgraded Al Rajhi Bank based on its strong retail franchise and expanded corporate lending, which helped it rise 11 places over last year to No. 33 in our rankings.
Credit upgrades lifted four more Saudi banks into our ratings as new entrants this year. Riyad Bank benefited from upgrades by Fitch and S&P, vaulting it to No. 45; while Banque Saudi Fransi rose to No. 47, aided by upgrades from the two agencies based in part on strong capitalization levels. Both agencies also upgraded Arab National Bank, which enters our rankings at No. 48; while Saudi Awwal Bank (formerly the Saudi British Bank) claims the No. 50 spot following a Fitch upgrade.
Other Gulf Cooperation Council banks enjoyed ratings boosts as well. In Kuwait, S&P upgraded Boubyan Bank based on stronger capitalization levels, solid loan growth and stable asset quality. In the United Arab Emirates, Mashreqbank also earned a better report card from S&P, which cited a stronger capacity by UAE governments to support the banking sector, on the back of reforms aimed at fostering non-oil growth sectors and strengthening the states’ fiscal position.
Chilean banks are the lone Latin American representatives in our rankings. But they took a fall following a Moody’s downgrade of Chile’s sovereign rating, ascribed by the agency to deteriorating fiscal strength from limited economic diversification, growing debt levels and reduced financial buffers. Downgrades followed for Banco del Estado de Chile and Banco de Chile, both directly affected by the sovereign downgrade. Both banks fell 12 spots in our rankings, to No. 39 and No. 40, respectively. Scotiabank Chile, at No. 27, and Banco de Credito e Inversiones, at No. 46, round out the Chilean contingent in our rankings.
|The 50 Safest Emerging Markets Banks|
|Rank||Name||Domicile||Fitch Rating||Fitch Score||Moody’s Rating||Moody’s Score||S&P Rating||S&P Score||Total Score||Total Assets
|1||Korea Development Bank||South Korea||AA-||7||Aa2||8||AA||8||23||277,506||12/31/22|
|2||Export-Import Bank of Korea||South Korea||AA-||7||Aa2||8||AA||8||23||96,524||12/31/22|
|3||Industrial Bank of Korea||South Korea||AA-||7||Aa2||8||AA-||7||22||338,516||12/31/22|
|4||Bank of Taiwan||Taiwan||NR||6.5||Aa3||7||AA||8||21.5||201,018||12/31/22|
|5||First Abu Dhabi Bank||Uae||AA-||7||Aa3||7||AA-||7||21||302,249||12/31/22|
|6||China Development Bank||China||A+||6||A1||6||A+||6||18||2,611,377||12/31/22|
|7||Agricultural Development Bank of China||China||A+||6||A1||6||A+||6||18||1,300,658||12/31/22|
|8||Export-Import Bank of China||China||A+||6||A1||6||A+||6||18||849,845||12/31/22|
|9||Kookmin Bank||South Korea||A||5||Aa3||7||A+||6||18||404,429||12/31/22|
|10||Shinhan Bank||South Korea||A||5||Aa3||7||A+||6||18||389,072||12/31/22|
|11||Hana Bank||South Korea||A||5||Aa3||7||A+||6||18||380,306||12/31/22|
|12||Qatar National Bank||Qatar||A||5||Aa3||7||A+||6||18||326,552||12/31/22|
|13||Woori Bank||South Korea||A||5||A1||6||A+||6||17||347,419||12/31/22|
|14||NongHyup Bank||South Korea||A||5||A1||6||A+||6||17||303,791||12/31/22|
|15||Abu Dhabi Commercial Bank||Uae||A+||6||A1||6||A||5||17||135,554||12/31/22|
|16||Mega International Commercial Bank||Taiwan||NR||5||A1||6||A+||6||17||120,661||12/31/22|
|17||National Bank of Kuwait||Kuwait||A+||6||A1||6||A||5||17||118,733||12/31/22|
|18||Land Bank of Taiwan||Taiwan||NR||5||Aa3||7||A||5||17||110,924||12/31/22|
|19||Industrial and Commercial Bank of China||China||A||5||A1||6||A||5||16||5,669,862||12/31/22|
|20||China Construction Bank||China||A||5||A1||6||A||5||16||4,953,037||12/31/22|
|21||Agricultural Bank of China||China||A||5||A1||6||A||5||16||4,880,466||12/31/22|
|22||Bank of China||China||A||5||A1||6||A||5||16||4,161,910||12/31/22|
|23||Komercni Banka||Czech Republic||A||5||A1||6||A||5||16||57,661||12/31/22|
|24||Emirates NBD Bank||Uae||A+||6||A2||5||NR||4.5||15.5||202,023||12/31/22|
|25||First Commercial Bank||Taiwan||NR||4.5||A1||6||A||5||15.5||131,398||12/31/22|
|26||Cathay United Bank||Taiwan||NR||4.5||A1||6||A||5||15.5||123,714||12/31/22|
|28||ING Bank Slaski||Poland||A+||6||A2||5||NR||4.5||15.5||49,358||12/31/22|
|29||Abu Dhabi Islamic Bank||Uae||A+||6||A2||5||NR||4.5||15.5||45,884||12/31/22|
|31||Bank of Communications||China||A||5||A2||5||A-||4||14||1,859,779||12/31/22|
|32||Saudi National Bank||Saudi Arabia||A-||4||A1||6||A-||4||14||251,596||12/31/22|
|33||Al Rajhi Bank||Saudi Arabia||A-||4||A1||6||A-||4||14||202,865||12/31/22|
|34||Taipei Fubon Commercial Bank||Taiwan||NR||4||A2||5||A||5||14||125,830||12/31/22|
|35||Kuwait Finance House||Kuwait||A||5||A2||5||NR||4||14||120,795||12/31/22|
|36||Hua Nan Commercial Bank||Taiwan||NR||4||A2||5||A||5||14||115,475||12/31/22|
|37||E.SUN Commercial Bank||Taiwan||NR||4||A2||5||A||5||14||110,757||12/31/22|
|38||Chang Hwa Commercial Bank||Taiwan||NR||4||A2||5||A||5||14||87,353||12/31/22|
|39||Banco del Estado de Chile||Chile||NR||4||A2||5||A||5||14||67,012||12/31/22|
|40||Banco de Chile||Chile||NR||4||A2||5||A||5||14||64,858||12/31/22|
|41||Qatar Islamic Bank||Qatar||A-||4||A1||6||NR||4||14||50,525||12/31/22|
|42||Suhyup Bank||South Korea||NR||4||A2||5||A||5||14||39,720||12/31/22|
|43||Al Ahli Bank of Kuwait||Kuwait||A||5||A2||5||NR||4||14||20,984||12/31/22|
|44||Ahli United Bank||Kuwait||A||5||A2||5||NR||4||14||15,395||12/31/22|
|45||Riyad Bank||Saudi Arabia||A-||4||A2||5||A-||4||13||95,703||12/31/22|
|46||Banco de Credito e Inversiones||Chile||A-||4||A2||5||A-||4||13||91,612||12/31/22|
|47||Banque Saudi Fransi||Saudi Arabia||A-||4||A2||5||A-||4||13||61,887||12/31/22|
|48||Arab National Bank||Saudi Arabia||A-||4||A2||5||A-||4||13||56,580||12/31/22|
|50||Saudi Awwal Bank||Saudi Arabia||A-||4||A2||5||NR||3.5||12.5||83,675||12/31/22|