WORLD'S SAFEST BANKS 2014 - Global Finance Magazine

Standard Bearers

New entrants raise the benchmark for Global Finance’s annual ranking of the Top 50 Safest Global Banks.

The standard for inclusion in Global Finance’s ranking of the World’s Safest Banks rose in 2014, largely because highly-rated new entrants have squeezed out those at the lower end of last year’s list.

This year, two A+ ratings and a third rating in the AA range are the minimum standard to reach the top 50. In previous years an average rating of A+ was sufficient.

As in previous years, the top 10 positions are occupied by European banks. This year all 10 of those institutions are either government owned or enjoy some form of sponsorship for their government or from government agencies. France’s Société de Financement Local (SFIL), recently created by the French government to support public-sector financing, enters the rankings for the first time. Rabobank, which was ranked 10th last year, falls to 15th following a downgrade by Fitch in November 2013 and cedes its position as the strongest private-sector bank to Canada’s TD Bank Group.

Four institutions still boast AAA ratings from all three major international credit rating agencies, compared with five last year. Germany’s KfW claims first place, followed by Switzerland’s Zürcher Kantonalbank. Landwirtschaftliche Rentenbank and L-Bank, both from Germany, take the third and fourth places.

Nederlandse Gemeenten, based in the Netherlands, lost its AAA rating from S&P in December 2013, and falls to fifth position in this year’s rankings, compared with second last year.

European banks account for 19 of the top 50 banks, two more than last year as a result of the addition of SFIL and Switzerland’s Banque Cantonale Vaudoise. Many of these 19 European banks are commercial banks that do not rely on state sponsorship: Nordea and Svenska Handelsbanken from Sweden continue to rank highly, as do UK’s HSBC and Finland’s Pohjola Bank.

Five US banks are included in the top 50, compared with six last year. Northern Trust drops out following a downgrade from Moody’s in November 2013. BNY Mellon falls from 31st place to 47th following a downgrade from Moody’s in November 2013, ceding its position as the highest-ranked American bank to CoBank and AgriBank, which take 39th and 40th places.

Six Canadian banks continue to feature in the top 50. Caisse centrale Desjardins, at 26th, is the smallest bank in the rankings, with assets at the end of 2013 of $32.7 billion.

The three leading Singaporean banks feature strongly again. DBS, Oversea-Chinese Banking Corp and United Overseas Bank take 12th, 13th and 14th positions, exactly as they did last year.

South Korea contributes four banks to the top 50, one more than last year, as a result of the inclusion this year of Export-Import Bank of Korea (ranked 42nd). Similarly, China’s contribution rises to three from two, owing to the inclusion of Export-Import Bank of China (ranked 33rd). Hang Seng Bank of Hong Kong (ranked 24th) takes the combined total for Asian banks to 11.

Four large Australian banks take the positions from 17th to 20th.

Four banks from the six-state Gulf Cooperation Council feature in the top 50, with National Bank of Abu Dhabi leading the pack at 25th, followed by National Bank of Kuwait (ranked 41st), Qatar National Bank (ranked 49th) and Saudi Arabia’s Samba Financial Group (ranked 50th).

Only one bank from Latin America—Chile’s BancoEstado—scores highly enough to rank in the top 50. Banco de Chile, which featured at 48th last year, has not suffered any downgrades, but this year its score is just short of the level required to claim a place in the top 50.

No banks from Central and Eastern Europe or the Former Soviet Union come close to scoring highly enough to feature in the Safest Global Banks rankings. The regional rankings for CEEFSU continue to be led by Česká spořitelna and Komerční banka from the Czech Republic, followed by banks from Poland and then from Russia. Since last year’s ranking was published, Poland’s BRE bank has rebranded as mBank. It appears sixth in the regional listing, just as BRE did last year.

No banks from sub-Saharan Africa come close to scoring highly enough to be ranked in the Safest Global 50. All the banks featured in the regional list for the Middle East come from the GCC.

Many of the world’s largest banks still fail to score highly enough to make the top 50. BNP Paribas narrowly misses out on the top 50, but Deutsche, JP Morgan Chase, Royal Bank of Scotland and Santander will need much-improved ratings to qualify.

To be eligible for inclusion in the Global and Regional Safest Banks listings, banks must rank among the largest 500 in the world by assets, and they must also hold a rating from at least two of the three major international credit rating agencies. A sub-investment-grade rating from any of the three agencies disqualifies a bank from inclusion. Eligible banks are then scored, with 10 points being awarded to an AAA rating, descending to one point for a BBB- rating. Where a bank is rated by only two agencies, an implied score for the third rating is calculated by taking the average of the other two and deducting one point. Wholly-owned subsidiaries of other commercial banks are not eligible.

Banks with the same points are ranked by asset size, reflecting the strong positive correlation between bank size and high ratings.

NEXT PAGE: METHODOLOGY

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METHODOLOGY

HOW WE MEASURE THE SAFETY OF BANKS

The safest banks chart compares the ratings for the world’s largest 500 banks, based on asset size. Long-term foreign currency ratings issued by Fitch Ratings, Standard & Poor’s and Moody’s Investors Service were used. Where possible, ratings on holding companies were used rather than operating companies, and banks that are wholly owned by other banks were omitted. Government import-export finance institutions were also omitted. Within each rank set, banks are organized according to asset size based on data for the most recent annual reporting period provided by Fitch Solutions and Moody’s. Ratings are reproduced with permission from the three rating agencies, with all rights reserved. A rating is not a recommendation to purchase, sell or hold a security, and it does not comment on market price or suitability for a particular investor.

Fitch Ratings / Standard & Poor’s	Moody’s
AAA	Aaa
AA+	Aa1
AA	Aa2
AA-	Aa3
A+	A1
A	A2
A-	A3

NEXT PAGE: WORLD’S SAFEST BANKS

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WORLD’S SAFEST BANKS 2014 \| TOP 50
Rank	Bank	Fitch	Moody’s	S&P	Total Score	Assets $mn	Statement Date	Country
1	KfW	AAA	Aaa	AAA	30	640,953	12/31/13	Germany
2	Zürcher Kantonalbank	AAA	Aaa	AAA	30	167,927	12/31/13	Switzerland
3	Landwirtschaftliche Rentenbank	AAA	Aaa	AAA	30	112,995	12/31/13	Germany
4	L-Bank	AAA	Aaa	AAA	30	96,733	12/31/13	Germany
5	Bank Nederlandse Gemeenten	AAA	Aaa	AA+	29	180,917	12/31/13	Netherlands
6	Nederlandse Waterschapsbank**	N/R	Aaa	AA+	27.5	100,500	12/31/13	Netherlands
7	NRW.BANK	AAA	Aa1	AA-	26	197,425	12/31/13	Germany
8	Caisse des Dépôts et Consignations	AA+	Aa1	AA	26	197,337	12/31/13	France
9	Banque et Caisse d’Epargne de l’Etat	N/R	Aa1	AA+	26	56,102	12/31/13	Luxembourg
10	Société de Financement Local (SFIL)	AA	Aa2	AA	24	115,195	12/31/13	France
11	TD Bank Group	AA-	Aa1	AA-	23	824,916	10/31/13	Canada
12	DBS Bank	AA-	Aa1	AA-	23	317,729	12/31/13	Singapore
13	Oversea-Chinese Banking Corp	AA-	Aa1	AA-	23	267,485	12/31/13	Singapore
14	United Overseas Bank	AA-	Aa1	AA-	23	224,634	12/31/13	Singapore
15	Rabobank	AA-	Aa2	AA-	22	929,719	12/31/13	Netherlands
16	Royal Bank of Canada	AA	Aa3	AA-	22	823,278	10/31/13	Canada
17	National Australia Bank	AA-	Aa2	AA-	22	752,585	9/30/13	Australia
18	Commonwealth Bank of Australia	AA-	Aa2	AA-	22	698,745	6/30/13	Australia
19	ANZ Group	AA-	Aa2	AA-	22	654,432	9/30/13	Australia
20	Westpac	AA-	Aa2	AA-	22	648,485	9/30/13	Australia
21	Nordea	AA-	Aa3	AA-	21	869,444	12/31/13	Sweden
22	Bank of Nova Scotia	AA-	Aa2	A+	21	711,350	10/31/13	Canada
23	Svenska Handelsbanken	AA-	Aa3	AA-	21	387,591	12/31/13	Sweden
24	Hang Seng Bank	A+	Aa2	AA-	21	147,511	12/31/13	Hong Kong
25	National Bank of Abu Dhabi	AA-	Aa3	AA-	21	88,512	12/31/13	UAE
26	Caisse centrale Desjardins	AA-	Aa2	A+	21	32,691	12/31/13	Canada
27	HSBC	AA-	Aa3	A+	20	2,671,318	12/31/13	United Kingdom
28	Sparkassen-Finanzgruppe (Sparkasse)	A+	Aa2	N/R	20	1,455,045	12/31/12	Germany
29	China Development Bank	A+	Aa3	AA-	20	1,341,642	12/31/13	China
30	Bank of Montreal	AA-	Aa3	A+	20	513,867	10/31/13	Canada
31	CIBC	AA-	Aa3	A+	20	381,015	10/31/13	Canada
32	Agricultural Development Bank of China	A+	Aa3	AA-	20	364,583	12/31/12	China
33	Export-Import Bank of China	A+	Aa3	AA-	20	308,873	12/31/13	China
34	HSBC France	AA-	A1	AA-	20	288,089	12/31/13	France
35	Korea Finance Corporation	AA-	Aa3	A+	20	245,217	12/31/13	South Korea
36	Industrial Bank of Korea	AA-	Aa3	A+	20	201,424	12/31/13	South Korea
37	Korea Development Bank	AA-	Aa3	A+	20	158,921	12/31/13	South Korea
38	Pohjola Bank	A+	Aa3	AA-	20	139,265	12/31/13	Finland
39	CoBank	AA-	N/R	AA-	20	97,644	12/31/13	United States
40	AgriBank	AA-	N/R	AA-	20	87,726	12/31/13	United States
41	National Bank of Kuwait	AA-	Aa3	A+	20	65,958	12/31/13	Kuwait
42	Export-Import Bank of Korea (KEXIM)	AA-	Aa3	A+	20	58,181	12/31/13	South Korea
43	BancoEstado	A+	Aa3	AA-	20	48,802	12/31/13	Chile
44	Banque Cantonale Vaudoise*	N/R	A1	AA	20	45,349	12/31/13	Switzerland
45	AgFirst	AA-	N/R	AA-	20	28,844	12/31/13	United States
46	DZ Bank	A+	A1	AA-	19	533,689	12/31/13	Germany
47	BNY Mellon	AA-	A1	A+	19	374,310	12/31/13	United States
48	U.S. Bancorp	AA-	A1	A+	19	364,021	12/31/13	United States
49	Qatar National Bank	A+	Aa3	A+	19	121,837	12/31/13	Qatar
50	Samba Financial Group	A+	Aa3	A+	19	54,676	12/31/13	Saudi Arabia
Source for ratings: Fitch Ratings, Standard & Poor’s, Moody’s Investors Service. *Source for Reporting Assets: Fitch Solutions, except for Moody’s Investors Service, and bank’s financial reports. Ratings current as of August 14, 2014

NEXT PAGE: REGIONAL RANKINGS | NORTH AMERICA

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NORTH AMERICA
Rank	Bank	Fitch	Moody’s	S&P	Total Score	Assets $mn	Statement Date	Country
1	TD Bank Group	AA-	Aa1	AA-	23	824,916	10/31/13	Canada
2	Royal Bank of Canada	AA	Aa3	AA-	22	823,278	10/31/13	Canada
3	Bank of Nova Scotia	AA-	Aa2	A+	21	711,350	10/31/13	Canada
4	Caisse centrale Desjardins	AA-	Aa2	A+	21	32,691	12/31/13	Canada
5	Bank of Montreal	AA-	Aa3	A+	20	513,867	10/31/13	Canada
6	CIBC	AA-	Aa3	A+	20	381,015	10/31/13	Canada
7	CoBank	AA-	N/R	AA-	20	97,644	12/31/13	United States
8	AgriBank	AA-	N/R	AA-	20	87,726	12/31/13	United States
9	AgFirst	AA-	N/R	AA-	20	28,844	12/31/13	United States
10	BNY Mellon	AA-	A1	A+	19	374,310	12/31/13	United States
11	U.S. Bancorp	AA-	A1	A+	19	364,021	12/31/13	United States
Source for ratings: Fitch Ratings, Standard & Poor’s, Moody’s Investors Service. *Source for Reporting Assets: Fitch Solutions, except for Moody’s Investors Service, and bank’s financial reports. Ratings current as of August 14, 2014

NEXT PAGE: REGIONAL RANKINGS | WESTERN EUROPE

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WESTERN EUROPE
Rank	Bank	Fitch	Moody’s	S&P	Total Score	Assets $mn	Statement Date	Country
1	KfW	AAA	Aaa	AAA	30	640,953	12/31/13	Germany
2	Zürcher Kantonalbank	AAA	Aaa	AAA	30	167,927	12/31/13	Switzerland
3	Landwirtschaftliche Rentenbank	AAA	Aaa	AAA	30	112,995	12/31/13	Germany
4	L-Bank	AAA	Aaa	AAA	30	96,733	12/31/13	Germany
5	Bank Nederlandse Gemeenten	AAA	Aaa	AA+	29	180,917	12/31/13	Netherlands
6	Nederlandse Waterschapsbank	N/R	Aaa	AA+	27.5	100,500	12/31/13	Netherlands
7	NRW.BANK	AAA	Aa1	AA-	26	197,425	12/31/13	Germany
8	Caisse des Dépôts et Consignations	AA+	Aa1	AA	26	197,337	12/31/13	France
9	Banque et Caisse d’Epargne de l’Etat	N/R	Aa1	AA+	26	56,102	12/31/13	Luxembourg
10	Société de Financement Local (SFIL)	AA	Aa2	AA	24	115,195	12/31/13	France
Source for ratings: Fitch Ratings, Standard & Poor’s, Moody’s Investors Service. *Source for Reporting Assets: Fitch Solutions, except for Moody’s Investors Service, and bank’s financial reports. Ratings current as of August 14, 2014

NEXT PAGE: REGIONAL RANKINGS | CENTRAL & EASTERN EUROPE

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CENTRAL & EASTERN EUROPE
Rank	Bank	Fitch	Moody’s	S&P	Total Score	Assets $mn	Statement Date	Country
1	Česká spořitelna	A	A2	A-	14	48,694	12/31/13	Czech Republic
2	Komerční banka	A-	A2	A	14	43,429	12/31/13	Czech Republic
3	PKO Bank Polski*	N/R	A2	A-	12.5	66,026	12/31/13	Poland
4	Bank Pekao	A-	A2	BBB+	12	52,630	12/31/13	Poland
5	ING Bank Śląski	A	Baa1	N/R	11	28,802	12/31/13	Poland
6	mBank	A	Baa3	BBB+	9	34,622	12/31/13	Poland
7	Bank Zachodni WBK	BBB+	Baa1	N/R	8	35,222	12/31/13	Poland
8	Sberbank	BBB	Baa1	N/R	6.5	556,393	12/31/13	Russia
9	Vnesheconombank	BBB	Baa1	BBB-	6	101,254	12/31/13	Russia
10	VTB Bank	N/R	Baa2	BBB-	3.5	266,844	12/31/13	Russia
Source for ratings: Fitch Ratings, Standard & Poor’s, Moody’s Investors Service. *Source for Reporting Assets: Fitch Solutions, except for Moody’s Investors Service, and bank’s financial reports. Ratings current as of August 14, 2014

NEXT PAGE: REGIONAL RANKINGS | LATIN AMERICA

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LATIN AMERICA
Rank	Bank	Fitch	Moody’s	S&P	Total Score	Assets $mn	Statement Date	Country
1	BancoEstado	A+	Aa3	AA-	20	48,802	12/31/13	Chile
2	Banco de Chile*	N/R	Aa3	A+	18.5	49,356	12/31/13	Chile
3	Banco Santander Chile	A+	Aa3	A	18	51,734	12/31/12	Chile
4	Banco de Crédito e Inversiones	A-	A1	A	15	38,756	12/31/13	Chile
5	HSBC Mexico	A	A3	BBB+	12	39,068	12/31/13	Mexico
6	Banobras	BBB+	A3	BBB+	10	37,357	12/31/13	Mexico
7	Banco de Crédito BCP	A-	Baa1	BBB+	10	35,042	12/31/13	Peru
8	Banco Santander Mexico	BBB+	A3	N/R	9.5	62,795	12/31/13	Mexico
9	BBVA Continental	A-	N/R	BBB+	9.5	20,228	12/31/13	Peru
10	Scotiabank Inverlat*	N/R	A3	BBB+	9.5	18,428	12/31/13	Mexico
Source for ratings: Fitch Ratings, Standard & Poor’s, Moody’s Investors Service. *Source for Reporting Assets: Fitch Solutions, except for Moody’s Investors Service, and bank’s financial reports. Ratings current as of August 14, 2014

NEXT PAGE: REGIONAL RANKINGS | ASIA

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ASIA
Rank	Bank	Fitch	Moody’s	S&P	Total Score	Assets $mn	Statement Date	Country
1	DBS Bank	AA-	Aa1	AA-	23	317,729	12/31/13	Singapore
2	Oversea-Chinese Banking Corp	AA-	Aa1	AA-	23	267,485	12/31/13	Singapore
3	United Overseas Bank	AA-	Aa1	AA-	23	224,634	12/31/13	Singapore
4	Hang Seng Bank	A+	Aa2	AA-	21	147,511	12/31/13	Hong Kong
5	China Development Bank	A+	Aa3	AA-	20	1,341,642	12/31/13	China
6	Agricultural Development Bank of China	A+	Aa3	AA-	20	364,583	12/31/12	China
7	Export-Import Bank of China	A+	Aa3	AA-	20	308,873	12/31/13	China
8	Korea Finance Corporation	AA-	Aa3	A+	20	245,217	12/31/13	South Korea
9	Industrial Bank of Korea	AA-	Aa3	A+	20	201,424	12/31/13	South Korea
10	Korea Development Bank	AA-	Aa3	A+	20	158,921	12/31/13	South Korea
11	Export-Import Bank of Korea (KEXIM)	AA-	Aa3	A+	20	58,181	12/31/13	South Korea
Source for ratings: Fitch Ratings, Standard & Poor’s, Moody’s Investors Service. *Source for Reporting Assets: Fitch Solutions, except for Moody’s Investors Service, and bank’s financial reports. Ratings current as of August 14, 2014

NEXT PAGE: REGIONAL RANKINGS | MIDDLE EAST & AFRICA

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MIDDLE EAST & AFRICA
Rank	Bank	Fitch	Moody’s	S&P	Total Score	Assets $mn	Statement Date	Country
1	National Bank of Abu Dhabi	AA-	Aa3	AA-	21	88,512	12/31/13	UAE
2	National Bank of Kuwait	AA-	Aa3	A+	20	65,958	12/31/13	Kuwait
3	Qatar National Bank	A+	Aa3	A+	19	121,837	12/31/13	Qatar
4	Samba Financial Group	A+	Aa3	A+	19	54,676	12/31/13	Saudi Arabia
5	National Commercial Bank	A+	A1	A+	18	100,608	12/31/13	Saudi Arabia
6	Al Rajhi Bank	A+	A1	A+	18	74,632	12/31/13	Saudi Arabia
7	Riyad Bank	A+	A1	A+	18	54,732	12/31/13	Saudi Arabia
8	Abu Dhabi Commercial Bank	A+	A1	A	17	49,869	12/31/13	UAE
9	SABB	A	Aa3	A	17	47,281	12/31/13	Saudi Arabia
10	Banque Saudi Fransi	A	Aa3	A	17	45,348	12/31/13	Saudi Arabia
11	Union National Bank	A+	A1	N/R	17	23,838	12/31/13	UAE
Source for ratings: Fitch Ratings, Standard & Poor’s, Moody’s Investors Service. *Source for Reporting Assets: Fitch Solutions, except for Moody’s Investors Service, and bank’s financial reports. Ratings current as of August 14, 2014

NEXT PAGE: REGIONAL RANKINGS | AUSTRALIA & NEW ZEALAND

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AUSTRALIA & NEW ZEALAND
Rank	Bank	Fitch	Moody’s	S&P	Total Score	Assets $mn	Statement Date	Country
1	National Australia Bank	AA-	Aa2	AA-	22	752,585	9/30/13	Australia
2	Commonwealth Bank of Australia	AA-	Aa2	AA-	22	698,745	6/30/13	Australia
3	ANZ Group	AA-	Aa2	AA-	22	654,432	9/30/13	Australia
4	Westpac	AA-	Aa2	AA-	22	648,485	9/30/13	Australia
5	Suncorp Metway	A+	A1	A+	18	57,409	6/30/13	Australia
6	Bendigo and Adelaide Bank	A-	A2	A-	13	55,874	6/30/13	Australia
7	Bank of Queensland	BBB+	A3	A-	11	38,050	8/31/13	Australia
8	Macquarie	A-	A3	BBB	10	141,912	3/31/14	Australia
Source for ratings: Fitch Ratings, Standard & Poor’s, Moody’s Investors Service *Source for Reporting Assets: Fitch Solutions, except for Moody’s Investors Service, and bank’s financial reports Ratings current as of August 14, 2014

New entrants raise the benchmark for Global Finance’s annual ranking of the Top 50 Safest Global Banks.

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METHODOLOGY

HOW WE MEASURE THE SAFETY OF BANKS

Fitch Ratings /Standard & Poor’s

Moody’s

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WORLD’S SAFEST BANKS 2014 | TOP 50

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NORTH AMERICA

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WESTERN EUROPE

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CENTRAL & EASTERN EUROPE

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LATIN AMERICA

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ASIA

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MIDDLE EAST & AFRICA

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Standard & Poor’s