Top 50 Safest Global Banks 2015

ANDREW CUNNINGHAM

With financial markets strengthening in most quarters, a stellar credit rating—not just a solid one—is now required to gain a place on our list of the World’s Top 50 Safest Global Banks.

A CUT ABOVE

One thing became clear early on when determining this year’s ranking of the World’s Safest Banks: It is getting a lot harder to make the grade.

To be named one of Global Finance’s 50 safest banks in 2015, financial institutions must hold two credit ratings of at least AA- and one no lower than A+—or an equivalent combination—from among the three major international credit ratings agencies. By comparison, a single AA- rating and two A+ ratings got you on the list in 2014. In years before that, three A+ ratings were enough to secure a position in the top 50.

The loftier standards are mostly due to a raft of rating upgrades, often from Moody’s. Norway’s DNB, for one, received a two-notch upgrade from Moody’s in June 2015, vaulting the bank into 39th spot on the list. Likewise, Liechtenstein’s LGT Bank received a two-notch upgrade from Moody’s in May, pushing the bank to 49th position in the rankings. In both cases, the upgrades were prompted by revisions to Moody’s
bank-rating methodology.

Higher up the ranking, however, familiar names continue to dominate. Germany’s KfW, with assets of $594 billion, retains its crown as the safest bank in the world, with AAA ratings from Moody’s, Fitch and Standard & Poor’s. Three other banks hold three AAA ratings—and their positions on the list as well. Switzerland’s Zürcher Kantonalbank once again comes in at number two. German bank Landwirtschaftliche Rentenbank ranks third. L-Bank (for Landeskreditbank Baden-Württemberg - Förderbank), also headquartered in Germany, is fourth on the list.

In contrast, two financial institutions cracked the Top 50 for the first time. Swiss bank Pictet & Cie enters the ranking (at number 24) for the first time. The bank has not been eligible for inclusion in the past owing to its lack of financial disclosure. Just coming up with an accurate figure for the bank’s year-end assets can be difficult. During the second half of 2014, however, Pictet  & Cie began issuing financial statements as a result of a change in its legal structure to a limited liability company.

Germany’s Deutsche Apotheker- und Ärztebank also enters the ranking for the first time this year, at number 23. The bank was ineligible for inclusion in previous years because of its small asset base. Similarly, Kiwibank reenters the ranks of the Safest 50 this year (number 32). The New Zealand financial institution was excluded from consideration in the two previous years because of insufficient assets. Banque Cantonale Vaudoise is the biggest mover in this year’s ranking of safest banks. The Swiss bank leaped 29 places to number 15—following a two-notch upgrade from Moody’s in May. Germany’s DZ Bank climbed 25 points to number 21 after receiving a two-notch upgrade from Moody’s in June and a one-notch upgrade from Fitch in March. Both of Moody’s rating actions were prompted by its revamped rating methodology, which, among other things, factors in the value of support from shareholders and parent companies.

The biggest casualty in 2015 was HSBC. The UK-based bank ranked 27th in 2014. But it fell out of the rankings this year after ratings downgrades from Moody’s and Standard & Poor’s. BNY Mellon, U.S. Bancorp and Saudi Arabia’s Samba Financial Group also dropped out of the top 50, despite holding the same ratings as they did last year. With bank credit-worthiness on the rise, a score of 19 points no longer makes the grade.

EUROPEAN BANKS DOMINATE

European banks account for 22 of the World’s 50 Safest Banks, up from 19, last year.

In fact, European banks that are government-owned—or have ties to state or regional authorities—occupy the first nine places on the list. But France’s
state-owned Société de Financement Local (SFIL), which placed 10th in 2014, dropped four places to number 14 in this year’s ranking, following a downgrade by Fitch in December.

As a result, TD Bank Group moves to 10th position. With the bump-up, the Canadian company takes the honor for the highest-ranked private-sector bank in the top 50. All told, six banks from Canada make the list.

Ten companies from Asia scored high enough to secure a place in the ranking—three each from China, South Korea and Singapore, along with Hong Kong’s Hang Seng Bank. No Japanese bank makes the list. Four financial institutions from Australia are in the top 50, led by National Australia Bank at number 17. Kiwibank is the sole bank from New Zealand deemed by Global Finance to be among the world’s safest.

Three banks from the Gulf  States feature among the Safest 50. But no banks from other Middle Eastern countries or sub-Saharan Africa appear on the list. Only three banks from the United States feature in the ranking. And BancoEstado from Chile, at 48th, is the sole representative from Latin America. To be eligible for inclusion in Global Finance’s World’s Safest Banks, financial institutions must be among the largest 500 banks in the world, ranked by assets, and they must be rated by at least two of the three international credit-rating agencies. Eligible banks are then scored, with 10 points being awarded for an AAA rating down to one point for a BBB- rating. If a bank is rated by only two of the agencies, an implied score for the third rating is created. The figure is calculated by taking the average of the other two scores and then deducting one point. Banks that are wholly owned by other banks are not eligible for inclusion. Banks that score the same number of points are ranked in order of asset size. That approach underscores the strong positive correlation between bank size and high credit ratings.

METHODOLOGY | BEHIND THE RANKINGS

Our ratings apply to the world’s largest 500 banks by asset size. We calculate the rankings based on the long-term foreign currency ratings issued by Fitch Ratings, Standard & Poor’s and Moody’s Investors Service. Where possible, ratings on holding companies rather than operating companies were used, and banks that are wholly owned by other banks were 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

---

World’s Safest Banks 2015 Top 50
Rank	Bank	Fitch	Moody’s	S&P	Total Score	Reporting Assets $mn	Country
1	KfW	AAA	Aaa	AAA	30	593,750	Germany
2	Zürcher Kantonalbank	AAA	Aaa	AAA	30	160,137	Switzerland
3	Landwirtschaftliche Rentenbank	AAA	Aaa	AAA	30	107,862	Germany
4	L-Bank	AAA	Aaa	AAA	30	84,680	Germany
5	Bank Nederlandse Gemeenten	AA+	AAA	AA+	28	186,360	Netherlands
6	Nederlandse Waterschapsbank	N/R	Aaa	AA+	27.5	85,718	Netherlands
7	NRW.BANK	AAA	Aa1	AA-	26	172,459	Germany
8	Caisse des Dépôts et Consignations	AA	Aa1	AA	25	197,337	France
9	Banque et Caisse d’Epargne de l’Etat	N/R	Aa2	AA+	24.5	49,868	Luxembourg
10	TD Bank Group*	AA-	Aa1	AA-	23	837,909	Canada
11	DBS Bank	AA-	Aa1	AA-	23	333,510	Singapore
12	Oversea-Chinese Banking Corp	AA-	Aa1	AA-	23	303,660	Singapore
13	United Overseas Bank	AA-	Aa1	AA-	23	232,147	Singapore
14	Société de Financement Local (SFIL)	AA-	Aa2	AA	23	106,867	France
15	Banque Cantonale Vaudoise	N/R	Aa2	AA	23	42,256	Switzerland
16	Royal Bank of Canada*	AA	Aa3	AA-	22	834,191	Canada
17	National Australia Bank**	AA-	Aa2	AA-	22	773,062	Australia
18	Commonwealth Bank of Australia***	AA-	Aa2	AA-	22	745,527	Australia
19	ANZ Group**	AA-	Aa2	AA-	22	675,733	Australia
20	Westpac**	AA-	Aa2	AA-	22	674,639	Australia
21	DZ Bank	AA-	Aa2	AA-	22	488,701	Germany
22	Svenska Handelsbanken	AA-	Aa2	AA-	22	364,072	Sweden
23	Deutsche Apotheker- und Ärztebank	AA-	Aa2	AA-	22	42,645	Germany
24	Pictet & Cie	AA-	Aa2	N/R	21.5	34,519	Switzerland
25	Rabobank	AA-	Aa2	A+	21	826,862	Netherlands
26	Nordea	AA-	Aa3	AA-	21	812,604	Sweden
27	Bank of Nova Scotia*	AA-	Aa2	A+	21	714,560	Canada
28	Hang Seng Bank	A+	Aa2	AA-	21	162,980	Hong Kong
29	National Bank of Abu Dhabi	AA-	Aa3	AA-	21	102,409	UAE
30	AgriBank	AA-	Aa3	AA-	21	94,425	United States
31	Caisse centrale Desjardins	AA-	Aa2	A+	21	38,213	Canada
32	Kiwibank	AA	Aa3	A+	21	14,634	New Zealand
33	China Development Bank	A+	Aa3	AA-	20	1,685,954	China
34	Sparkassen-Finanzgruppe (Sparkasse)	A+	Aa2	N/R	20	1,523,129	Germany
35	Bank of Montreal*	AA-	Aa3	A+	20	522,092	Canada
36	Agricultural Development Bank of China	A+	Aa3	AA-	20	513,517	China
37	Export-Import Bank of China	A+	Aa3	AA-	20	386,953	China
38	CIBC*	AA-	Aa3	A+	20	367,985	Canada
39	DNB	N/R	Aa2	A+	20	356,573	Norway
40	Korea Development Bank	AA-	Aa3	A+	20	252,231	South Korea
41	HSBC France	AA-	A1	AA-	20	244,043	France
42	Industrial Bank of Korea	AA-	Aa3	A+	20	199,910	South Korea
43	Pohjola Bank	A+	Aa3	AA-	20	134,062	Finland
44	Qatar National Bank	AA-	Aa3	A+	20	133,614	Qatar
45	CoBank	AA-	N/R	AA-	20	107,428	United States
46	National Bank of Kuwait	AA-	Aa3	A+	20	74,399	Kuwait
47	Export-Import Bank of Korea (KEXIM)	AA-	Aa3	A+	20	66,952	South Korea
48	BancoEstado	A+	Aa3	AA-	20	46,291	Chile
49	LGT Bank	N/R	Aa2	A+	20	31,031	Liechtenstein
50	AgFirst	AA-	N/R	AA-	20	29,503	United States
Source for ratings: Fitch Ratings, Standard & Poor’s, Moody’s Investors Service  Source for Reporting Assets: Fitch Solutions    Statement Ratings current as of 12/31/14 *Statement Ratings current as of 10/31/14 **Statement Ratings current as of 9/30/14 ***Statement Ratings current as of 6/30/14 North America Rank Bank Fitch Moody’s S&P Total Score Reporting Assets $mn Country 1 TD Bank Group* AA- Aa1 AA- 23 837,909 Canada 2 Royal Bank of Canada* AA Aa3 AA- 22 834,191 Canada 3 Bank of Nova Scotia* AA- Aa2 A+ 21 714,560 Canada 4 AgriBank AA- Aa3 AA- 21 94,425 United States 5 Caisse centrale Desjardins AA- Aa2 A+ 21 38,213 Canada 6 Bank of Montreal* AA- Aa3 A+ 20 522,092 Canada 7 CIBC* AA- Aa3 A+ 20 367,985 Canada 8 CoBank AA- N/R AA- 20 107,428 United States 9 AgFirst AA- N/R AA- 20 29,503 United States 10 U.S. Bancorp AA- A1 A+ 19 402,529 United States Statement Ratings current as of 12/31/14 *Statement Ratings current as of 10/31/14 **Statement Ratings current as of 9/30/14 ***Statement Ratings current as of 6/30/14 Western Europe Rank Bank Fitch Moody’s S&P Total Score Reporting Assets $mn Country 1 KfW AAA Aaa AAA 30 593,750 Germany 2 Zürcher Kantonalbank AAA Aaa AAA 30 160,137 Switzerland 3 Landwirtschaftliche Rentenbank AAA Aaa AAA 30 107,862 Germany 4 L-Bank AAA Aaa AAA 30 84,680 Germany 5 Bank Nederlandse Gemeenten AA+ Aaa AA+ 28 186,360 Netherlands 6 Nederlandse Waterschapsbank N/R Aaa AA+ 27.5 85,718 Netherlands 7 NRW.BANK AAA Aa1 AA- 26 172,459 Germany 8 Caisse des Dépôts et Consignations AA Aa1 AA 25 181,803 France 9 Banque et Caisse d’Epargne de l’Etat N/R Aa2 AA+ 24.5 49,868 Luxembourg 10 Société de Financement Local (SFIL) AA- Aa2 AA 23 106,867 France Statement Ratings current as of 12/31/14 *Statement Ratings current as of 10/31/14 **Statement Ratings current as of 9/30/14 ***Statement Ratings current as of 6/30/14 Central & Eastern Europe Rank Bank Fitch Moody’s S&P Total Score Reporting Assets $mn Country 1 Komerční banka A- A2 A 14 41,747 Czech Republic 2 Česká spořitelna A- A2 A- 13 39,528 Czech Republic 3 Bank Pekao A- A2 BBB+ 12 47,795 Poland 4 PKO Bank Polski N/R A2 BBB+ 11 70,911 Poland 5 ING Bank Śląski A- A3 N/R 11 28,473 Poland 6 Bank Zachodni WBK BBB+ A3 N/R 9.5 38,350 Poland 7 mBank BBB- Baa2 BBB 5 33,641 Poland 8 Banca Comercială Română BBB Ba1 N/R 0.5 16,715 Romania Statement Ratings current as of 12/31/14 *Statement Ratings current as of 10/31/14 **Statement Ratings current as of 9/30/14 ***Statement Ratings current as of 6/30/14 Latin America Rank Bank Fitch Moody’s S&P Total Score Reporting Assets $mn Country 1 BancoEstado A+ Aa3 AA- 20 46,291 Chile 2 Banco de Chile N/R Aa3 A+ 18.5 45,517 Chile 3 Banco Santander Chile A+ Aa3 A 18 50,272 Chile 4 Banco de Crédito e Inversiones A- A1 A 15 39,297 Chile 5 HSBC México A A3 BBB+ 12 40,444 Mexico 6 Scotiabank Perú A- A3 BBB+ 11 15,742 Peru 7 Banobras BBB+ A3 BBB+ 10 38,871 Mexico 8 Banco de Crédito BCP A- Baa1 BBB+ 10 38,744 Peru 9 Banco Nacional de Comercio Exterior BBB+ A3 BBB+ 10 17,877 Mexico 10 Banco Santander (Mexico) BBB+ A3 N/R 9.5 63,639 Mexico Statement Ratings current as of 12/31/14 *Statement Ratings current as of 10/31/14 **Statement Ratings current as of 9/30/14 ***Statement Ratings current as of 6/30/14 Asia Rank Bank Fitch Moody’s S&P Total Score Reporting Assets $mn Country 1 DBS Bank AA- Aa1 AA- 23 333,510 Singapore 2 Oversea-Chinese Banking Corp AA- Aa1 AA- 23 303,660 Singapore 3 United Overseas Bank AA- Aa1 AA- 23 232,147 Singapore 4 Hang Seng Bank A+ Aa2 AA- 21 162,980 Hong Kong 5 China Development Bank A+ Aa3 AA- 20 1,685,954 China 6 Agricultural Development Bank of China A+ Aa3 AA- 20 513,517 China 7 Export-Import Bank of China A+ Aa3 AA- 20 386,953 China 8 Korea Development Bank AA- Aa3 A+ 20 252,231 South Korea 9 Industrial Bank of Korea AA- Aa3 A+ 20 199,910 South Korea 10 Export-Import Bank of Korea (KEXIM) AA- Aa3 A+ 20 66,952 South Korea Statement Ratings current as of 12/31/14 *Statement Ratings current as of 10/31/14 **Statement Ratings current as of 9/30/14 ***Statement Ratings current as of 6/30/14 Middle East & Africa Rank Bank Fitch Moody’s S&P Total Score Reporting Assets $mn Country 1 National Bank of Abu Dhabi AA- Aa3 AA- 21 102,409 UAE 2 Qatar National Bank AA- Aa3 A+ 20 133,614 Qatar 3 National Bank of Kuwait AA- Aa3 A+ 20 74,399 Kuwait 4 Samba Financial Group A+ Aa3 A+ 19 57,973 Saudi Arabia 5 National Commercial Bank A+ A1 A+ 18 115,967 Saudi Arabia 6 Al Rajhi Bank A+ A1 A+ 18 82,056 Saudi Arabia 7 Riyad Bank A+ A1 A+ 18 57,224 Saudi Arabia 8 Abu Dhabi Commercial Bank A+ A1 A 17 55,553 UAE 9 Banque Saudi Fransi A Aa3 A 17 50,341 Saudi Arabia 10 SABB A Aa3 A 17 50,029 Saudi Arabia Statement Ratings current as of 12/31/14 *Statement Ratings current as of 10/31/14 **Statement Ratings current as of 9/30/14 ***Statement Ratings current as of 6/30/14 Australia & New Zealand Rank Bank Fitch Moody’s S&P Total Score Reporting Assets $mn Statement Date Country 1 National Australia Bank AA- Aa2 AA- 22 773,062 9/30/14 Australia 2 Commonwealth Bank of Australia AA- Aa2 AA- 22 745,527 6/30/14 Australia 3 ANZ Group AA- Aa2 AA- 22 675,733 9/30/14 Australia 4 Westpac AA- Aa2 AA- 22 674,639 9/30/14 Australia 5 Kiwibank AA Aa3 A+ 21 14,634 31/12/14 New Zealand 6 Suncorp Metway A+ A1 A+ 18 56,577 6/30/14 Australia 7 Bendigo and Adelaide Bank A- A2 A- 13 61,289 6/30/14 Australia 8 Bank of Queensland A- A3 A- 12 43,852 8/31/14 Australia 9 Macquarie A- A3 BBB  10 143,504 3/31/15 Australia 10 ME Bank N/R A3 BBB+ 9.5 16,838 6/30/14 Australia Source for ratings: Fitch Ratings, Standard & Poor’s, Moody’s Investors Service Source for Reporting Assets: Fitch Solutions