Almost nine years have elapsed since the eruption of the global financial crisis. A good number of financial institutions, including once top rated banks, have been swallowed by the seemingly endless economic crisis. Savers are becoming increasingly skeptical and genuinely concerned about the health of their financial institutions.
The Global Finance Magazine recently published its 25th annual ranking of the 50 safest and most reliable banks across the world. The banks that have always dominated the list in the past years remained on the list, even though some of them didn’t maintain their earlier spots. Some banks improved by taking top positions with others witnessing a demotion. The top performing institutions are usually selected from 500 of the largest banks in the world. The magazine takes into account their long-term foreign currency ratings provided by S&P, Moody’s and Fitch as of August 2014.
Based on these ratings, each bank is accorded a score where ten points represent an AAA rating, nine points for AA+ and so on and so forth, as explained by the project coordinator of Global Finance Magazine, Andrew Cunningham. The banks owned by government import-export finance companies and other banks are never included in the ranking.
About Global Finance Magazine
Founded in 1987, and headquartered in New York, Global Finance enjoys a huge presence in more than 150 countries with over half a million subscribers and recipients. Its audience is made up of senior corporate and financial officers who make investment decisions in financial institutions and multinational companies. The magazine also targets 8,000 international portfolio investors who account for more than 80 percent of all the global assets – under professional management.
On a regular basis, Global Finance develops a list of top performing banks and firms that offer financial services. Over time, these awards have found a special place regarding the standards for measuring the excellence of the providers of financial products. Global Finance World is published monthly and relays financial information in the English language.
Important Highlights From the Report
The following are some of the things that stood out in the report:
- In spite of Europe’s unstable economic climate, the continent’s banks dominated the top ten positions of the world’s safest banks, yet again, in 2015, German’s KFW took the first position for the 5th year in a row. It was followed by Switzerland’s Zurcher Kantonalbank, with Landwirtschaftliche Rentenbank, in Germany, coming in third. Two of Netherlands banks also made it to the top ten of the world’s safest banks.
- Unfortunately, significant banks such as Credit Suisse and Swiss UBS were not in the ratings
- Canada’s Toronto-Dominion Bank did not lose its spot in the list of top ten most reliable banks in the world. It closed the list of top ten safest banks in the world.
- In 2015, the Asian banks put their best feet forward to appear in the top 20. Singapore’s DBS Bank was number 11, and OCBC Bank taking number 12. In South Korea, Development Bank, United Overseas Bank and Export-Import Bank of Korea took top positions as well.
- At position 30, AgriBank was the top performing bank in the United States.
- National Bank of Abu Dhabi, in 29th position was ranked as the best performing bank in the Middle East.
- Originally Pohjola, Finland’s Bank OP Corporate came in at position 43.
According to the Magazine’s publisher and editorial director, the ranking is a reflection of the effect of some of the major political and economic shifts during the past year. Most notable is the significant impact of low oil prices on the Gulf economies. Joseph D. Giarraputo pointed out that the Brexit-like school of thought and political tensions pose a big threat to potential economically beneficial reforms. He added that the Global Finance’s list of world’s safest banks is aimed at providing clients with a consistent metric for comparing the health and security of banking systems across the world.
Top Ten Safest Banks in the World
1. Kreditanstalt fur Wiederaufbau (Germany)
Formerly known as KfW Bankengruppe, KFW is a government-owned development bank and was established in 1948 after the Second World War as one of the initiatives of the Marshall Plan. It is based in Frankfurt, Germany. The Federal Republic of Germany has 80 percent shareholding, with the remaining 20 percent belonging to the States of Germany. It is also well-known for transferring 300 million Euros in 2008, to Lehman Brothers, right before it became bankrupt.
2. Zurcher Kantonalbank (Switzerland)
The value of the total assets of the fourth largest bank in Switzerland stands at 154 billion Swiss Francs. Zurcher Kantonalbank specializes in mortgage and lending, investment and pension. This one operates independently under the public law, and as such, enjoys unlimited state guarantee. Besides being in the industry for the longest time (since 1870), Zurcher Kantonalbank was the first one to comply with the new regulations following the global economic crisis.
3. Landwirtschaftliche Rentenbank (Germany)
The bank was founded in 1949 and is well known for its focus on financing agricultural projects. The state-owned banking institution headquartered in Frankfurt is a financial institution funding the agriculture and food sector in Germany.
4. Landeskreditbank Baden-Württemberg or L Bank (Germany)
The L Bank came to be following a merger of the commercial banking business of L-Bank, SüdwestLB, and Landesgirokasse in 1998. It was incorporated into LLBBW on August 2005 – to operate as a dependent institution under the public law. It is famous for its huge collection of valuable ancient musical instruments.
5. Bank Nederlandse Gemeenten or BNG (The Netherlands)
The Dutch bank was established in 1914 in Hague as a municipal credit bureau (Gemeentelijke Credietbank). It is a funding agency for the local government. It specializes in the funding for publicly owned organizations. BNG does not offer financing services to privately owned organizations but it is exclusively for public or semi-public companies such as provinces, public housing, public utilities and municipalities. When ranked using assets alone, it is the 4th leading bank in the Netherlands. 50 percent of the shareholding belongs to the Dutch State with the remainder belonging to the provinces and municipalities.
6. Nederlandse Waterschapsbank (The Netherlands)
Formed in 1954, NWB is Dutch Bank that specializes in providing financial solutions to water boards and the local government in the Netherlands. It is owned by provinces and the Dutch Water Boards. Even though it is a registered banking institution, Nederlandse Waterschapsbank extends its services exclusively to the Dutch government, and not to individuals or privately owned organizations.
7. NRW Bank (Germany)
Incorporated as NRW.BANK in 2002, this financial institution is known as the development bank of North Rhine-Westphalia. It is based in Munster and Dusseldorf and had once purchased the Munster Street. Legally, it operates as a public institution and is owned by the state of North Rhine-Westphalia. NRW Bank offers structural support to the state’s economic and political projects.
8. Banque et Caisse d’epargne del’etat (The Netherlands))
This bank was founded in 1856 and has a reputation of being the oldest in the Netherlands. The BCEE is a Luxembourgish Bank founded and owned by the Luxembourgish government. Initially, it was incorporated as a savings bank. Over time, it expanded its competencies, reaching its pinnacle during its transformation by Grand Ducal Decree to become a full-service banking institution in 1944.
Today, it performs all the functions associated with a commercial bank including private and retail banking. As far as its total assets are concerned, it is the 3rd biggest in Luxembourg and the largest financial institution with domestic capital. In 2012, Banque ET Caisse d’epargne del’etat took position 7 in the list of the safest banks in the world by The Global Finance Magazine.
9. Caisse des depots et consignations (France)
The CDC, at times just referred to as Deposit is a public financial institution created in 1816. It is under the control of the French Parliament. In 2008, when the global financial crisis hit, the bank made its first loss. The supervisory committee directly controls the operations of the bank but is required to report to the parliament. The supervisory committee operates on behalf of the state, the local authorities and the competitive activities.
This banking institution is commonly described as the investment arm of the state of French. According to the French monetary and financial code, Caisse des depots et consignations is defined as a public group that serves the interest of the public, as well as a long-term investor.
10. Toronto-dominion Bank (Canada)
Abbreviated as the TD Bank, Toronto-dominion Bank is a Canadian multinational banking corporation, and a provider of financial services based in Toronto, Ontario. The TD Bank was established in 1955 through the merger of the Dominion Bank and the Bank of Toronto that were created in 1869 and 1855 respectively.
Operating as TD Bank Group, TD is the 2nd biggest bank in Canada based on its market capitalization, besides being a top ten banking corporation in North America. Toronto-Dominion Bank is the 19th largest bank worldwide – according to Forbes. Together with its subsidiaries, the bank has more than 85,000 workers and over 22 million clients globally.
It operates as TD Canada Trust in Canada, serving more than 11 million clients in it’s over 1150 branches. It functions as TD Bank in the United States. The United States’ subsidiary was formed following a merger of Commerce Bank and TD Banknorth and boasts of more than 6.5 million customers in its more than 1300 branches in the eastern side of the United States.
Toronto-dominion Bank ranked position 66 on the Forbes Global 2000 listing in 2015. It has also been named as one of the top ten employers in Canada by the Financial Post in February 2011. In 2014, TD Bank prized its customers through the ATM when one client was lucky enough to receive airline tickets to Trinidad.
50 Most Reliable Banks in the World
|1||Kreditanstalt fur Wiederaufbau||Germany|
|5||Bank Nederlandse Gemeenten||The Netherlands|
|6||Nederlandse Waterschapsbank||The Netherlands|
|8||Banque et Caisse d’epargne del’etat||France|
|9||Caisse des depots et consignations||Luxembourg|
|12||Oversea-Chinese Banking Corp.||Singapore|
|13||United Overseas Bank||Singapore|
|14||Societe de Financement Locale||France|
|15||Banque Cantonale Vaudoise||Switzerland|
|16||Royal Bank of Canada||Canada|
|17||National Australia Bank||Australia|
|18||Commonwealth Bank of Australia||Australia|
|23||Deutsche Apotheker- und Arzetebank||Germany|
|24||Banque Pictet & Cie*||Switzerland|
|27||Bank of Nova Scotia||Canada|
|28||Hang Seng Bank||Hong Kong|
|29||National Bank of Abu Dhabi||UAE|
|31||Caisse Centrale Desjardins||Canada|
|33||China development bank||China|
|35||Bank of Montreal||Canada|
|36||Agricultural development bank of China||China|
|37||Export-import Bank of China||China|
|40||Korea Development Bank||South Korea|
|42||Industrial Bank of Korea||South Korea|
|44||Qatar National Bank||Qatar|
|46||National Bank of Kuwait||Kuwait|
|47||Export-Import of Korea||South Korea|
Having a clear picture of a bank’s stability is the first step towards making a decision regarding where to open a bank account. Making an informed decision is imperative as it helps you feel safe. The list of the 50 safest banks in the world by the Global Finance Magazine offers significant help when one is choosing a banking partner. For instance, from the above list, consumers who are in search of a Singapore bank account may place their confidence on DBS and OCBC Banks that ranked position 11 and 12 respectively in 2015. Startingbusiness.com is the best place to open a DBS or OCBC bank account; in this site you will get credible information on all your banking needs.