Top 50 Safest Banks In The World

The snazzy monthly business magazine from Indonesia, Global Finance, has always compiled an annual list that many do not pay much attention to. However, thanks to the rapid combustion of many of the world's largest banks over the last 6 months, suddenly the Annual List Of The 50 Safest Banks becomes essential reading. Owing to the developments in the marketplace, Global Finance has decided to publish a mid-year update of its much respected Safest Banks listing.

And among the list were Singapore’s three biggest banks: DBS Bank came in at 28, United Overseas Bank at 37 and OCBC at 38. However, missing from the list were China banks like Industrial and Commercial Bank of China, now the biggest bank in the world with a market cap of US$200 billion, China Construction Bank ($130 billion) and Bank of China (US$121 billion).

The “World’s 50 Safest Banks” 2009 were selected through a comparison of the long-term credit ratings and total assets of the 500 largest banks around the world. Ratings from Moody’s, Standard & Poor’s and Fitch were used.

The rating agencies have determined these banks have demonstrated a more prudent and sustainable approach to risk than their peers,” says Global Finance publisher Joseph D. Giarraputo. “More than ever customers all around the world are viewing long term creditworthiness as the key feature of the banks with which they do business.”

A full report on the list will appear in the April issue of Global Finance.

p/s Of course I don't agree with the ratings, mainly because they relied on the fucked up ratings agency. The list while being interesting, needs a lot more input of other intangible factors, but I guess this will do for now.


1. KfW
(Germany)
2. Caisse des Depots et Consignations (CDC)
(France)
3. Bank Nederlands Gemeenten (BNG)
(Netherlands)
4. Landwirtschaftliche Rentenbank
(Germany)
5. Rabobank
(Netherlands)
6. Landeskreditbank Baden-Wuerttemberg-Foerderbank
(Germany)
7. NRW. Bank
(Germany)
8. BNP Paribas
(France)
9. Banco Santander
(Spain)
10. Royal Bank of Canada
(Canada)
11. National Australia Bank
(Australia)
12. Commonwealth Bank of Australia
(Australia)
13. Banco Bilbao Vizcaya Argentaria (BBVA)
(Spain)
14. Toronto-Dominion Bank
(Canada)
15. Australia & New Zealand Banking Group
(Australia)
16. Westpac Banking Corporation
(Australia)
17. Banco Espanol de Credito S.A. (Banesto)
(Spain)
18. ASB Bank Limited
(New Zealand)
19. HSBC
(United Kingdom)
20. Credit Agricole
(France)
21. Wells Fargo
(United States)
22. Nordea Bank
(Sweden)
23. Scotiabank
(Canada)
24. La Caixa
(Spain)
25. Svenska Handelsbanken
(Sweden)
26. US Bancorp
(United States)
27. Banco Popular Espanol
(Spain)
28. DBS Bank
(Singapore)
29. Pohjola Bank
(Finland)
30. Deutsche Bank
(Germany)
31. Société Générale
(France)
32. Intesa Sanpaolo
(Italy)
33. Bank of Montreal
(Canada)
34. DnB NOR Bank
(Norway)
35. The Bank of New York Mellon
(United States)
36. Caixa Geral de Depositos
(Portugal)
37. United Overseas Bank
(Singapore)
38. OCBC
(Singapore)
39. Axa Bank Europe
(Belgium)
40. Credit Suisse Group
(Switzerland)
41. Landesbank Baden-Wuerttemberg
(Germany)
42. Nationwide Building Society
(United Kingdom)
43. CIBC
(Canada)
44. National Bank Of Kuwait
(Kuwait)
45. Barclays
(United Kingdom)
46. UBS
(Switzerland)
47. JPMorgan Chase
(United States)
48. Bank of Tokyo-Mitsubishi UFJ
(Japan)
49. Banque Federative du Credit Mutuel (BFCM)
(France)
50. Credit Industriel et Commercial (CIC)
(France)

p/p/s: photo: Izumi Mori (yes, related to the famous Mori family, e.g. the Mori Building)

Phew! CDS, Its Just $33.6 Trillion Not $50 Trillion!!!

Dealbook: In the first of a series of weekly reports, the Depository Trust and Clearing Corporation said late Tuesday afternoon that there were a total of $33.6 trillion in credit default swaps outstanding on corporate, government and asset-backed securities. That is less than some earlier estimates of $50 trillion or more.

The company’s data provides a clearer picture of the money bet on the creditworthiness of the world’s companies and governments. The largest dollar amount of credit default swaps were written for protection against the debts of Turkey, Italy, Brazil, Russia and GMAC as of Oct. 31.

Others at the top of the D.T.C.C. list of 1,000 were Merrill Lynch, Goldman Sachs, Morgan Stanley, GE Capital and Countrywide Home Loans. In all those cases, however, the net notional values of the swaps were reduced considerably by hedging.

For example, Turkey was the leader in gross notional credit default swaps, at $188.6 billion, but its net notional exposure after hedging was $7.6 billion.

D.T.C.C.’s figures are available at Deriv/SERV on the D.T.C.C. Web site.

D.T.C.C. said that after this week the data would be shown in two sections. The first section shows the outstanding notional values at a given point in time (the end of each week). Starting next week, the second section will show data relating to the weekly confirmed trade volume, or “turnover,” with respect to the same underlying reference entities and indexes, as well as similar aggregations of such data.

The financial industry is trying to counter lawmakers, regulators and other critics who argue that the lack of transparency in the market for credit default swaps made the financial crisis worse.

“Publishing this data will provide greater transparency in a critical market,” said Tim Ryan, president and chief executive of the Securities Industry and Financial Markets Association, in a statement Tuesday. “This is an important initiative upon which the industry will continue to build.”

The collapse of Lehman Brothers contributed to a sharp drop in financial markets last month because no one knew how many credit default contracts were outstanding on the securities firm. Estimates ranged as high as $400 billion, although the actual amount turned out to be $72 billion, the DTCC said.

Comments: Well, its a very good start. Once you know the figures, its not a guessing game anymore. Then you isolate the top contracts and assess their likelihood of default. As we can see most of the trouble companies have been absorbed by other companies. There is one main danger I see, that is GE Capital, which will work its way back to General Electric. Its still a AAA company but if you were to examine its way of doing business, its a highly leveraged way, and more than 60% of profits are from the 100-200 basis points financing spread that they use to do business with clients, be it funding them or funding the transactions - e.g. consumer loans or even aircrafts (you want to buy an aircraft, let me lend you 90%).

As for country defaults, while its hyped up, only Iceland risk real default and maybe Turkey and Venezuela. The rest have to just tighten their balance sheets, get some billions from IMF and get on with it. Even Russia's demise is not exactly catastrophic, its bad no doubt, but not debilitatingly so.

Just a heads up, I am quite nervous on GE's near term prospects. Its $15 billion capital raising a few weeks back should raise alarm bells. Ratings agencies are again probably too slow to look deeply into how GE's business model is affected by the cascading impact on de-leveraging.

p/s photos: Izumi Mori