That’s according to Bloomberg’s first-ever international bank ratings, entitled The World’s Strongest Banks.
Canada has five banks in the top 20, with CIBC ranking 4th internationally behind National Bank.
Canadian banks have “higher capital ratios than anyone else in the world,” Canaccord Genuity analyst Mario Mendonca told Bloomberg, calling this distinction a “source of pride” for Canadians.
Singapore’s Oversea-Chinese Banking Corp. took the top spot worldwide.
Bloomberg reporter, John Curran, says the rankings were “created by Bloomberg statisticians in consultation with Bloomberg’s banking team.” They include banks with over $100 billion in assets.
National Bank Pres. & CEO Louis Vachon told Bloomberg: “…size is not everything in financial services,” and indeed it’s not. National Bank’s #1 North American ranking shows that prudent risk management and liquidity are meaningful and a source of confidence for investors and customers alike.
In a separate statement yesterday, Vachon added, “The Financial Group prides itself on having a strict capital and risk management policy, which has enabled us to stay the course despite the economic turmoil of recent years.”
Sidebar: Banks’ Tier 1 capital ratio carries the greatest weight (40%) in Bloomberg’s rankings. Tier 1 capital is “the most important measure of financial strength,” says Bloomberg, and is “a shock absorber against losses when the economy hits a rough patch.”
Other ranking criteria included non-performing assets, loan-loss reserves, deposits-to-funding, and cost efficiency.
Rob McLister, CMT
Last modified: April 26, 2017
Considering that TD Bank is one of the few banks in the world (and I believe the only remaining bank in Canada) that carries a triple-A rating from S&P, I would have expected it to be near the top. But National Bank?!!
Interesting that Scotiabank is conspicuously absent from the list.
My confidence is S&P’s rating dropped every since the collapse of the Lehman’s brothers.
And rightfully so. Most of the debt rating agencies did a notorious job awarding triple-A ratings to mortgage portfolios that in reality were total junk.
Makes you wonder why they exist?? haha.
A source of Canadian pride it is to see a healthy showing on the list. What I find most interesting on the list is Citigroup at number 16, I suppose it would help bolster numbers when you receive a $45bn direct bailout injection from the Federal Gov’t when times are tough. In return the Gov’t/taxpayers smartly profited $12.3bn from the sale of warrants to purchase common shares in turnaround. Some notable media comments about Citi Management Style:
• Timothy Geithner, US treasury secretary, could have done more to clamp down on excesses at Citigroup while he was president of the Federal Reserve Bank of New York and failed to understand Lehman’s problems until it was too late.
• Executives at Citigroup and American Insurance Group, two of the largest recepients of taxpayer bailout funds, were blind to the risks they were taking and managers at Merrill Lynch failed to recognise the gravity of their situation.
it’s a US govt mandated regulatory monopoly started around the 70s