Singaporean banks are the world’s strongest

Two Singaporean banks lead Bloomberg Markets’ second annual ranking of the world’s strongest banks.

The honour belongs to Oversea-Chinese Banking Corporation, which retained the title of the world’s strongest bank for the second straight year, and by BOC Hong Kong Holdings Ltd in second place.

Two other Singaporean banks were also among the strongest: United Overseas Bank, Ltd at Number 7 and DBS Group Holdings, Ltd at Number 8.

“Singapore’s economy has performed quite stably and quite well, and for the Singaporean banks, we have real economic activities to finance,” said OCBC CEO Samuel Tsien. He credits the bank’s strength partly to its risk management practices.

For the rankings, Bloomberg considered only banks with at least US$100 billion in assets. Bloomberg weighed and combined five criteria, comparing Tier 1 capital with risk-weighted assets, for example, and nonperforming assets with total assets.

Tier 1 capital includes a bank’s cash reserves, outstanding common stock and some classes of preferred stock, all of which combine to act as a buffer against losses.

Canadian banks were also among the world’s strongest. Canadian Imperial Bank of Commerce was No. 3 followed by three other Canadian banks: Toronto-Dominion Bank, Number 4; National Bank of Canada, Number 5 and Royal Bank of Canada, Number 6, which is Canada’s largest bank.

Only three U.S. banks were in the top 20: JPMorgan Chase, Number 13; PNC Financial Services Group Inc., Number 17 and BB&T Corporation, Number 20.

Four European banks were included: two from Sweden and one each from the UK and Switzerland.