If safety is your thing when investing in a bank stock, then Global Finance has a list for you: The magazine has issued its annual ranking of the world’s safest 50 banks, with impeccable timing given concerns that the world is teetering on the edge of another financial crisis.
You might expect to see a number of Canadian banks sitting atop of the list, what with their credentials proven during the 2008 downturn. But no: Royal Bank of Canada is the highest ranked among its Canadian Big Bank peers, at No. 11. Still, the good news is that all of the biggest five banks cracked the top 50: Toronto-Dominion Bank came in at No. 13. Bank of Nova Scotia at No. 18, Bank of Montreal trails at No. 30 and Canadian Imperial Bank of Commerce at No. 31.
As well, Caisse Centrale Desjardins, a cooperative owned by the Fédération des caisses Desjardins du Québec, also made the list, at No. 20.
So which banks scored higher? Germany’s KfW Bankengruppe scores the top ranking, although investors are limited to its bonds rather than shares. France’s Caisse des Depots et Consignations ranks second, although again, no shares for you.
Indeed, from what we can gather, publicly traded banks are a rarity in the top 10, with Spain’s Banco Santander squeaking in at No. 10, just above Royal Bank of Canada. But in terms of share performance, investors seem to have a very different opinion here: Santander shares have fallen 33.2 per cent over the past three years, while Royal’s are up 22.6 per cent – in both cases after factoring in dividends.
As for U.S. names, Bank of New York Mellon was the top-ranked, at No. 24. JPMorgan Chase & Co. was No. 34 and Wells Fargo & Co. was No. 36. So, if you limited your view to North American banks only, six of the top seven spots would be filled by Canadian banks.
Global Finance selected the top 50 by evaluating long-term credit ratings from Moody’s, Standard & Poor’s and Fitch along with the total assets of the 500 largest banks worldwide.