#AceFinanceReport – NEW YORK, July 30, 2015 /PRNewswire/ — Today, Bloomberg Markets magazine released its annual ranking of the world’s strongest banks. Hong Kong-based Hang Seng tops the list for the second year in a row, followed by Norinchukin Bank (Japan) and Oversea-Chinese Banking (Singapore).
Bloomberg’s Alfred Liu and Elena Logutenkova write, "The invigorating powers of snake soup aside, Hang Seng is benefiting from rising wealth in Hong Kong and mainland China. It’s one of six Asian banks in Bloomberg’s top 20–five of them in the top 10. Japan’s Norinchukin Bankrepeats in second place, after having tied for that spot a year ago. Singapore’s Oversea-Chinese Banking is No. 3 in our fifth annual ranking of lenders whose assets total $100 billion or more. Two other Singapore banks are ninth and 10th.
Across Asia, the International Monetary Fund expects gross domestic productgrowth to average 5.6 percent this year, triple the European Union’s 1.8 percent. And Asia’s rich are getting richer. The 4.69 million individuals in the Asia-Pacific area with at least $1 million in assets boosted their combined wealth 11 percent last year to a total of $15.8 trillion, the fastest pace in the world, Royal Bank of Canada and Cap Gemini say. "Asian banks stand out because of the huge wealth creation in the region," says Arthur Kwong, head of Asia-Pacific equities at BNP Paribas Investment Partners in Hong Kong. "A lot of the banks are well capitalized."
THE TOP TEN:
1. Hang Seng (Hong Kong)
2. Norinchukin Bank (Japan)
3. Oversea-Chinese Banking (Singapore)
4. National Commercial Bank (Saudi Arabia)
5. Desjardins Group (Canada)
6. Capital One Financial (U.S.)
7. Qatar National Bank (Qatar)
8. OP Financial Group (Finland)
9. DBS Group Holdings (Singapore)
10. United Overseas Bank (Singapore)
MORE ON THE STRONGEST BANKS:
-NORTH AMERICA: The Canadian Imperial Bank of Commerce is the only North American bank to appear in the rankings every year. The U.S. has three entries: newcomer Capital One Financial in McLean, Virginia, at No. 6; No. 14, Citigroup; and No. 15, Winston-Salem, North Carolina-based BB&T, the ninth-largest U.S. commercial bank by assets. New York-based Citigroup, the world’s twelfth-largest bank in terms of assets in the ranking period, is the only large global lender among the 20 strongest. The biggest U.S. banks by assets, led by JPMorgan Chase and Bank of America, didn’t make the list.
-ASIA: Four Asian banks have appeared on the list every year: Hang Seng Bank (Hong Kong), Oversea-Chinese Banking (Singapore), DBS Group Holdings (Singapore) and United Overseas Bank (Singapore).
-EUROPE: Europe tied Asia with six lenders in the top 20–thanks primarily to Nordic banks. Sweden’s regulator has been raising capital requirements for the biggest banks since 2011.
To identify the world’s strongest banks, Bloomberg evaluated public and private banks with total assets of $100 billion or more as of June 1. The banks were evaluated in five categories. The ratio of a bank’s Tier 1 capital to its risk-weighted assets accounted for 40 percent of each bank’s overall score. The ratio of nonperforming assets to total assets got a weighting of 20 percent, as did the ratio of reserves for loan losses to nonperforming assets. The ratio of deposits to funding accounted for 15 percent of the score. And the efficiency ratio, which compares costs with revenues, received a 5 percent weighting.