NEW YORK – Just three U.S. institutions are among the 20 strongest banks in the world, according to new rankings from Bloomberg Markets magazine.
Fifth Third Bancorp (No. 7), JPMorgan Chase & Co. (No. 14) and Citigroup (No. 16) made the list, which ranks institutions with at least $100 billion of assets. It weighs and combines five criteria, including Tier 1 capital compared with risk-weighted assets; nonperforming assets compared with total assets; and efficiency, a comparison of costs against revenues
Oversea-Chinese Banking Corp. ranked first, one of three Singaporean banks to make the top six. “Singapore banks would score very high here largely because, historically, the Monetary Authority of Singapore has always required Singapore banks to keep more Tier 1 capital than other banks,” David Conner, OCBC’s chief executive, told American Banker, an affiliate of Credit Union Journal.
Svenska Handelsbanken AB of Sweden was No. 2. Canada figured prominently in the rankings, with National Bank of Canada No. 3, and four other banks in the top 20.
Hugh Young, a Singapore-based managing director of Aberdeen Asset Management Asia Ltd., which owns about 6% of OCBC, said he is not surprised that Singaporean banks score so highly on a global ranking.
“They don’t do the stupid things Western banks do,” Young said. “They don’t do things like lending 120% of the value of a property to people without a job, and they don’t do stupid things in the derivatives markets and proprietary trading.”
