“When the crisis erupted, we realized we had stuck to a fairly basic rule, which was that the bulk of Tier 1 capital had to be in equity. That turned out to be very, very important.”
-Jamie Dickson, Superintendent, OSFI (Canada’s bank regulator)
Bloomberg Markets has a list of the world’s strongest banks — they are dominated by Canada and Singapore firms.
Why Canada? Regulators there set strict criteria on the quality of banks’ assets and reserves. Canadian banks don’t use a lot of leverage, and are required to hold 75% of their capital in equity.
Here is the top 10 list:
1. Oversea-Chinese Banking Corp OCBC (Singapore)
2. BOC Hong Kong Holdings Ltd. (Hong Kong)
3. Canadian Imperial Bank of Commerce CIBC (Canada)
4. Toronto-Dominion Bank TD (Canada)
5. National Bank of Canada (Canada)
6. Royal Bank of Canada (Canada)
7. United Overseas Bank Ltd. (Singapore)
8. DBS Group Holdings Ltd. (Singapore)
9. Hang Seng Bank
10. Svenska Handelsbanken (Sweden)
Other Canadian banks made the list, such as Bank of Nova Scotia ranked 18th, and Bank of Montreal was 22nd.
Only three U.S. banks — JPMorgan Chase (JPM) (No. 13), PNC Financial Services Group Inc. (PNC) (No. 17) and BB&T Corp. (BBT) (No. 20) made the top 20.
Canadians Dominate World’s 10 Strongest Banks
Doug Alexander and Sean B. Pasternak
Bloomberg Markets Magazine, May 2, 2012