Top Banks List
The World’s Best Developed Market Banks 2010
Last month the Global Finance magazine announced the awards for the best banks in the developed world for this year. The winners were selected in 25 countries excluding Ireland and Iceland.
From the magazine report:
“All selections were made by the editors of Global Finance, after extensive consultations with bankers, corporate financial executives and analysts throughout the world. In selecting these top banks, we considered factors that range from the quantitative objective to the informed subjective. Banks were invited to submit entries supporting their selection. Amid nominally objective criteria were growth in assets, profitability, geographic reach, strategic relationships, new business development and innovation in products. Subjective criteria included the opinions of equity analysts, credit rating analysts, banking consultants and others involved in the industry.”
The World’s Best Developed Market Banks for 2010 are:
Source: Global Finance
Among the banks in the U.S., one of the four supers JP Morgan Chase (JPM) was ranked the best bank. After last year’s low in March Chase has rebounded well and closed at $42.81 yesterday.Royal Bank of Canada(RY), the winner from Canada has a 3.45% dividend yield now.The bank is a consistent long-term performer.
Some of the notable top ranked banks in Europe were ING(ING) of Belgium, Danske Bank (OTC: DNSKY) of Denmark, BNP Paribas(OTC: BNPQY) of France and Deutsche Bank(DB) of Germany. Santander(STD) of Spain was the winner in both Spain and the UK.
Santander rebranded the British banking brands Abbey National, Alliance & Leicester and Bradford & Bingley under the Santander name this year.Santander has about 1,300 branches in the UK. While its competitor Societe Generale(OTC: SCGLY) is still suffering from losses, BNP Paribas survived the credit crisis and remains strong. Its fourth quarter earnings more than doubled but the bank raised its dividend by 50%.
DBS Group Holdings (OTC: DBSDY) of Singapore currently pays a 3.99% dividend.
Top 25 U.S. Bank Stocks To Consider
The Bank Director magazine has published the results of the 2009 Bank Performance Scorecard which ranks the top 150 banks in the U.S.
In an article titled “Home Run Hitters: Results of the 2009 Bank Performance Scorecard” the magazine noted:
“In what’s been one of the toughest years in banking, institutions that played it fiscally conservative ended up batting a thousand on our annual performance rankings.
Glancing at the performance rankings of the nation’s largest 150 banks this year, it’s not hard to spot trouble. Nearly half of the banks lost money over a 12-month period ended June 30, 2009, a cruel reminder that many financial institutions are still paying dearly for the shaky underwriting conducted during the credit bubble earlier this decade.
Yet a look at the top banks tells a different story. Despite the upheaval of bank balance sheets across America, there are many financial institutions still going strong, especially ones that adhere to a basic formula for successful banking: lend money to low-risk borrowers, keep a lid on expenses, and dominate local market share.
Once again, plain vanilla banking won out over the growth-at-any-cost mentality, according to our annual Bank Performance Scorecard. Based on measurement criteria and analysis complied by Sandler O’Neill & Partners LP, a New York-based investment banking firm that specializes in the financial services industry, the Scorecard usually includes repeat performers that generate high ranks in boom times and bust.”
The following criteria were used to rank the banks:
- Banks must have assets of $3B and higher
- Profitability
- Capital Adequacy
- Asset Quality
The data from the last two quarters of 2008 and the first two quarters of last year were analyzed for this review.
Top 25 U.S. Bank Stocks from Bank Director’s 2009 Bank Performance Scorecard:
| Rank | Bank Name | Ticker | Tier 1 Ratio % |
|---|---|---|---|
| 1 | First Financial Bankshares | FFIN | 17.36 |
| 2 | Bank of the Ozarks | OZRK | 15.74 |
| 3 | Glacier Bancorp | GBCI | 14.41 |
| 4 | Westamerica Bancorp | WABC | 14.57 |
| 5 | Republic Bancorp | RBCAA | 16.75 |
| 6 | Bank of Hawaii Corp | BOH | 12.56 |
| 7 | International Bancshares Corp | IBOC | 16.64 |
| 8 | 1st Source Corp | SRCE | 15.62 |
| 9 | CVB Financial Corp | CVBF | 15.10 |
| 10 | Signature Bank | SBNY | 15.26 |
| 11 | Northern Trust Corp | NTRS | 12.60 |
| 12 | Trustmark Corp | TRMK | 13.50 |
| 13 | NBT Bancorp | NBTB | 11.00 |
| 14 | Community Trust Bancorp | CTBI | 12.92 |
| 15 | Capitol Federal Financial | CFFN | 22.90 |
| 16 | State Street Corp | STT | 14.49 |
| 17 | SVB Financial Group | SIVB | 13.89 |
| 18 | BancFirst Corp | BANF | 13.12 |
| 19 | Oriental Financial Group | OFG | 14.62 |
| 20 | Bank of New York Mellon Corp | BK | 12.48 |
| 21 | FirstMerit Corp | FMER | 11.38 |
| 22 | Hudson City Bancorp | HCBK | 20.67 |
| 23 | Simmons First National Corp | SFNC | 13.58 |
| 24 | UMB Financial Corp | UMBF | 13.40 |
| 25 | Cullen/Frost Bankers | CFR | 10.91 |
First Financial(FFIN) of Texas ranked the No.1 in the Scorecard this year. The bank operates 50 locations in west and north Texas. First Financial bankers know their customers well and can detect problems with loans in the early stages. The bank was ranked high consistently in the rankings especially in profitability measures. Currently FFIN pays a 2.66% dividend.
Bank of Ozarks (OZRK) based in Arkansas, jumped from 12th rank last year to second rank this year. Ozarks has 72 branches in Arkansas, metropolitan Dallas, and the Texarkana metropolitan area. Bank of Ozarks got $75M from the TARP in 2008 but repaid it in the last quarter of 2009. The current yield of OZRK is 1.91%.
Last year’s No.1 bank in the Scorecard, Montana-based Glacier Bancorp (GBCI) came in at third spot this year. Glacier experienced rise in nonperforming assets which reached 3.92% in 2nd quarter 2009. The higher NPAs was due to the deterioration in its construction and development portfolio in Boise,ID. However Glacier raised $78M in an equity offering in 4Q, 2008 during the credit crisis and is well capitalized to weather the storm.
Westamerica Bancorp(WABC) of San Rafael, California and Republic Bancorp(RBCAA) of Louisville, Kentucky took the 4th and 5th spots this year.
You can download the complete 2009 Bank Performance Scorecard results here.
Strongest Banks in Asia-Pacific and The Middle East
From a report last October by The Asian Banker, the following are the strongest banks in the Asia-Pacific and the Arab Middle East. These rankings were based on the aggregate score that was calculated using many financial performance indicators.
Asia Pacific’s Strongest Banks
AP500 Aggregate
Strength Commercial Bank Country Strength
Rank 2009 Score 2009
1 HDFC Bank India 3.99
2 Punjab National Bank India 3.91
3 Public Bank Malaysia 3.84
4 Bank Central Asia Indonesia 3.83
4 Bank of Nanjing China 3.83
6 ANZ Panin Bank Indonesia 3.78
7 China CITIC Bank China 3.76
8 ANZ National Bank New Zealand 3.70
8 Union Bank of India India 3.70
10 Westpac Banking Corporation Australia 3.68
The Arab Middle East’s Strongest Banks 2009
Strength Commercial Bank Country Score
Rank
1 Commercial Bank of Qatar Qatar 4.05
2 Qatar National Bank Qatar 4.04
3 First Gulf Bank United Arab Emirates 4.01
4 Ahli Bank Qatar 3.79
5 Bank Muscat Oman 3.76
6 National Bank of Abu Dhabi United Arab Emirates 3.73
6 Saudi British Bank Saudi Arabia 3.73
8 Banque Saudi Fransi Saudi Arabia 3.61
9 International Bank of Qatar Qatar 3.60
10 Union National Bank United Arab Emirates 3.59
The Best and Worst Banks in the U.S.
Sixteen banks have failed so far this year. 1st American State Bank of Minnesota of Hancock, Minnesota was the latest bank to be shut down yesterday. In the past few years investing in bank stocks have gotten tricky as many of them have been battered by the credit crisis. However there are some high quality banks which continue to remain strong and pay dividends.
The Forbes magazine published a list of America’s best and worst 100 banks last month.
These banks were ranked on the following factors:
- Return on average equity
- Net interest margin
- NPLs as a percentage of loans
- NPAs as percentage of assets
- Reserves as a percentage of NPLs
- Two capital ratios (Tier 1 and risk-based)
- Leverage ratio
The size of the banks selected ranged with assets of $5.2B to $2.3T. Investors can use the Forbes list as a starting point to identify potential candidates for investment opportunities.
The Five Best Banks are:
Bank of Hawaii(BOH)
Current Dividend Yield: 4.13%
UMB Financial (UMBF)
Current Dividend Yield: 1.97%
Commerce Bancshares (CBSH)
Current Dividend Yield: 2.45%
Prosperity Bancshares(PRSP)
Current Dividend Yield: 1.59%
SVB Financial(SIVB)
Current Dividend Yield: N/A
The Five Worst Banks are:
Capitol Bancorp (CBC)
Sterling Financial (STSA)
R & G Financial
W Holding (WHI)
Flagstar Bancorp (FBC)
The highest ranked bank in this list was Bank of Hawaii(BOH). This conservative bank had a non-performing loan ratio of just 1.2% of total loans in the last quarter. Bank of Hawaii also declined TARP funds from the Federal government. Many of the banks that declined TARP funding actually increased lending. Another bank that is noted in the article is Capital Bancorp (CBC) of Michigan.”The bank has a presence in 17 states, but has been badly hurt by the severe economic problems of its home state. Its capital ratios of 8.4% (Tier 1) and 11.2% (risk-based) are both sixth worst among the 100 largest banks. The bank is divesting businesses in six states, including problem areas like California and Ohio to boost its capital ratios and improve its balance sheet.”
The Banker: Top 500 Banking Brands of 2010
The Banker magazine has released the Top 500 Banking Brands of 2010. The top 10 banks are listed below.
“The methodology employed by Brand Finance in this Top 500 Banking Brands listing uses a discounted cash flow (DCF) technique to discount estimated future royalties at an appropriate discount rate, to arrive at a net present value (NPV) of the trademark and associated intellectual property: the brand value.”
Top 10 Global Banking Brands for 2010 listed in ascending order:
1. HSBC (HBC)
2. Bank of America (BAC)
3. Santander (STD)
4. Wells Fargo (WFC)
5. Citi (C)
6. BNP Paribas (OTC: BNPQY)
7. Goldman Sachs (GS)
8. Chase (JPM)
9. Banco Bradesco (BBD)
10. Barclays (BCS)
The highest ranked banking brand is HSBC Holdings of the UK. Bank of America of the US and Santandar of Spain came in at the second and third places.Among the emerging bank, Brazil’s Banco Bradesco and Banco do Brasil, India’s State Bank of India and China’s CBC, China Construction Bank and Bank of China all increased their brand values.
The complete list of 500 banking brands can be downloaded here.
The Big Four Australian Banks Look for Growth Overseas
According to an article in The Banker magazine, the big four Australian banks have to look outside of Australia for growth.The big four banks in Australia are ANZ (OTC: ANZBY), Commonwealth Bank (OTC:CMWAY), National Australia Bank (OTC:NABZY) and Westpac(WBK). As the domestic market is dominated by these four banks they are more likely to depend on growth in foreign markets especially in Asia.
Some key points from the Banker article:
In the past 18 months the number of second-tier banks has almost halved due to M&A
The Big Four banks hold 73.8% of outstanding mortgages in Australia
ANZ Banking is expanding fast in Asia targeting high net worth retail customers particularly in India and China
“NAB owns Yorkshire Bank and Clydesdale Bank in the UK and community bank Great Western in the US. Westpac has strong retail operations in several Pacific island nations. And CBA owns Fiji’s Colonial National Bank, and has minority stakes in China’s Jinan City Commercial Bank and Hangzhou City Commercial Bank. ”
The current dividend yields of the big four Aussie banks areas follows:
Australia & New Zealand Banking Group Ltd (OTC:ANZBY)
Current Dividend Yield: 4.96%
Commonwealth Bank of Australia (OTC: CMWAY)
Current Dividend Yield: N/A
National Australia Bank (OTC:NABZY)
Current Dividend Yield: 5.45%
Westpac Banking Corp (WBK)
Current Dividend Yield: 4.73%
