Top 50 Safest Banks In Europe 2020

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Global Finance names the 50 Safest Banks in Europe.


Following a period of some relief during the warmer months, the widely predicted second wave of the Covid-19 pandemic has emerged in Europe. France, Spain and the UK have seen sharp increases in cases and positivity rates since September while Germany has experienced a slower resurgence. Governments are responding with new regulations aimed at containing the virus, including partial lockdowns and limits on social interaction.


Global Finance determined its 50 Safest Banks in Europe at an exceedingly difficult time for the industry, one requiring them to innovate and to control their risk exposure. With the end of the health crisis and full economic recovery likely some way off, the stresses on the banking sector are unlikely to diminish soon. Many institutions are responding by expanding digital platforms, introducing new online products and creating revenue opportunities to counteract margin compression, improving operational efficiency and rationalizing branch networks. Revenue and profitability remain under pressure, given an expected increase in credit costs related to rising loan delinquencies and nonperforming assets, particularly in such heavily impacted sectors as small and medium-sized enterprises (SMEs), tourism and hospitality, retail, energy and airlines, making effective risk management all the more important.


Recognizing the risk of asset quality erosion, governments and regulators have responded with relief measures for banks, including loan forbearance, deferral of interest and extension of debt repayment terms into 2021. Moreover, central banks have launched new loan guarantee programs designed to protect banks from significant credit losses and promote lending at this critical time. France, Germany, Spain, the UK, Italy, the Netherlands and other countries have committed €2 trillion ($2.4 trillion), fully covering loans to SMEs and guaranteeing some large corporate exposures.


More broadly, to address the economic downturn and facilitate credit flow to retail and corporate borrowers, regulators have enacted policies that afford banks greater flexibility with liquidity, capital buffers and collateral requirements. The European Banking Authority has postponed its annual stress test until January 2021 to provide operational relief to the sector. In March, the European Central Bank launched its initial €750 billion Pandemic Emergency Purchase Programme, boosted to €1.35 trillion in June, that provides liquidity by purchasing private and public sector debt. The European Commission, the European Investment Bank and the European Stability Mechanism have made over €540 billion available to help individuals and businesses, and to provide liquidity support for SMEs and larger companies and funds for health care treatments and vaccines.


In the UK, in addition to rate cuts, the Bank of England has suspended capital buffers, potentially releasing £190 billion (about $246.8 billion) for lending, and is promoting lending to SMEs through its Term Funding Scheme and Bounce Back Loan Scheme.


Shuffling The Deck


As banks look to balance the need to shore up their businesses with the prerequisite to keep their balance sheets right-side up, rating agency actions have shuffled the deck, affecting Global Finance’s Safest Banks rankings. Rating upgrades have generally been the result of improvements in bank resolution strategies, loss-absorbing capacity and improved capital buffers. This benefitted BNG Bank, which joins a select group of institutions with triple-A ratings from each of the three major agencies, the others being KfW, Zuercher Kantonalbank and Landwirtschaftliche Rentenbank.


Other banks that rose in the rankings this year include DNB Bank and Komercni Banka (both up 8 places), BPCE (6), Natixis (5), and ING Bank Slaski, the Polish subsidiary of Netherlands-based ING Groep (7).


Some rating downgrades, notably for Societe Generale and Danske Bank, reflect profitability concerns; while operational problems negatively impacted Swedbank as Swedish regulators discovered serious risk management deficiencies in the institution’s anti-money laundering procedures. Revenue and profitability concerns, combined with a planned corporate restructuring, prompted downgrades of HSBC Holdings by Fitch and Standard & Poor’s &P, and of the HSBC France subsidiary by S&P, knocking it down more than ten places.


New entrants to this year’s top 50 include Swedish Export Credit, Credit Industriel et Commercial, and AXA Banque. Belgium’s Belfius Bank benefited from “fallen angels” and Denmark’s Nykredit Realkredit and Jyske Bank rose with upgrades.

 




Europe’s Top 50 Safest Banks





















































Rank

Company Name

Country

Fitch

Moody’s

S&P

Total Score

Assets
($ Mil.)

Statement Date

1

KfW

Germany

AAA

Aaa

AAA

30

568,486

12/31/19

2

Zuercher Kantonalbank

Switzerland

AAA

Aaa

AAA

30

172,514

12/31/19

3

BNG Bank

Netherlands

AAA

Aaa

AAA

30

168,162

12/31/19

4

Landwirtschaftliche Rentenbank

Germany

AAA

Aaa

AAA

30

101,969

12/31/19

5

Nederlandse Waterschapsbank

Netherlands

NR

Aaa

AAA

29

93,559

12/31/19

6

Landeskreditbank Baden-Wuerttemberg (L-Bank)

Germany

AAA

Aaa

AA+

29

87,175

12/31/19

7

Kommunalbanken

Norway

NR

Aaa

AAA

29

51,118

12/31/19

8

NRW.BANK

Germany

AAA

Aa1

AA

27

166,206

12/31/19

9

Swedish Export Credit Corporation

Sweden

NR

Aa1

AA+

26

31,543

12/31/19

10

Caisse Des Depots et Consignations

France

AA

Aa2

AA

24

202,754

12/31/19

11

DZ BANK

Germany

AA–

Aa1

AA–

23

628,410

12/31/19

12

Svanska Handelsbanken

Sweden

AA

Aa2

AA–

23

329,363

12/31/19

13

Banque et Caisse d’Epargne de l’Etat

Luxembourg

NR

Aa3

AA+

23

53,743

12/31/19

14

Banque Cantonale Vaudoise

Switzerland

NR

Aa2

AA

23

49,926

12/31/19

15

Deutsche Apotheker- und Aerztebank

Germany

AA—

Aa2

AA–

22

55,384

12/31/19

16

DNB Bank

Norway

NR

Aa2

AA–

21.5

270,614

12/31/19

17

SFIL

France

NR

Aa3

AA

21.5

76,246

12/31/19

18

Banque Pictet & Cie

Switzerland

AA–

Aa2

NR

21.5

37,932

12/31/19

19

Nordea Bank

Finland

AA–

Aa3

AA–

21

623,320

12/31/19

20

SEB

Sweden

AA–

Aa2

A+

21

306,507

12/31/19

21

Sparkassen-Finanzgruppe

Germany

A+

Aa2

NR

20

1,423,277

12/31/18

22

UBS

Switzerland

AA–

Aa3

A+

20

971,916

12/31/19

23

Rabobank

Netherlands

AA–

Aa3

A+

20

663,481

12/31/19

24

HSBC France

France

AA–

Aa3

A+

20

267,011

12/31/19

25

OP Corporate Bank

Finland

NR

Aa3

AA–

20

73,481

12/31/19

26

BNP Paribas

France

A+

Aa3

A+

19

2,431,852

12/31/19

27

Credit Agricole

France

A+

Aa3

A+

19

2,259,132

12/31/19

28

Swedbank

Sweden

A+

Aa3

A+

19

258,394

12/31/19

29

LGT Bank

Lichtenstein

NR

Aa3

A+

18.5

35,089

12/31/19

30

Groupe BPCE

France 

A+

A1

A+

18

1,503,189

12/31/19

31

Banque Federative du Credit Mutuel

France

A+

Aa3

A

18

640,282

12/31/19

32

Natixis

France

A+

A1

A+

18

576,498

12/31/19

33

ABN AMRO Bank

Netherlands

A+

A1

A

17

420,997

12/31/19

34

BNP Paribas Fortis

Belgium

A+

A2

A+

17

351,845

12/31/19

35

BGL BNP Paribas

Luxembourg

A+

A2

A+

17

63,509

12/31/19

36

Nationwide Building Society

United Kingdom

A

A1

A

16

304,334

4/4/20

37

Komercni Banka

Czech Republic

A

A1

A

16

47,341

12/31/19

38

SBAB Bank

Sweden

NR

A1

A

16

49,358

12/31/19

39

EFG International

Switzerland

A

A1

NR

15.5

50,793

12/31/19

40

ING Bank Slaski

Poland

A+

A2

NR

15.5

41,722

12/31/19

41

Lansforsakringar Bank

Sweden

NR

A1

A

15.5

39,961

12/31/19

42

AXA Banque

France

A

NR

A+

15.5

17,460

12/31/19

43

HSBC Holdings

United Kingdom

A+

A2

A–

15

2,715,152

12/31/19

44

Societe Generale

France

A–

A1

A

15

1,523,679

12/31/19

45

Erste Group Bank

Austria

A

A2

A

15

276,013

12/31/19

46

Nykredit Realkredit

Denmark

A

A3

A+

15

241,216

12/31/19

47

Banco Santander

Spain

A–

A2

A

14

1,709,222

12/31/19

48

Danske Bank

Denmark

A

A3

A

14

563,377

12/31/19

49

Belfius Bank

Belgium

A–

A1

A–

14

193,720

12/31/19

50

Jyske Bank

Denmark

NR

A2

A

14

93,640

12/31/19

Asset figures from Fitch, Moody’s, and company reports. Ratings valid as of Aug. 17, 2020.



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