US investors looking for a broad choice of safe banks to deposit their savings in have to look across the Atlantic, to Europe.
That’s where the majority of safest banks are, according to a recent survey of the World’s 50 Safest Banks by Global Finance. Specifically, all ten banks that topped the list were Europeans, including KfW of Germany, which occupied the first position; and Bank Nederlandse Gemeenten of Netherlands, which occupied the second position.
Only five American banks made it to the list, the same as last year— CoBank ACB, BNY Mellon, US Bancorp, Northern Trust, and Wells Fargo WFC +0.14%. The remaining were from countries scattered around the globe, mostly in Canada, Australia, Singapore, the Middle-East, South Korea and China.
For years, banks were a safe place to park cash, as governments implicitly guaranteed deposits. This premise changed in the aftermath of the Cyprus bailout, as depositors had to shoulder a big chunk of the bailout. That’s why now depositors must search for safe banks—banks with a low counter-party risk. “Counter-party risk is of prime importance to global CFOs and financial executives as economic uncertainty continues to trouble global markets,” says Global Finance publisher Joseph D. Giarraputo. “Global Finance’s Safest Banks ranking provides an independent analysis of each region’s banks that companies can use as a tool to benchmark their counterparties. The institutions that top our ranking of the Safest Banks are those that have shown their strength in times of turbulence.”
Wells Fargo, US Bancorp USB +0.62%, Northern Trust NTRS +0.33%
and BNY Mellon, for instance, have all fared well during the financial
crisis of 2008-9, and continue to display strong financials.
Financials of American Banks
Source: Finance.Yahoo.com
Still, Europe’s lead in the list may come as a surprise to many investors. Didn’t Europe just go through a debt crisis that hurt banks?
Yes, but that was mostly in Southern Europe. Northern and Central Europe escaped the crisis, especially Germany, Netherlands, and Switzerland.
That’s where Europe’s safest banks are concentrated.
A few words of caution: Investors should understand that the majority of European banks are semi-government institutions, and therefore, enjoy the protection of national governments—provided that these governments remain solvent and deposits stay below the official guarantee protection limits.
That’s where the majority of safest banks are, according to a recent survey of the World’s 50 Safest Banks by Global Finance. Specifically, all ten banks that topped the list were Europeans, including KfW of Germany, which occupied the first position; and Bank Nederlandse Gemeenten of Netherlands, which occupied the second position.
Only five American banks made it to the list, the same as last year— CoBank ACB, BNY Mellon, US Bancorp, Northern Trust, and Wells Fargo WFC +0.14%. The remaining were from countries scattered around the globe, mostly in Canada, Australia, Singapore, the Middle-East, South Korea and China.
For years, banks were a safe place to park cash, as governments implicitly guaranteed deposits. This premise changed in the aftermath of the Cyprus bailout, as depositors had to shoulder a big chunk of the bailout. That’s why now depositors must search for safe banks—banks with a low counter-party risk. “Counter-party risk is of prime importance to global CFOs and financial executives as economic uncertainty continues to trouble global markets,” says Global Finance publisher Joseph D. Giarraputo. “Global Finance’s Safest Banks ranking provides an independent analysis of each region’s banks that companies can use as a tool to benchmark their counterparties. The institutions that top our ranking of the Safest Banks are those that have shown their strength in times of turbulence.”
Financials of American Banks
| Bank | Market Cap | Operating Margins (%) | Total Cash | Total Debt |
| Wells Fargo | 269.41B | 43.80 | 328.82B | 237.82B |
| US Bancorp | 75.07 | 45.00 | 13.57 | 55.49 |
| Northern Trust | 16.22 | 27.24 | 22.48 | 5.96 |
| BNY Mellon | 44.76 | 26.01 | 189.38 | 54.28 |
Still, Europe’s lead in the list may come as a surprise to many investors. Didn’t Europe just go through a debt crisis that hurt banks?
Yes, but that was mostly in Southern Europe. Northern and Central Europe escaped the crisis, especially Germany, Netherlands, and Switzerland.
That’s where Europe’s safest banks are concentrated.
A few words of caution: Investors should understand that the majority of European banks are semi-government institutions, and therefore, enjoy the protection of national governments—provided that these governments remain solvent and deposits stay below the official guarantee protection limits.
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