| The Strongest Banks Ranking |
The Criteria We Use |
Our Rationale |
| A strong domestic franchise |
1. Size of deposit base as a % of national total
2. Number of branches as % of total |
We believe that the extent to which a bank is domestically enfranchised is a measure of the strength of the institution as a leading domestic player. Indicators of these include a strong domestic deposit base, branch networks. Such institutions often demonstrate a low operational cost base, access to cheap funding and strong customer relationships. |
| A strong Balance Sheet |
Please refer to our "
" to see the well developed criteria we use for this area of assessment. |
Our assessment of the balance sheet weighs the relative importance of the data on productivity, yoy growth, risk management and stability against each other. |
| Measurable Brand Premium |
The share price over book value |
We believe that the share price of well-regarded financial institutions enjoy a premium over their peers in the marketplace. This premium is an indication of investor support, which in turn is driven by strong performance and investor commitment. |
| Diversified revenue stream |
Number of clear business lines detectable in the annual reports |
A financial institution with a well diversified income base in all of the core areas of commercial banking (strictly excluding non-finance activities) is an indication of stability and diversity to draw from in changing times. |
| Strong contribution of fees to overall income |
Fees as a % of total income |
Fee generation is associated with value creation over and above any advantage that the bank enjoys in the traditional net interest margin business. This is also a proxy for evaluating the service orientation of the business. |
| Consistency of ROE over a three year period |
Variations between the lowest and highest ROEs achieved over the past three years |
We target ROEs as a measure of a range of factors that results in the consistency of profitability, which includes the kinds of stable, long term businesses they pursue, or the ability of their business mix to ensure no strong fluctuations driven by external factors. |
| Quality of leadership |
Our assessment of the leadership provided by either the executive chairman or the CEO, based on
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We believe that strong leadership is a factor that determines the competitive capability of an institution. The quality of leadership is assessed every three years under our Leadership Achievement Programme |
| Strong Governance Structure |
1. The number of independent directors as a % of total on the board
2. The number of directors whose professional background is relevant to the financial services industry. |
By a simple matrix |
The Asian Banker Strongest Banks
