Three of the world’s 20 strongest banks are Canadian, according to data from Bloomberg Markets. The Desjardins Group tied for second place, with Canadian Imperial Bank of Commerce at number 15 and Royal Bank of Canada in 18th place.
Desjardins might be a surprising inclusion for some Canadians, despite ranking highest in North America in Bloomberg’s results. The cooperative bank is an alliance of credit unions, or caisses, based mainly in Quebec, and tied for second overall with Norinchukin Bank of Japan. TD Canada Trust came in fifth in North America, but did not break the top 20 globally. Canada was not the only nation to boast multiple entrants, with Singapore and Germany also taking three spots.
The ranking was based on five factors: Tier 1 capital compared with risk-weighted assets; nonperforming assets against total assets; loan-loss reserves to nonperforming assets; deposits to funding; and efficiency, a measure of costs to revenue. Desjardins, with $212 billion in assets under management, owes its strong performance to solid liquidity, a reflection of its risk-averse business philosophy.
RBC had the best efficiency rating of the three Canuck banks on the list, and has a new CEO and sizeable cash pile to go with its title of the country’s most profitable bank. CIBC scored well in the deposits-to-funding category, but the bank’s second-quarter profits took a hit from losses associated with its Caribbean subsidiary.
Two of the three banks also placed well on another recent list: Canadian Business‘ ranking of Canada’s Best Brands. RBC came in at number 23, and Desjdardins took 17th place on a list where TD topped the financial sector at number 11.
If you’re looking for a safe place to park your money, it seems you could do worse than your local caisse — provided it’s run by Desjardins, that is.