This year’s honorees prove that hard work pays off with substantial growth in the ranks.

For the commercial banking sector, continuous innovation, strong product and customer service development, and effective risk management are just some of the essential elements needed to sustain and grow a franchise. Banks included in the 50 safest commercial banks continue to demonstrate leadership in their respective markets to earn a place in this year’s ranking.

The interest rate cycle has changed in many jurisdictions as central bank policy has now adopted an easing stance after a period of high interest rates needed to fight inflation. During this time, much of the sector has enjoyed healthy profitability, supported by expanding net interest margins. However, as central banks continue to cut interest rates to maintain economic growth, it remains to be seen how long banks will be able to sustain those margins as successive rate cuts take hold.

To maintain growth and profitability, these institutions must continue to embrace innovation to increase revenue and increase the efficiency of banking operations. In recent years, the sector has focused on enhancing its digital offerings with online and mobile banking platforms to provide customizable solutions and powerful applications with user-friendly interfaces and dashboards to better attract and serve customers. While this involves leveraging large amounts of bank data to identify and target new customers and products, many banks are accelerating this process by using generative AI technology to unlock valuable insights from this data more quickly, for developing new services, automating processes internal. and workflows and enhancing the bank’s risk management capabilities to better manage inherent risks related to cyber security, fraud protection and compliance issues.

In addition to the strong operational performance of many banks, regulatory requirements are also helping to improve capital positions. This has led to improvements in ratings and further movement in our rankings. Australian banks made the biggest of these moves, as Commonwealth Bank of Australia, ANZ Group, National Australia Bank and Westpac each rose 10 places year-on-year to now feature in our top 10. This follows upgrades by Moody’s and Fitch during the first half of 2024, which reflect the implementation of a formal resolution-planning framework that also involved an increase in capital buffers to absorb losses at these banks. This development is intended to ensure the stability of the Australian financial system, as these banks collectively account for over 70% of the banking system’s assets.

In many cases, upgrades to a country’s sovereign ratings have a knock-on effect on their bank ratings, given the government’s increased ability to support the banking sector. In March, Fitch upgraded Qatar’s sovereign rating to AA, subsequently raising the ratings of seven Qatari banks, including Qatar National Bank, which rose 11 places to 31st.

Additional moves following positive rating action include UBS, which climbed eight places in our rankings to 21st following a Moody’s upgrade to Aa2 in May 2024. This upgrade reflected the acquisition of Credit Suisse, which added additional long-term debt that provides loss-absorbing benefits. The bank stabilized the Credit Suisse franchise following its acquisition in 2023.

Building on its leading position as Denmark’s largest bank, Danske Bank rose to 39th place following Moody’s two-notch upgrade of the bank’s long-term debt rating to A1 from A3 in May. This reflected an improvement in governance controls following weaknesses in the bank’s operations in Estonia. Fitch cited this operational fix as well as improved profitability and capitalization as the basis for its upgrade to A+ from A in September 2023. NongHyup Bank was upgraded by Moody’s in November 2023 to Aa3 from A1 and is a new entrant at no. 45.

Methodology: Behind the leaderboard

According to the methodology for ranking the world’s safest banks, commercial banks that are majority state-owned or sponsored by their governments or regional bodies are excluded. Institutions here can operate in the same markets as state-sponsored competitors, but do not receive government support. Additionally, institutions that are wholly owned by their parent company are not eligible under our criteria.