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Asian banks slide down world rankings

Asian banks slide down world rankings

(10 May 2013 – Singapore) Singapore’s Oversea China Banking Corporation (OCBC) has been knocked off its top spot as the World’s Strongest Bank in the latest rankings.

OCBC held the title for the past two years but dropped to number two in the latest round.

A statement released by Bloomberg Markets has listed the World’s Strongest Banks, ranking Qatar National Bank (QNB) number one.

The ranking of 78 banks worldwide includes some of the largest and most renowned financial institutions in the world.

The ranking is based on five criteria for banks with Total Assets of over US$100 billion: Tier 1 Capital to Risk Weighted Assets with 40 percent weight, Non-Performing Assets to Total Assets with 20 percent weight, Loan Loss Reserve to Non-Performing Assets with 20 percent weight, Deposits to Funding with 15 percent weight, and Efficiency (Cost to Revenue) with 5 percent weight.

The list has been dominated by Asian and Canadian banks for the past several years, however Canada’s banks also fell.

Maybank is ranked number 13 and Chief Executive Abdul Wahhid Omar attributed the ranking to tough supervision by Bank Negara Malaysia, the central bank – and new stress testing and risk-control measures inside the bank.

As the Kuala Lumpur-based lender, which includes an Islamic-banking unit, has expanded, it’s also strengthened its risk management team.

"We needed to make sure that we have the right people with the right skills to manage our risks," the Omar said. "That has been done."

Malaysia started putting into place the so-called Basel III rules, designed to reinforce the capital of big international banks, 1 January ahead of a majority of the 27 members of the Basel Committee on Banking Supervision.

In October, Maybank raised 3.66 billion ringgit ($1.18 billion) from a private placement of its shares to help bolster its capital.

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