Cash and Treasury Management: How Well Do You Know Your Bank?

There are many reasons why companies choose to work with one bank over another. Some look at the number of branches and whether there is a branch near their offices and those of their suppliers and customers. Others look at the institution's size, such as its total assets, which in theory signals how stable and perhaps too-big-to-fail it is.

In this infographic drawn from data provided by business intelligence services provider SNL Financial, we put together these and other metrics to give the CFO and treasurer a handy guide into the basic strength of Asia's leading financial institutions.

We include the Tier 1 capital ratio (the higher, the more solid, with 10% seen as the benchmark) and Moody's long term credit rating, denoted by letters and numerical modifiers (1=higher end within category; 2=mid-range; 3=lower end). 

One conclusion: Most banks are investment-grade quality, particularly those in Hong Kong and Singapore. Only one bank is not investment grade, and that is the Philippine National Bank (Ba2: speculative, subject to substantial credit risk, mid-range within the Ba category).

However, this bank boasts a high Tier 1 capital ratio of 16%. 

No bank is awarded the highest rating (Aaa=highest quality, subject to the lowest level of credit risk). The best rated are OCBC and UOB in Singapore (Aa1=high quality, subject to very low credit risk, higher end within the Aa category). 

The highest rated banks in Hong Kong are HSBC and subsidiary Hang Seng Bank (both Aa2).

Some institutions are unrated, such as BOC Hong Kong. This does not necessarily mean they are risky. It only means that these banks have not issued financial instruments that Moody's could assess and rate. 


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