Bank Watch List

Balance sheets and financial results-based evaluations are, by nature and definition, backward-looking. To overcome this, we introduced a forward-looking element called the “Bank Watch List” into the strongest bank evaluation.

It identifies and considers the impact of specific evaluation parameters on balance sheet strengths, should macro-economic and business conditions change. By identifying the parameters and institutions that are most likely to be impacted by such changes, we aim to provide a holistic 360 degree view of the ranking without materially changing the composition of the scorecard. The identification and setting of the parameters are based on The Asian Banker research team’s analysis of past performance as well as outlook of the banking sector in the region going forward.

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2021

2020 2019 2018

Strength Rank 2021	AB 500 Rank 2021	Commercial Bank	Country	Gross NPL Ratio (%)	Loan Loss Reserves to Gross NPLs (%)
492	421	Janata Bank	Bangladesh	22.6	32.9
338	222	IDBI Bank	India	22.4	93.0
451	359	Sonali Bank	Bangladesh	18.3	67.7
446	189	Central Bank of India	India	16.6	65.4
445	231	Yes Bank	India	15.4	65.7
304	55	Punjab National Bank	India	14.3	63.2
478	253	Suruga Bank	Japan	14.2	48.0
500	385	Bank of Huludao	China	13.9	32.4
417	102	Bank of India	India	13.8	74.4
457	386	Punjab & Sind Bank	India	13.8	73.0
361	69	Union Bank of India	India	13.7	68.9
361	437	DBS Bank India	India	13.0	75.0
283	498	Bank of Punjab	Pakistan	13.0	90.2
489	413	Agrani Bank	Bangladesh	12.5	64.2
217	397	United Bank	Pakistan	12.3	93.1
499	487	Rupali Bank	Bangladesh	11.8	42.4
310	230	Indian Overseas Bank	India	11.7	70.0
50	301	Halyk Bank	Kazakhstan	11.1	70.9
235	456	Commercial Bank of Ceylon	Sri Lanka	10.9	49.8
413	292	Philippine National Bank	The Philippines	10.8	47.4
107	485	Subsidiary Bank Sberbank of Russia	Kazakhstan	10.3	98.5
298	375	Bank of Ceylon	Sri Lanka	10.3	59.1

Source: TABInsights, S&P Global Market Intelligence

What does it mean to be in the Bank Watch List?
In this year’s ranking, we have identified gross non-performing loan (NPL) ratio (above 10%) and loan loss reserves to gross NPLs ratio (below 100%) as key parameters that will impact financial strength. The “Bank Watch List” is a tool to monitor and review the parameters to give a holistic view of the financial strengths of the institutions under evaluation. This is the first iteration of what we think will be a powerful tool for the industry to benchmark financial strength and will be continuously enhanced.

Who are in the Bank Watch List?
The weighted average gross NPL ratio of the 500 largest banks in Asia Pacific was only up from 1.53% in 2019 to 1.62% in 2020, as the continued COVID-19 relief measures resulted in delayed recognition of problem loans. Banks’ gross NPL ratios will rise further once relief measures are withdrawn and the number of banks on Bank Watch List will likely increase.

In addition to banks from Bangladesh, India, Japan and Pakistan, this year’s Bank Watch List also includes banks from China, Kazakhstan, Sri Lanka and the Philippines. IDBI Bank recorded the highest gross NPL ratio among Indian banks, at 22.4%, followed by Central Bank of India and Yes Bank. DBS Bank India reported a considerable deterioration in gross NPL ratio after its takeover of troubled Lakshmi Vilas Bank, rising to 13% from 2.6% in the previous year. UCO Bank was removed from the list as its gross NPL ratio improved to 9.67%. China’s Bank of Huludao had the worst asset quality among Chinese banks and its gross NPL ratio stood at 13.9%, above the average in China of 1.5%.