Where the World's Strongest Banks Are: Not the U.S., Not Europe

From New York

Not even one U.S. bank made the cut of the world's strongest financial institutions in an analysis conducted by Jupiter, Fla.-based Weiss Ratings.

Latin America is home to the strongest banks overall, according to the Weiss ranking, while Europe and Asia, along with one embattled U.S. financial giant, dominated a ranking of the world's weakest banks.

It’s Europe that really worries Weiss researchers, as well as just about every other person following the global markets.

"Our analysis underscores just how severe Europe's financial crisis is despite imposed austerity measures, while financial institutions in emerging markets have largely bypassed the recurring debt crises of recent years,” notes Weiss Ratings' senior banking analyst Gene Kirsch. “And, with fears over a euro breakup mounting, European banks could easily face a new and more tumultuous round of financial troubles."

The company says that five European countries in particular -- Portugal, Ireland, Italy, Greece and Spain -- are home to a large number of the worst-performing banks in the world. According to Weiss, 75 of 206 major banks surveyed -- about 42% -- call one of the so-called “PIIGS” countries home, along with France and Germany. Each of those 75 banks receives a bottom scraping D+ rating from Weiss.

Japan shares the ignominy of highlighting the globe's underperforming banks. Half of its 32 big banks also received a D+ ranking or worse.

As for the U.S., 17 banks appeared on the Weiss global banking list, but only one made a "top" list, and it was for the bottom rung of banks. Bank of America (Stock Quote: BAC), received a D+ rating, right between Credit Agricole of France and Mizuho Financial of Japan among the world's weakest banks.

Bank of America reported return on equity of -1.5 percent for 2011, which is well below the industry average of 10 percent, according to the Weiss report. Reduced profitability due to prior bad loans and restructuring of nonperforming businesses was the primary factor in determining the bank's D+ rating.

Here are the Weakest Global Banks:

1. Deutsche Bank (Germany)

2. Barclays (U.K.)

3. Royal Bank of Scotland (U.K.)

4. Credit Agricole (France)

5. Bank of America (U.S.)

6. Mizuho Financial (Japan)

7. Banco Santander (Spain)

8. Societe Generale (France)

9. Lloyds Banking (U.K.)

10. UniCredit (Italy)

Here are the Strongest Global Banks:

1. Banco do Brasil (Brazil)

2. Hang Seng Bank (Hong Kong)

3. Turkiye Garanti (Turkey)

4. Qatar National Bank (Qatar)

5. AKBank (Turkey)

6. Bank Mandiri (Indonesia)

7. Al Rajhi Bank (Saudi Arabia)

8. Grupo Financiero Santander (Mexico)

9. Samba Bank (Saudi Arabia)

Latin America and the Middle East had the strongest showing, thanks in part to a smaller scale of banking operations.

With a more focused lending and investing strategy, smaller banks in nations undergoing rapid growth and industrialization were able to remain stable and prosper despite the global economic crises that began in 2008, according to the Weiss analysis.

With most of the world's banking weakness comign from the huge economic forces of Europe and Asia, it's no surprrise that the global economy has been on the skids. 

Coment: In the financial world, all that is solid can turn to dust