This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Global Banks: The Weakest of Them All

Stocks in this article: DB BCS RBS BAC

By Weiss Ratings

NEW YORK ( TheStreet) -- Weiss Ratings issues ratings for the world's largest banks --adding coverage of 200+ global financial institutions. Using the same quantitative analysis that it applies to domestic institutions, Weiss evaluates five major components of a bank's finances -- capital, asset quality, earnings, liquidity and stability -- to determine an overall Weiss Financial Strength Rating, which ranges from A (Excellent) to E (Very Weak).

According to Weiss' latest study, the world's weakest banks are concentrated in Europe and Asia, while the strongest global financial institutions are based in Latin America, the Middle East and North America. And, some of the weakest banks in the world are among the largest. Perhaps "too big to fail" means too big to manage in adverse times ... maybe in good times too ... we'll have to watch and see.

Deutsche Bank-RG (DB)

Weiss Financial Strength Rating: D (Weak)

Headquarters: Germany

Germany's Deutsche Bank, the largest bank in the world with total assets of $2.8 trillion as of December 31, 2011, is rated D (Weak) by Weiss due to its weak capital position and poor profitability. Its low 1.8% tangible common equity ratio, a measure of capital, is just one-fifth the industry average of 8.4%. In addition, Deutsche Bank earned a return on assets of only 0.1%, a fraction of the industry average of 0.9%. Both figures suggest that the bank has a significantly higher probability of future financial difficulties.

Barclays PLC (BCS)

Weiss Financial Strength Rating: D- (Weak)

Headquarters: U.K.

U.K.-based Barclays PLC, tied for seventh largest bank in the world with total assets of $2.4 trillion, is rated D- (Weak) by Weiss. The bank suffers from weak asset quality, poor profitability and low capital. Barclays' nonperforming loans represent 37.2% of its core capital, which is well above the industry average of 31.5%. Barclays also reported return on assets of 0.2%, well below the industry average of 0.9%.

Royal Bank of Scotland (RBS)

Weiss Financial Strength Rating: D- (Weak)

Headquarters: U.K.

The Royal Bank of Scotland, tied with Barclays for seventh largest global bank with $2.3 trillion in assets, is also rated D- (Weak) by Weiss Ratings. Again, the primary contributor for the bank's weak rating is its poor asset quality. Royal Bank of Scotland's delinquent loans represent nearly 53% of its core capital, which is dramatically worse than the industry average of 31.5%. In addition, the bank reported negative return on assets of -0.2%, well below the industry average of 0.9%.

View the slide show on the World's Weakest Banks.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs