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Scotia Among World's Top 10 Stable Banks Eoin Callan, Financial Post Published: Wednesday, February 04, 2009

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Bank of Nova Scotia has emerged during the credit crisis as one of the top 10 most stable banks in the world, according to a global ranking of the financial sector.

Canada's third-largest bank ranks alongside the likes of Berkshire Hathaway, run by celebrated investor Warren Buffett, as one of the steadiest investments for shareholders, according to the report.

The ranking reflects Scotia's efforts to draw on diverse sources of liquidity and develop sophisticated risk management systems that have held up relatively well during one of the worst financial crisis in decades.

The bank's performance has also been more steady to date because it is less exposed to corners of financial system hardest hit by the credit crisis like the wholesale banking markets in New York and London.

Scotia also performs better than its Bay Street rivals in the unique index because it does not have a retail branch network in the economically-weakened United States, and is instead spread more thinly across emerging markets like Latin America.

The ranking is increasingly closely watched because of the premium investors are placing on steady performance amidst extreme volatility in financial markets.

"If two firms have produced the same absolute return to shareholders, the one whose returns are less volatile is ranked higher," according to Oliver Wyman Group, the consultancy that developed the index.

To some extent, Canada's banking sector has not experienced as severe disruptions as the financial systems of other countries because its shareholder base is dominated by large domestic institutional investors seeking steady returns.

Oliver Wyman's forecast for the year ahead for Canada's banking sector is mixed but relatively rosy.