NEW YORK: Corporate-reputation research firm Rating Research (RRC), has released its first reputation ranking of the commercial banking sector.
Although no bank received the highest possible ranking of AAA, Chicago-based Northern Trust Corporation and Cincinnati-based Fifth Third Bancorp topped the list by receiving the survey's second-highest ranking of AA, which is considered a "high quality" ranking.
This is the fourth industry survey released by RRC. The firm, which was founded by some former analysts of credit-rating agency Moody's, has developed a methodology to rank companies' reputations using the opinions of industry thought leaders. The firm has also ranked the pharmaceutical, retail, and electric-power industries.
The bank survey also found that perceived "poor ethical" behavior by the industry's largest players, including Citigroup and JP Morgan Chase, has impaired the companies' ratings. Citigroup received a BBB rating, which is described as "medium quality," while JP Morgan received a BB, which is considered "below medium quality." The companies' reputations were hurt by reports linking them to the Enron scandal.
"Financial stability emerged as an important reputation driver for the banks," said Jane Barr, a principal at RRC. "But, a number of the component characteristics that were associated with this dimension are somewhat surprising, and differ from other industries we have rated."
The survey found that components associated with financial stability in the banking industry included trustworthiness, CEO leadership, and quality of management.
Other factors that impinged on the ratings were the ability to withstand downturns and effective risk management.
Fifth Third Bancorp AA
Northern Trust Corporation AA
State Street Corporation A
Sun Trust Banks A
Washington Mutual A
Wells Fargo & Company A
* AA - high quality reputation; A - upper-medium quality. Source: Rating