Submitted by: Innovest Strategic Value Advisors, Inc.
Posted: Sep 25, 2007 – 10:05 AM EST
Sep. 25 /CSRwire/ - September 25, 2007 - Innovest Strategic Value Advisors has released updated ratings for the Global Banking Sector, a newly formed sector for the 2007 rating cycle.
The recent implosion of the subprime market has illuminated that many banks have not properly evaluated the risks they have been financing. Key megatrends like consumer overindebtedness, energy security, and tightening environmental regulations are reconfiguring key sectors of the economy. The ratings in this sector evaluate how effectively banks have been measuring their borrowers' exposure to these "next-generation" risks.
"One thing which makes this report unique is that we have ranked banks based in part on the risk levels and performance of the companies they have leant to and invested in. In other words, we've rated them on what they actually do, not just what they say and the sorts of systems they have in place." said senior analyst Greg Larkin. With this report Innovest provides an innovative new tool for investors its Capital Allocation Benchmarking Analysis(TM). This part of the study actually drills down into the banks’ loan books and investment portfolios ---- a first for global ESG analysis.
"Some of the results were surprising," said Larkin, "RBS, which has never stood out for its superior management of environmental and social risk has the strongest oil and gas positions in the global banking sector. Citi, which has made headlines with its own "green" investments, has the highest risk energy and power portfolio in the sector." RBS moved up from BBB to AAA. Citi moved down from AA to A.
Over the past year the top rated banks in this sector outperformed the bottom rated banks by a margin of 17%. "It seems like we have arrived at a critical turning point where a bank’s management of strategic environmental and social megatrends has a tangible impact on share performance." said Larkin.
"The strength of this analysis is that it cuts past banks' green branding and really evaluates whether or not they are managing the environmental and social risks that they finance. I think it is a critical tool for any investor who is concerned about how banks are managing risk."
Downloadable reports for companies in the sector and more are available for purchase through Innovest's partner http://www.csrwire.com/reports/independent
Innovest Strategic Value Advisors is an internationally recognized investment research and advisory firm specializing in analyzing companies' performance on environmental, social, and strategic governance issues, with a particular focus on their impact on competitiveness, profitability, and share price performance.
Innovest currently has offices in New York City, Toronto, San Francisco, London, Paris, Sydney, and Tokyo.