Australia’s banking sector has been rated one of the five safest in the world as profits soar and bad debts decline. Global credit ratings agency Standard & Poor’s has bestowed the ranking on Australia’s banks, despite pointing to a decline in property prices, a hard landing in China and regulatory changes as potential – though unlikely – threats. “We believe that Australia is currently one of the five least-risky banking systems of the 86 for which Standard & Poor’s has published banking industry country risk assessments,” says S&P credit analyst Gavin Gunning. Australia sits alongside Switzerland, Canada, Germany and Hong Kong as the safest banking sectors in the world, according to an S&P report. The report was based on an assessment of both the economic and industry risks confronting banks in each country. Banks in countries such as Belarus, Egypt, Greece, the Ukraine and Cambodia, posed the biggest risks, says S&P. Credit ratings in the Australian banking sector have remained strong and extraordinarily stable by global standards in the aftermath of the global financial crisis, which began over five years ago. In our view, we anticipate a continuation of this trend throughout 2014, the report added.