The Banker's Latest Rankings Show Chinese Banks Dominate, While Western Europe Catches Up

LONDON, July 2, 2018 /PRNewswire/ --

Europe's banks are starting to recover after several bad years, according to The Banker's latest ranking of the Top 1000 World Banks. But they are no match for Chinese banks which strengthened their grip on the ranking. India's banks were the worst performing.

Western Europe's banks increased their share of global banking profits from 13% to 20% helped by strong performances in France, Germany and the UK and a turnaround in Italy. Major banks such as Italy's UniCredit, the UK's Royal Bank of Scotland and Credit Suisse helped this recovery by moving back into the black after heavy losses. UniCredit climbed 21 places to 24th in the overall ranking with a 79% capital uplift.

Last year European banks held the top ten places in a table of largest losses but this year Indian banks hold six of the ten places. Chinese and Indian banks are a story of contrasting fortunes. For the first time, Chinese banks hold the top four places in the overall ranking based on Tier 1 capital with ICBC remaining top for the sixth year running.

Chinese banks account for four of the top five banks with the highest profits and together make nearly one third of global profits. ICBC grew its capital by $43 billion which is like adding a Standard Chartered or a UBS. Chinese banks together increased their capital by $337bn or 20%.

The other standout country in Asia is South Korea where the banks added $8bn in overall profits, an increase of 81%, close to the total annual profits of either Malaysia or Denmark. The profits uplift of South Korea's banks was the fifth highest in the world. But North Korea -- whose leader Kim Jong Un recently met with US president Donald Trump -- does not have a single bank in the ranking.

The highest losses were in India where the banks turned a $7.9bn profit into a $9.2 bn loss, the largest in the world. India's public sector banks lent excessively and are now paying the price.

The Banker's editor Brian Caplen says: "Finally, after some dismal years in European banking we are seeing a recovery. Losses in Greece and Portugal are much less while France, Germany, the Netherlands, Spain and the UK all saw big increases.

"Chinese banks are increasing their lead in terms of capital and profits putting more distance between themselves and the big American banks. But Indian banks had a terrible year as the central bank pushed them to clean up their balance sheets."

In the other BRIC countries, continuing economic problems in Brazil meant the banks had a flat year while Russia provided the worst performing bank in the ranking. Otkritie recorded the highest losses and the lowest regulatory capital ratio. But Russian banks as a whole performed well with the giant Sberbank increasing profits 47% to be the world's 10th most profitable bank and climbing five places to 31st in the main ranking.

In the Middle East the new regional leader is First Abu Dhabi Bank, as a result of last year's merger,  while Africa's banks delivered the highest returns with a 26% return on capital.

TABLES 

GLOBAL TABLES

  
    Top 10 World Banks
  
        Rank (Previous)   Bank                          Country     Tier 1 Capital ($bn)
       1.    (1.)        ICBC                          China                   324
        2.    (2.)        China Construction Bank       China                   272
         3.    (4.)        Bank of China                 China                   224
        4.    (6.)        Agricultural Bank of China    China                   218
        5.    (3.)        JP Morgan Chase               US                      209
         6.    (5.)        Bank of America               US                      191
        7.    (8.)        Wells Fargo                   US                      178
        8.    (7.)        Citigroup                     US                      165
       9.    (10.)       Mitsubishi UFJ                Japan                   153
         10.   (9.)        HSBC                          UK                      151

  
      Top 5 Biggest Moves from Loss to Profit ($m)
       Bank               Country      Pre-tax profits   Previous        Recovery
        UniCredit          Italy                  7,823  -  10,884          18,706
       RBS                UK                     3,026  -   5,040           8,065
        Banco BPM          Italy                 3, 021  -   2,418           5,439
        Credit Suisse      Switzerland            1,830  -   2,222           4,051
       Deutsche Bank      Germany                1,480  -     853           2,332

UK TABLES

  
       Top 5 Countries by Increase in Profits ($mn)
        Country     Pre-tax profits      Increase          % Change
       China               321,686        29,345                10
      Italy                18,240        28,925               271            
       UK                   37,319        20,194               118
       US                  225,399        11,617                 5
      S. Korea             17,599         7,897                81

  
    Top 7 UK banks following CBYG/Virgin merger
     Rank    Top 1000 Rank       Bank                Tier 1 Capital ($bn)     % change
    1.         (10.)           HSBC                               151            9.4
     2.         (18.)           Barclays                            73            3.6
       3.         (35.)           RBS                                 53            7.1
      4.         (38.)           Lloyds                              49            8.7
      5.         (41.)           Standard Chartered*                 45            6.1
     6.         (119.)          Nationwide**                        12          -10.0
      7.         (est 161.)      CBYG/Virgin                          9

About The Banker: 

The Banker is the world's premier banking and finance resource, providing global financial intelligence since 1926.

The Banker is the key source of data and analysis for the industry. The Banker's Top 1000 World Banks ranking has been setting the industry benchmark since 1970, providing comprehensive intelligence about the health and wealth of the banking sector. To find out more visit http://www.thebanker.com/top1000worldbanks.

Brian Caplen has been a financial and business journalist for more than 25 years. He has worked in Hong Kong and the Middle East and reported from all over the world. He joined The Banker in 2000 and became editor in 2003.

About the Financial Times: 

The Financial Times is one of the world's leading business news organisations, recognised internationally for its authority, integrity and accuracy. In 2016 the FT passed a significant milestone in its digital transformation as digital and services revenues overtook print revenues for the first time. The FT has a combined paid print and digital circulation of almost 860,000 and makes 60% of revenues from its journalism.