Chinese bank tops global 1,000 ranking for first time

A Chinese bank has topped a list of the world’s top 1,000 banks for the first time, according to a survey.

ICBC moved up from third, switching places with last year’s winner, Bank of America. JP Morgan remained second.

The closely watched annual report by The Banker is based on a firm’s Tier 1 capital, a key measurement of a bank’s strength.

The UK bank sector as a whole ranked 10th, behind France, Brazil and Russia, and down from second in 2008.

The Industrial and Commercial Bank of China (ICBC) moved into pole position on the back of a 15% increase in capital to $160.6bn.

China Construction Bank, the country’s second largest, also grew its capital by 15%, to $137.6bn, and dislodged Citigroup from fifth place.

The UK’s only bank in the top 10 is fourth-placed HSBC, with capital of $151bn, which gains significant earnings from its Asian operations.

China now has 96 banks in the top 1000 ranking and holds four places in the top 10.

‘Big test’
Its big four banks ICBC, CCB, Bank of China and Agricultural Bank of China also head the table for the largest profits.

ICBC saw profits surge 14% to $49.1bn in 2012.
Brian Caplen, editor of The Banker, said: “For several years now European and American banks have been stagnant and shrinking while Chinese banks have been expanding in line with the growth in the Chinese economy.

“On most measures they now score as well or better than Western banks but their big test will be how they cope as China’s growth slows over the next few years.”

The UK’s banking sector now ranks 10th after seeing annual profits plunge by 41% to $19.6bn. It was overtaken by France, which now ranks eighth.

Five years ago, UK banking profits stood at $85.2bn, according to The Banker.

Asian-focused Standard Chartered, which stands in 33rd place, is the only major British bank to improve its performance in the latest ranking, after profits rose 3%.

Pre-crisis
Before the global financial crisis UK banks accounted for nearly 11% of global profits, in 2007, and now they account for just 2.61%

Mr Caplen said: “UK banks always used to outperform in the ranking but for the past several years they have been slipping back.

“The most successful British banks – HSBC and Standard Chartered – rely on earnings from Asia and other emerging markets to maintain their position.”

All but one of the 25 global banks with the greatest losses are European banks, and six of the top 10 losses were from Spanish banks

However, the report showed that total profits of the top 1,000 banks are now back to their pre-crisis levels.