Chinese banks account for the largest slice of global banking profits, according to The Banker magazine’s Top 1000 World Banks ranking out today.
While global banking profits have recovered to almost pre-crisis levels, Chinese banks’ profits have soared by 95% over the past three years and now account for 21% of total global banking profits.
In the main ranking of The Banker’s Top 1000, based on capital strength, Chinese banks hold three of the top-ten positions – up from just one last year. Industrial Commercial Bank of China (ICBC) has moved from 7th place to 6th; China Construction Bank has risen from 15th to 8th and Bank of China has moved from 14th to 9th place. Agricultural Bank of China, the only one of the big four Chinese banks not in the Top 10, has risen from 28th to 14th.
While four years ago British banks were the second most profitable in the world, with profits at 58% below their peak in 2007 they are now behind US, Chinese, French and Japanese banks. The Royal Bank of Scotland is down from 4th to 10th place, Barclays from 10th to 12th and Lloyds from 12th to 18th.
“With the Chinese economy growing so fast Chinese banks would be expected to accelerate, but the poor state of much of the British banking sector three years after the crisis is surprising,” says The Banker’s editor Brian Caplen. “The ranking very clearly shows the shift in the centre of gravity for the world economy from Europe to the major emerging markets.”
Other major emerging economies have also shown gains in this year’s ranking. Brazil’s banks have some of the highest returns on average capital at 32%, while India’s banks have increased profits by 115% since 2007. UK banks have a return on average capital of 9.6% and their non-performing loans now stand at 5% – more than double the levels of Brazil, China and India.
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About The Banker:
The Banker was established in 1926 and is part of the Financial Times Group. The magazine has been carrying ranking since 1970 and also offers a database service. For more information about the ranking and the database go to www.thebanker.com/top1000.php and www.thebanker-database.co.uk.
Brian Caplen has been a financial and business journalist for 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, one of the world’s leading business news organisations, is recognised internationally for its authority, integrity and accuracy. Providing essential news, comment, data and analysis for the global business community, the FT has a combined paid print and digital circulation of 579,249 (Deloitte assured, October 2010) and a combined print and online average daily readership of 1.9 million people worldwide (PwC assured, May 2010). FT.com has three million registered users and the FT has 189,022 paying digital subscribers. The newspaper, printed at 24 print sites across the globe, has a daily circulation of 401,898 (ABC figures October 2010).