LONDON: The UK banking sector has lost its stature in the international arena against strong Chinese competition, according to The Banker magazine’s Top 1000 ranking.
The 2012 rankings reveal year-on-year falls in profit (down 8.2%), lending (down 3.12%) and capital (down 1.71%) among UK banks. In just five years,UK banks’ share of global banking profits have halved to 5%.
By comparison, Chinese banks, which accounted for 4% of profits in 2007, now make up nearly one third (29.3%) of total global profits.
The situation is worse still for the rest of Europe where profits have slumped dramatically.
While Eurozone banks still account for a large proportion of global assets – 45% compared to 58% five years ago – only 6% of total banking profits have been generated in the Eurozone, compared to 46% five years ago. In addition, these banks were the biggest losers. On a ranking looking at the largest banking losses, 24 out of the top 25 banks were European.
The rankings also unveil a massive dichotomy in the performance of UK banks. HSBC and Barclays’ profits put them among the top 25 banks ranked by profit, but Lloyds and RBS suffered huge losses and featured at 9 and 21 on the Top 25 ranking of losses.
Brian Caplen, editor of The Banker, said: “To borrow a phrase from the commentators covering Euro 2012, the rankings this year show a tale of two halves for the UK banking sector. While UK banks as a whole have suffered tremendously in terms of their share of global banking profits, the performance of individual UK banks is extremely varied. Some are making huge profits while others make huge losses.
“Chinese banks on the other hand are making the type of profits that European banks can only dream about and this year’s results show Europe’s loss is China’s gain.”
The overall rankings, which assess banks based on capital strength, only confirm the shake-up of the global banking environment: China continues to steam ahead of the UK and Europe, with the four largest Chinese banks taking up positions in the Top 10 – one more than in 2011. In fact, Chinese giant ICBC, takes up the third position on the Top 1000 ranking – the highest spot ever for a Chinese bank in the Top 1000. The inclusion of a fourth Chinese bank comes at the expense of British bank Royal Bank of Scotland which has fallen to 12th place, leaving only one UK bank – HSBC – in the top 10.
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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/top1000worldbanks and www.thebankerdatabase.com.
Brian Caplen has been a financial and business journalist for more than 25 years He has worked in Hong Kong and theMiddle Eastand 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 600,000 (Deloitte assured, 2 January 2012 – 1 April 2012) and a combined print and online average daily readership of 2.2 million people worldwide (PwC assured, November 2011). FT.com has more than 4.5 million registered users and 285,475 paying digital subscribers. The newspaper, printed at 21 print sites across the globe, has a global print circulation of 300,584 (ABCs, May 2012).