·
UK AND EUROZONE BANKS PLUMMET IN WORLD
RANKINGS
LONDON: strictly embargoed until 00.01 02 July 2012: 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.
– ends –
TOP 1000 WORLD BANKS 2012 – PRESS RELEASE – PDF VERSION
Table1 – Top 10 global banks ranked by Tier 1 Capital
By John Beck | Published: 02 July, 2012 |
·
As the Asia-Pacific region accounts for 54% of total global profits, it is no surprise that no non-emerging bank appears in the top banks by profits-on-average capital.
Over the past two years, the share of world banks’ profits generated by Asian institutions and those in western Europe has gone from reasonably evenly matched in 2010 to an almost 2:1 ratio last year. Now, the trend has worked its way to a logical, though still striking, conclusion. In 2012, banks from the Asia-Pacific region accounted for 54% of total global profits, while European institutions managed just 6%. Outside of Asia, North America managed the next biggest share, though at 23% it was hardly a close contest.
It is not, then, surprising to discover that you have to look outside of the top 10 banks by profits-on-average capital to find a non-emerging market bank, and even then it is in the form of American Express Company and Franklin Resources, neither of which, as card services provider and asset manager with a banking licence, are typical banks.
Overall, Argentina’s Banco Galicia has led the way, with a profits on capital of 70.68%, a figure arrived at by taking into account the pre-tax profits banks generate and the capital at the end of the financial year. Not a single European bank made it into the top 25 banks in this ranking, the only region not to place at least one institution.