Top 10 World Banks Ranking WORLD

The last year HSBC which has restructured significantly and increased its focus on Asia – slipped from fifth place to ninth. Citigroup which has also curbed its overseas presence – fell from sixth to seventh place. Royal Bank of Scotland (RBS) fell to 18th place after the UK government bailout thwarted its international ambitions. 

Before the financial crisis in 2008, HSBC topped the list, Citi placed second and RBS third, measured by capital strength.

Meanwhile, Chinese banks are powering ahead in the ranking. China now has three banks in the top five places, with Bank of China moving from seventh place to fourth, and China Construction Bank staying in second place. Agricultural Bank of China moved up from ninth place to sixth.

The top four Chinese banks are also the world’s most profitable. Combined profits from all Chinese banks in the ranking are almost double those of US rivals and 10 times bigger than those of UK banks. In 2008, both UK and US banks were more profitable than their Chinese counterparts.

However, Chinese banks are not taking as much global market share as their predecessors. ICBC, which tops the ranking for the third year in a row, is aiming to have 10% of its assets outside China in five years’ time. But this is small in comparison with the global banks in their heyday.

Brian Caplen, editor of The Banker, said: “At one time the ambition of the largest banks was to have operations in all parts of the world and across all business sectors. Now they are focussing on a few areas in a bid to restore profitability. We may have seen the end of the global bank.”

While global banks are cutting back on employees – Citigroup has reduced staff by 12% since 2011 and HSBC by nearly 8% with further losses to come – China’s ICBC and in contrast China Construction Bank have each increased staff by 13% over the same period. China’s big four banks now employ 1.6 million – 1.5 times more than the number employed by the big four US banks.

In most areas of the world banks increased their profits. Suffering heavy losses in 2012 and 2013, eurozone banks have increased their profits by 123% from a low base. African banks increased profits by 18%, Latin American banks by 17% and Asian banks by 7.5%. Asian banks account for more than half of total world profits.

The worst performance was in central and eastern Europe where profits plummeted 69%, largely due to falls in the value of the Russian and Ukrainian currencies.

The best returns on capital are made in South America at 26%, followed by Africa at 24% and Asia-Pacific at 19%. The eurozone’s return on capital is the lowest in the world at just under 5%.