China dominates world's largest banks even as Europe flexes financial muscle

Chinese lenders held the top four places in overall ranking based on Tier 1 capital.

Chinese banks are the world’s largest after occupying the top four places in the global bank rankings based on Tier 1 capital, easily snapping up a third of global profits, according to The Banker’s Top 1000 World Bank rankings.

ICBC sealed its global leadership after growing its capital by $43b to a Tier 1 capital of $324b. The mere capital growth of ICBC is equal to the addition of a Standard Chartered or a UBS, the report noted.

China Construction Bank trails in at second place with $272b in Tier 1 Capital followed by Bank of China at $224b and Agricultural Bank of China at $218b, who rose up the rankings at the expense of JP Morgan Chase who slipped to fifth place with capital of $209b.

The other Asian standout is South Korea where the banks added $8b in overall profits, an increase of 81% The profits uplift of South Korea’s banks was the fifth highest in the world.

On the other hand, the highest losses were recorded in India where the banks turned a $7.9b profit into a $9.2b loss as public sector banks are now paying the price for their lending spree with much of their loans turning sour.

Western Europe banks also increased their share of global banking profits from 13% to 20% with UniCredit, Royal Bank of Scotland and Credit Suisse posting positive gains.

“Finally, after some dismal years in European banking we are seeing a recovery. Losses in Greece and Portugal are much less while France, Germany, the Netherlands, Spain and the UK all saw big increases,” said Brian Caplen, The Banker editor.

The Banker’s Top 1000 World Banks ranking is an industry benchmark that has provided intelligence about the health and wealth of the global banking sector since 1970.