China dominates list of world’s top banks

Banks at Canary Wharf, but the biggest players are now in China. Picture: Getty
Banks at Canary Wharf, but the biggest players are now in China. Picture: Getty
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The UK’s largest bank HSBC has clung on to a place in the world’s top 10 banks, in a year which saw the global banking model under increasing threat.

HSBC fell to ninth place from fifth last year with 153 billion dollars (£97 billion) of Tier 1 capital at hand, as it continued to restructure and focus on its Asian markets, according to The Banker’s latest ranking of top 1,000 banks.

We may have seen the end of the global bank

Brian Caplen, editor The Banker

The global banking model has been on the retreat since the financial crisis due to a slower world economy and tighter regulatory control.

HSBC was the biggest bank in the world in 2008.

Taxpayer-owned bank Royal Bank of Scotland (RBS) fell to 18th from 15th last year with 73.5 billion dollars (£46.7 billion) of Tier 1 capital, as its international ambitions were trashed after it had to be bailed out by the government in 2008 and ordered to concentrate on the UK market.

Back in 2008, RBS was the third largest bank in the world.

Earlier this month Chancellor George Osborne announced plans to begin selling off the taxpayer’s stake in the bank.

The government owns 79 per cent of the bank after rescuing it from collapse during the financial crisis seven years ago.

Today’s report said: “Chinese banks are powering ahead in the ranking but are not filling the gap left by the shrinking international banks.”

Chinese banks now have three banks in the world’s top five, with ICBC in top spot for the third year in a row with 248 billion dollars (£157 billion) of Tier 1 capital at its disposal.

According to the report, ICBC aims to have 10 per cent of its assets outside China in five years’ time.

The survey calls this “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 focusing on a few areas in a bid to restore profitability. We may have seen the end of the global bank.”

Earlier this month HSBC said it would cut almost 50,000 jobs from its 258,000 staff and shrink its investment bank by a third to combat sluggish growth across its sprawling empire.

The largest three banks in the world are China’s ICBC, China Construction Bank with 202 billion dollars (£128 billion) of Tier 1 capital and America’s JP Morgan with 187 billion dollars (£119 billion) of Tier 1 capital.

The Banker magazine reports on banks, financial institutions, multilateral corporations, central banks and finance ministries around the world. The magazines rankings are the industry’s most widely used index of global banking, and are internationally recognised as a guide to the strength of institutions.