China has long overshadowed the banking markets of the rest of Asia, both in terms of the size of its banks and their total profits. The country’s biggest lender, Industrial Commercial Bank of China, is the world's sixth largest bank by Tier 1 capital and 10th by assets, according to The Banker's Top 1000 World Banks. China Construction Bank and Bank of China also feature in the global top 10 by Tier 1 capital.
These banks have secured the success of the country's leading international finance centre (IFC), Beijing. But, while Beijing has topped The Banker's ranking of Asian IFCs by total assets and pre-tax profits, it is the Thai capital of Bangkok that shows the best return on assets (ROA), a ratio that measures how efficient banks are at generating profits.
Bangkok's banking system has as average ROA of 1.66, an improvement from the previous year's 1.59. The country’s largest lender, Bangkok Bank, is ranked 164th in the Top 1000 World Banks.
Chinese dominance
Beijing ranks second in the list of IFCs by ROA, recording a figure of 1.57, followed by Kuala Lumpur’s 1.55. The Chinese cities of Shenzhen, Fuzhou and Shanghai also feature in the top 15, making China the most represented country in the list. When it comes to the most improved hubs China again takes the lead. Both Beijing and Shanghai have climbed up the ROA list by two positions each, the best results among all 15 Asian cities.
Japan is the second most represented country on the ROA ranking, with both Osaka and Tokyo featured in the list. While Tokyo is ranked second in both the top IFCs by pre-tax profits and assets, it only managed an average ROA of 0.46, which places it in 15th place in the ranking, while Osaka sits only slightly higher in 13th position. This may indicate the need for Japanese banks to seek additional revenue streams outside their national borders and across the region.
Hong Kong and Singapore, widely considered Asia’s top IFCs, score relatively well in both the ROA and pre-tax profits rankings. Hong Kong is third in the pre-tax profits table and sixth in the ROA ranking, while Singapore is ranked 10th in both.
