Organic growth from developing markets in Latin America and Asia and mergers of conversions in the developed world provide the stories behind the majority of new entrants in the 2013 Top 1000 World Banks ranking.

New arrivals in the top 1000

There are 36 new entrants into this year’s Top 1000 ranking, and largely speaking the factors behind these arrivals are split into two camps. One half of the new arrivals are a measure of the pure organic growth taking place in emerging markets. Latin American banks account for 10 new entrants – five from Brazil, four from Colombia and one from Mexico, while south-east Asia accounts for five.

With a youthful population, a rising middle class and an abundance of natural resources, Latin American economies in particular have been benefiting from a surging demand for commodities and experiencing rapid growth which has been driving the growth of the regional banking industry.

The other half of the new entrants table comprises banks principally drawn from developed markets whose entrance has been largely fuelled by merger and acquisition activity or conversions into bank holding companies. 

The highest new entrant into the Top 1000 this year, in 97th place, is China’s Ping An Bank, which has a Tier 1 capital of $12.2bn. Ping An acquired a controlling 52.38% stake in Shenzhen Development Bank (SDB) in 2012, which has significantly boosted its presence in the ranking. While Ping An had just eight branches and its outlets were mainly in the south-east regions of China, the acquisition saw it inherit SDB’s 20 branches and 302 outlets across 19 cities in China, including Beijing and Shanghai. (Ping An Bank is the banking unit of Ping An Insurance Group – China’s second-largest insurer.)

The second highest entrant into the Top 1000 this year is Greece’s Eurobank Ergasias, which increased its core Tier 1 capital ratio by more than $268m and improved its liquidity position by more than $535m after selling its Turkish operations to Kuwait’s Burgan Bank for about $372m.  

Elsewhere in Europe, the four new Spanish entrants that feature – Kutxabank, Grupo Cooperativo Cajamar, Cecabank and Banco Cooperativo Espanol – are all the result of merger processes. This is a continuation of the trend seen since the 2011 Top 1000 ranking which saw Spanish savings banks, or ‘cajas’, merging. The highest entrant in the 2011 ranking was Spain’s Banco Financiero y de Ahorros, the holding company of Bankia, which was formed as the result of the merger of seven cajas.

Many Spanish banks were hit hard by the collapse of the country's real estate market, forcing a wave of mergers upon the Spanish banking sector in an attempt to shore it up against a towering mountain of debt. As the third highest entrant into this year’s Top 1000, Spain’s Kutxabank was created from the merger of three public savings banks – BBK, Vital and Kuxta – which brought its total asset base to $88bn. 

Meanwhile, three of the six US banks that feature – Raymond James, BankUnited and Hilltop Holdings – were converted from a savings and loan holding companies to bank holding companies.

Other new arrivals include four Japanese banks (among which North Pacific Bank ranks 246th overall as a result of its merger with Sapporo Hokuyo), as well as banks from Portugal, Luxembourg, Finland, Iran and Kenya.

The continued growth and expansion of the global banking industry has led the Tier 1 capital of the 1000th ranked bank in the 2013 ranking to increase by a sizeable 20.4% to $342m, compared with $284m in the 2012 ranking. This is almost double the 11% annual increase in Tier 1 capital recorded between the 2011 and 2012 rankings.

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