Profit growth falls after four record years
Unlike the past four successive years of record pre-tax profits and strong growth, The Banker’s 2008 Top 1000 World Banks rankings, based largely on fiscal 2007 results, reflected the US subprime crisis and global credit crunch and showed a 0.7% decline in profits to $780.8bn.
The slight decline in profits, in contrast to continuing strong growth in Tier I capital (15.9%) and aggregate assets (21.6%) was seen most dramatically in the performance of the US banks, where its 169 banks in the 2008 Top 1000 contributed only 14% of the aggregate total profits or $112.6bn, well down on the 24% achieved last year and significantly down on the 49% achieved in The Banker’s 2003 ranking.
The shift in the global financial centre of gravity is taking place but not at a radical pace.
While the importance of the US banks dropped in all major categories, falling to 11% from 13% in total assets and to 16% from 19% in aggregate Tier 1 capital, remarkably the role of banks from the EU(27) stayed exactly the same as the previous year, accounting for 41% of profits, 53% of assets and 42% of Tier 1 capital.
Asian banks now account for 19% of profits, well up on last year’s 12%, with Middle East and Latin banks expanding from a low base.
