The 2016 Top 1000 results are indicative of the challenging environment banks found themselves operating in during 2015. Even the Chinese banking industry’s meteoric growth shows signs of slowing down for the first time in a decade.
Summary of the Top 1000 World Banks
Brian Caplen, editor of The Banker, provides a summary of the Top 1000 World Banks Ranking results for 2016.
Unprecedentedly, ICBC, China Construction Bank, Bank of China and Agricultural Bank of China are all in the top five banks by Tier 1 capital worldwide. But the good news does not end there for Chinese banks, with many putting in a strong performance further down the ranking.
A patchy economic performance in western Europe in 2015 saw its lenders slide further down the global rankings. HSBC is clinging on to its global top 10 position, however, while there is some good news for Greek and Italian lenders.
The global capital assets ratio average has improved on The Banker's 2015 ranking, with Bahrain's First Energy Bank leading the way.
As was the case in the 2015 ranking, China and the US are producing the fastest growing banks in the world, with the US's LegacyTexas Group leading the way in first, ahead of Taiwan's KGI Bank and China's Bank of Tangshan.
Risk-weighted assets have jumped in North America as a result of the move among its banks to Basel III. Elsewhere, western Europe also saw an RWA-to-total assets ratio percentage rise.
Brazilian lenders still monopolise the top of the Latin American and Caribbean table, while banks from Panama, Argentina, the Dominican Republic and Mexico benefit from instability in the Venezuelan economy.
Middle Eastern banks continue to show impressive Tier 1 capital growth, with Saudi Arabia's National Commercial Bank and Qatar National Bank breaking into the global top 90 for the first time. Among the rest, National Bank of Abu Dhabi is the region's big winner.
High returns on assets are often shown by emerging markets, but this was not always true in the 2016 Top 1000 World Banks Ranking, with the US showing strongly in this field.
As has been the case in most recent rankings, European lenders have continued to wrestle with asset quality issues.
The trend in falling loan-to-deposit ratios continued in the 2016 Top 1000 World Banks ranking, as the aggregate ratio dipped.
Asia-Pacific, North America and western Europe continue to dominate the Top 1000 in terms of Tier 1 capital share and the number of banks. Elsewhere, the Middle East shows some growth, but Africa and central and eastern Europe are going backwards.
The dollar’s resilience has helped the US produce a large number of new arrivals in the 2016 Top 1000 World Banks ranking, while healthy numbers of European and Asian banks have returned to the list.
Russian banks have suffered through the stormy financial conditions of the past two years, but its lenders remain the largest in the central and eastern Europe region. However, Romania, and Banca Transilvania in particular, provide the region's good news story.
While US and Chinese banks continue to dominate the income tables, some of the more notable performances come from the UK (HSBC), Japan (Sumitomo Mitsui Financial Group) and Russia (Sberbank).
Almost all the leading Japanese lenders have moved up the ranking thanks to strong growth in Tier 1 capital, while its three mega-banks continue to dominate the country ranking.
Most of the big names held fast in North America, with JPMorgan still out in front and only a little movement further down the rankings.
Australian banks maintain a firm grip on the top four places in the Asia-Pacific (excluding China and Japan) rankings, while new entrants from Taiwan and climbers from India make their mark.
Its share of global return on capital may have fallen, but Asia-Pacific still leads in profits. On the rise are western Europe, North America and the Middle East, while Latin America and the caribbean, central and eastern Europe and Africa all recorded smaller shares.
The depreciating rand and falling oil prices have caused trouble in Africa, with South African and Nigerian lenders slipping down the overall rankings, but Kenyan entrants still managed to show Tier 1 growth.
The top 10 most efficient banks in the 2016 ranking are all from China, although Australia also made some impressive gains.