After a very good year in 2017, profits showed a general decline. Aggregate pre-tax profit growth in 2017 was at a healthy 15.57% year on year, but nearly ground to a halt, inching up a mere 2.05% to $1135bn in the 2018 financial results. The overall Top 1000 return on equity (ROE) ratio (the most commonly used measure to assess profitability) slumped by more than two percentage points to 9.56%, well short of the 12% commonly considered a good level for the banking sector.
In a year of haves and have-nots, Asian banks took the biggest beating, fronted by an overall pre-tax profit decline in both China and Japan. While the top four Chinese banks posted year-on-year increases in pre-tax profits of between 6.99% and 12.81% in the 2018 ranking, this year’s Top 1000 shows a contraction in profits of between -0.12% and -2.94% among the quartet.
