Forty years after BankAmerica topped The Banker's first global bank rankings in 1970, the US-based bank has once again taken the number one spot in 2010. While Bank of America, JPMorgan and Barclays all participated in 1970 and 2010, this 40th anniversary of the listings shows that much else has changed in the sector. The Banker's editor emeritus Stephen Timewell reports.
Top 1000 World Banks 2010
Guillaume Hingel, research manager of The Banker talks to Brian Caplen, editor of The Banker about the data methodology of the Top 1000 for 2010 and summarises what the results are showing about the changing financial landscape.
Last year, the financial crisis had little impact on the top 25 western European banks.
Looking at this year's Top 25 central and eastern European (CEE) banks, one could be forgiven for thinking the region's transition to a market economy had gone into reverse.
Every year the Top 1000 Banks ranking delivers new and startling insights into the creeping dominance of the Chinese banking sector and this year does not disappoint.
Despite pulling itself out of the worst recession the country has seen since the Second World War, Japan remains a deeply troubled economy saddled with a fiscal position that has in recent months gone from bad to worse: indeed, so parlous is Japan's predicament that in June the country's new prime minister, Naoto Kan, warned that the once mighty Asian economy may be staring a Greek-style public debt crisis in the face.
An almost frenzied focus on boosting capital in 2009 has meant that Bank of America (BOA) leapfrogged JPMorgan Chase in this year's rankings to become the world's biggest bank by Tier 1 capital.
With the onset of the financial crisis, The Banker has focused much more of its Top 1000 data gathering on asset quality. This year, a total of 179 banks supplied comprehensive data on their levels of impaired assets, compared with 142 last year. While this still accounts for only 18% of total banks in the Top 1000, it is sufficient to begin to understand global trends in asset quality.
The recovery in pre-tax profits to assets and pre-tax profits to Tier 1 capital ratios are a sign of a return to more healthy levels in the aftermath of the crisis.
Signs of a general recovery in banking include the facts incurring losses are not recording them on the same scale as last year and that even the lowest Bank for International Settlement (BIS) capital ratios are higher than in 2009. The worst non-performing loan (NPL) percentages, on the other hand, are higher, suggesting that there is more pain to come.