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Top 1000 World Banks – Global capital assets ratio sees improvement

The global capital assets ratio average has improved on The Banker's 2015 ranking, with Bahrain's First Energy Bank leading the way.
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Taken as a whole, the capital adequacy of the Top 1000 World Banks has improved since the 2015 results. The average capital assets ratio (CAR) has climbed from 6.1% to 6.44% and two banks have achieved CARs above 65%; in the 2015 rankings just one lender recorded more than 53%. Bahrain’s First Energy Bank has clinched the top spot, while Denmark’s FIH Erhvervsbank has shot to second place after nearly tripling its CAR since the 2015 ranking.

Among western European banks, the average CAR has jumped from 4.88% to 5.31%, but they still lag behind their North American counterparts which average 8.18% (up from 7.86% in the 2015 ranking). On a regional basis, the Middle East is still out in front with 10.69%, while China has beaten the global average by almost half a percentage point.

After taking into account the risk weighting of banks’ assets, small US lender Briscoe Ranch is top of the rankings with an outlier Bank of International Settlements (BIS) capital ratio of 115%. It has knocked Nederlandse Waterschapsbank down to second place, but the Dutch bank’s BIS capital ratio still increased to 79.8%, up from 70% in the 2015 ranking. The US is the strongest performing market, accounting for one-quarter of the top 20 banks in the BIS ratio table.

Franklin Resources, which topped and came second in the 2015 rankings for CAR and BIS, respectively, has disappeared from the Top 1000 as it has sold its banking licence. Other notable departures from the BIS top 25 include Russia’s CentroCredit Bank, which has also dropped out of the Top 1000, and Brazil’s Banco Original, which recorded a 28.7% BIS ratio, down from 46.19% in the 2015 ranking. 

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