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Top 1000 World Banks – Asia strengthens grip on global banking share

The global percentage of Tier 1 capital held by Asian banks has grown yet again in the 2014 Top 1000 World Banks ranking, largely at western Europe's expense.
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Top 1000 World Banks Ranking 2014 – Global structure

​Asia increased its dominance of global banking by growing its share of Tier 1 capital by a full percentage point from 34.94% to 35.96% – equivalent to a $67bn capital uplift – which is akin to adding another top placed bank to the ranking. Deutsche Bank, for example, is positioned 18th in the Top 1000 with $70bn of Tier 1 capital.

Philip Alexander reports on the full results of The Banker’s Top 1000 World Banks ranking 2014, in the story Top 1000 World Banks 2014: Back on track?

Asia’s gain is mostly Europe’s loss, with western Europe decreasing from a 34.63% share in 2013's ranking to 33.78% this year. In spite of all the capital raising efforts of European banks as they recover from the crisis, the stellar growth of Asia, and particularly of Chinese banks, as they increase capital to support larger asset books means that Asia continues to pull further away from western Europe.

North America stays roughly constant in percentage terms at about 20%, but as the global Tier 1 uplift was 7.5%, this means North American banks would have grown at this rate to hold their share. This logic applies equally to other regions which did not substantially change their percentage shares.

The Middle East increased marginally from a 3.69% share last year to 3.77% this year and central and eastern Europe went from 2.07% to 2.21%. Central and South America fell slightly from 3.3% to 3.23% and Africa retreated from 1.04% to 0.94%, with these two regions feeling a negative impact from falling exchange rates against the dollar in key countries such as Brazil and South Africa.

In terms of numbers of banks in the ranking, Asia-Pacific continues to lead the way with 355 banks, up from 350 in 2013's ranking – the number has been growing in small increments for the past five years. This number of banks is way ahead of all the other regions, with western Europe the nearest contender with 233 banks – surprisingly, given the travails in Europe with a stagnating economy and troubled banks, this number is two banks higher than last year.

Given that North America stayed more or less the same in percentage of Tier 1 capital terms, it is interesting to note that its number of banks continued to fall from 179 in 2012 to 167 last year to 163 banks this year.

All the other regions are relatively small with the total number of banks in Africa, central and eastern Europe, Central and South America and the Middle East amounting to 249 combined –  106 fewer than the Asia-Pacific total and only 16 banks ahead of the western Europe aggregate.  

Of course, looking at the industry in this way means only counting banks with a Tier 1 capital above the $391m needed to enter the Top 1000. Smaller banks in the regions may play an important role in small and medium-sized enterprise and regional lending, for example, but will not be caught by this snapshot.​

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