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Top 1000 World Banks – Western European banks mount a comeback

Profits are up in the 2014 Top 1000 World Banks ranking, with much of the good news coming from the direction of western Europe. On a regional basis, however, Asia-Pacific still dominates.
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Top 1000 World Banks Ranking 2014 – Profits

Western European banks have mounted a strong comeback, faring much more strongly in the 2014 Top 1000 World Banks profit rankings than they did in 2013. Last year, thanks to dismal performances from Spanish, Irish and Greek lenders, which made huge losses in some cases, the region’s aggregate pre-tax profits amounted to just 1.6% of the global total. Even Africa, despite having far fewer banks in the Top 1000, did better.

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?

This year, because of improvements in the afore mentioned troubled economies and a return to profit for previously loss-making institutions such as UBS, western Europe’s share of global pre-tax profits has increased to 11.05%.

Africa experienced a big drop. Its share of aggregate global pre-tax earnings fell from 2.3% in the 2013 ranking to 1.63% in 2014, testifying to the slow growth of banks in South Africa, its biggest banking market.

Asia-Pacific once again dominated other regions. Thanks to the big and rapidly growing profits made by Chinese lenders, Asia-Pacific accounts for 51.19% of pre-tax profits in the latest ranking. This is down slightly from 56.7% last year, but is still a hefty figure. And if the rise of Chinese banks continues unabated, it is one unlikely to drop by much in the medium term.

North American banks accounted for 24.19% of profits this year, a figure more or less unchanged from 2013. After Asia-Pacific, North America and western Europe, the next most profitable region was Central and South America, which generated 5.26% of global earnings, compared to 6.8% in the 2013 ranking.

The banks in the latest Top 1000 made $920bn of profits, a rise of 23% from 2013. Their aggregate return on capital (ROC) also increased, from 12.2% to 13.7%.

Africa was the most profitable region by return on assets (ROA). The 31 banks from the continent in the Top 1000 made an aggregate ROA of 1.9%. Europe was the most sluggish continent by this measure, its banks generating an ROA of 0.2%. Overall, banks in the Top 1000 made an ROA of 0.8%.

For the second year running, the most profitable bank globally by ROC was Italy’s Banca Mediolanum, which is mainly involved in asset management. It made a 70.43% ROC. Three of the 10 most profitable lenders by ROC were from Venezuela, reflecting the country’s high interest rate environment, which has boosted banks’ lending margins. Argentine banks, which are also benefiting from high interest rates, have two members in the top 10.

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